Joint Sub-Committee on Fisheries debate -
Tuesday, 10 Dec 2013

Fisheries Local Action Groups: Discussion with Bord Iascaigh Mhara

Chairman

I welcome Mr. Michael Keatinge, deputy chief executive officer, BIM, Bord Iascaigh Mhara, to today’s meeting. The sub-committee is near to finalising its report on developing aquaculture and it appreciates Mr. Keatinge for attending to update it on the progress made in establishing the fisheries local action groups, FLAGs.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are also directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or entity by name or in such a way as to make him, her or it identifiable. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I also remind members to either switch their mobile telephones off or switch them to airplane mode.

I invite Mr. Keatinge to make his opening statement.

Mr. Michael Keatinge

I thank the Chairman and members of the sub-committee for this opportunity to update it on the progress made to date in establishing a functioning network of fisheries local action groups, FLAGs.

FLAGs are provided for under priority Axis 4 of the European Fisheries Fund. They are community-led, local-development initiatives that focus on the sustainable development of fisheries areas. Funding is through the European Fisheries Fund and the national development plan. Following decisions made by FLAG boards, financial assistance, complementary to other Community instruments, is provided for the sustainable development and improvement of the quality of life in fisheries areas eligible as part of an overall strategy which seeks to support the implementation of the objectives of the Common Fisheries Policy, in particular taking account of its socio-economic effects.

BIM, as the State agency with primary responsibility for the implementation of the European Fisheries Fund and with a long history of working directly with the seafood sector as well as the wider fisheries community, is tasked by its parent Department, the Department of Agriculture, Food and the Marine, with implementing the European Fisheries Fund, including priority Axis 4, the sustainable development of fisheries areas.

The FLAGs are established pursuant to Article 43 of Council Regulation (EC) No. 1198/2006 which states:

A fisheries area selected for assistance shall be limited in size and, as a general rule, shall be smaller than NUTS, nomenclature of territorial units for statistics, level 3. However, the area should be sufficiently coherent from a geographical, economic and social point of view. Assistance should target, as a priority, areas with (a) low population density, or (b) fishing in decline, or (c) small fisheries communities.

Following discussions at the operational programme monitoring committee, and subsequently with the European Commission services and our managing authority, the Department, it was agreed Axis 4 would operate throughout the Irish coast with the exception of towns and cities with a population in excess of 15,000. It was further decided that this approach would be best delivered by adopting a regional approach to the establishment of FLAGs. On that basis, a total of six FLAGs were identified.

I have enclosed maps of the FLAG networks in the UK and in France in my written submission. I could have selected others but these, by way of example, illustrate my points on our network. In England and Wales, north Cornwall and Devon have a FLAG designation but there is vast gap in designations along the southern coast all the way to Hastings, south of London, then further gaps from there along the east, all the way to Norfolk and then up to Yorkshire. The UK has stipulated that the FLAGs will be small. The downside of that approach, however, is that vast swathes of the coastline are left out. In France, with a total of 11 FLAGs, the authorities there concentrated on small specific areas, covering only small fractions of the entire coastline. Scotland, in contrast, might be said to have adopted a model closer to the Irish one. It has attempted to create FLAGs at a NUTS level 3 that incorporate the entire coastline.

During 2013, all six FLAG in Ireland were established. In addition, it was agreed that in each region the FLAGs could, as part of their development strategy, identify several sub-priority areas, generally not more than two, wherein up to 70% of its operational budget could be concentrated. In the event that sub-priority areas are identified, the development strategy for these areas could form an integral part of the overall strategy of a FLAG. The balance of the operational budget would be available to projects from the remainder of the region covered by the FLAG.

The development strategies were produced in the past 12 months and cover each of the regions. I will make copies available to the sub-committee but other copies can be downloaded from the BIM website. While BIM, the implementing body, has facilitated their formation, the FLAGs in every case consist of an independent board made up of public and private partners from various local, relevant, socio-economic sectors, selected according to the principle of proportionality. BIM will examine a project to ensure it is complaint with regulations but it never addresses whether the project should be funded. BIM also completes all claims of the managing authority back to the European Commission, as well as undertaking all audit visits by the Commission. BIM’s role is one of assistance rather than one of direction.

By way of oversight and horizontal integration, a national implementation body has been established, comprising representatives of each of the FLAGs and representatives of the major public service bodies. The body meets twice annually to provide guidance to the operation of the FLAGs, its most recent meeting being in November 2013. By doing this at a national level, we have attracted representatives from large national bodies such as Fáilte Ireland which might not be able to send representatives to local meetings. The body has provided a useful forum for the FLAGs from all corners of the country to discuss common issues.

During 2013, all six FLAGs developed and published their integrated local development strategies, based on a bottom-up approach in agreement with the managing authority. These comprehensive documents are available on the BIM website. A total of 61 projects were considered by the FLAGs, of which 45 were approved for funding. To date, claims have been received from 36 applicants representing a total investment of €172,631 with €91,743 in grant aid, 50:50 between the State and the EU. A further six projects provided funding of some €90,000 towards the cost of producing integrated local development strategies. These were community led not BIM led. It was up to the communities as to how they prioritised their strategies.

Among the services I have mentioned, we provide a local co-ordinator and there is one staff member from BIM in each of the six regions, currently from the fisheries side. Next year we hope to include aquaculture, but at the moment it is fisheries. There is one person from BIM available to assist, and the board bears the cost of that person. We also provide administrative services to the FLAGs, including administering the management of project claims and so on. Similarly, the board covers the cost of that administrative assistance.

Chairman

Thank you. There are some useful pointers in that presentation for members. I call on Deputy Ó Cuív first.

Deputy Éamon Ó Cuív

Could Mr. Keatinge tell us what is the total kitty?

Mr. Michael Keatinge

This year we provided €250,000 for the start-up year. It is hoped to increase that budget next year. I have been discussing that with our own board.

Deputy Éamon Ó Cuív

Is there a European fund behind this?

Mr. Michael Keatinge

Yes, there is.

Deputy Éamon Ó Cuív

What is the total amount of the fund?

Mr. Michael Keatinge

About €2.5 million.

Deputy Éamon Ó Cuív

One of the problems I have with this is what happens if we allow everybody in on everything. I did a quick calculation for the six regions. I could divide my region into eight sub-regions that I can clearly identify. If I took the coast from Arklow to Youghal, I could find at least that number as well - west of Waterford Harbour, east of Waterford Harbour and so on. There is a little more than €400,000 for each of the six regions, and if we divide that by eight again we end up with €50,000 for each sub-region. We then set up all the superstructure for €50,000. I put the same argument up in the early days of the Leader programme. It is an awful lot of money for such a little thing, because €50,000 would not set up any kind of business. I am not blaming Mr. Keatinge. It is a pity they did not give this to the Leader companies and just let them get on with the job, as the structure is already there to administer the money to coastal communities. As the money was so small, I think the French got it right by allowing in only those areas where there would be more socioeconomic benefits. If a few hundred million euro was in question, it might be worth talking about, but €2.5 million is a waste of time.

Deputy Martin Ferris

How long has this been in operation? I got a briefing locally about this earlier in the year. The amount of funding is trivial to meet the needs and requirements involved, or to create any sustainability for people in coastal communities and people who are struggling with inshore fishing. Can any of that money go towards local co-operatives? It may buy an ice machine or something like that. Could the money go towards creating some kind of storage facility whereby people could keep certain fish until such time as they can get the maximum benefit from the market? In many coastal communities, people involved in fishing for lobster and crayfish can make €22 or €24 per kilo in the months of March, April or May, but then in July and August that will drop to €8 or €9 per kilo.

Has there been much interest in the take-up? It was stated in the presentation that a management committee is being set up involving all the stakeholders in the community and so on. Who selects this management committee? Is it determined by local people? Mr. Michael Keatinge stated that there was public and private support. Are the local authorities behind it?

I concur completely with what Deputy Ó Cuív has stated. The amount of money is so small that it will have no real effect on something that is so necessary.

Senator Denis Landy

I thank Mr. Keatinge for his presentation. He referred to 36 applicants that had been successful. Where is that list available?

Deputy Noel Harrington

I welcome Mr. Keatinge to the committee. As part of our consideration of the report the issue of FLAGs cropped up, and very few of us understood what they were about. I thank Mr. Keatinge for giving us an insight into how and under what structure they are operating. The funding is relatively small when we look at the entire coastline of the country. I presume the structure of these would have been provided by the current CFP. It is funded by the European Fisheries Fund, EFF. Why is it only in the last two years of the CFP that the FLAGs are being established, when the CFP is expiring at the beginning of 2015? We have an opportunity to get proper funding for these FLAGs with the incoming CFP in 2015, similar to the way the Leader funding is going.

The model for Leader companies is changing and coming back under a local government framework. The south-west FLAG has a very impressive membership. There are fishing interests, aquaculture interests, environmental interests, food interests and a member from the existing Leader company, but no public representative to oversee what are in effect public funds. In light of the move by the Leader companies to go back under the local government model - one of the arguments for this was that it would give public oversight or transparency to that funding - will the structure for the FLAGs will be examined?

There are many ways in which BIM could enter into partnerships for the purpose of funding. There are possibilities in the area of retraining, upskilling and diversifying the skills that are available in the sea fishing industry for use in the offshore exploration industry. Even though BIM has a hands-off role in respect of projects, I think Mr. Keatinge is underselling the whole thing if BIM does not get involved in that area of retraining and upskilling.

Chairman

On our visit to Scotland, the Cabinet Secretary for Rural Affairs and the Environment, Richard Lochhead, spoke about inshore fisheries committees, and was aiming to improve the management of Scotland's fisheries out to the six-mile limit. Are these the FLAGs-----

Mr. Michael Keatinge

No.

Chairman

It is a little bit confusing. We thought the FLAGs were an Irish version of those.

Mr. Michael Keatinge

I will take the questions in the order they were asked. The budget we are discussing is part of the EFF, which exists from the last CFP. The new CFP has been agreed, but what has not been agreed yet is the European Maritime and Fisheries Fund, or EMFF.

We do not yet know what Ireland will receive. We know Axis 4 and the FLAGs have been retained and strengthened in their appearance in the new funding mechanism. Ireland will get an opportunity to address the budget of the FLAGs. That will not be in the gift of BIM but will be a decision by the Minister. The funds I am talking about run to the middle of 2015 at the very latest. In theory the new funds should begin in 2015 also, so we are talking about 2014. To return to something Deputy Harrington raised, the key point is that by having a FLAG network in place we can avail of and draw down the EMFF funding. It is a matter of ensuring it is given due priority, but that is a matter for the members rather than for me.

Deputy Éamon Ó Cuív

Are we talking about €100 million or €200 million?

Mr. Michael Keatinge

I do not know, but last time around it was €60 million, so it may be increased, but that would be for fisheries, aquaculture and processing. Unlike the CAP, fisheries tends to receive very small budgets to begin with. It will not be a matter for BIM but for the Minister and the Department.

Deputy Éamon Ó Cuív

The budget would be smaller, probably approximately €50 million.

Mr. Michael Keatinge

On the last round we got €60 million. I understand that Ireland has asked for a significant increase, but it would be a matter for the Department and the Minister to discuss that.

Deputy Éamon Ó Cuív

That still covers aquaculture-----

Mr. Michael Keatinge

It covers processing and aquaculture.

Deputy Éamon Ó Cuív

So would BIM foresee this FLAG getting a fantastic increase from €2 million to €100 million?

Mr. Michael Keatinge

From €2 million to €10 million would be more correct.

Deputy Éamon Ó Cuív

For ten years I have met a common perception that rural development industries are very cheap. Everyone understands that if one gets an Intel it represents millions of euro, but it is thought that down the country it is dead cheap to create jobs and we can do it for €5,000 here and €20,000 there. Having done the job, I can tell the committee it is not cheap to create jobs. If anyone tells me they can create jobs at €3,000 a punt I always tell them that if it were that cheap there would be no need for the grant in the first place. If the money will be that small it would be much better to constrain it to the areas of greatest need and ensure we have something decent for a few people, rather than spreading the jam so thin that nobody will get any.

Mr. Michael Keatinge

To address that point and an earlier one the Deputy raised, in an early model we discussed with the Commission the option of using the Leader network but the Commission wrote to the Department and instructed it that because this was a separate initiative, they had to be stand-alone entities. The FLAG could not be a sub-committee of Leader but would have to be a stand-alone structure. That was a written instruction from the European Commission services.

Chairman

Would they be in a position to draw down funding from two sources? If a FLAG committee had a sub-committee which was an affiliate, could it draw in Leader funding?

Mr. Michael Keatinge

Yes. In every case we have sought to have Leader on the FLAGs alongside BIM. In coastal areas Leader has reciprocated and many of the coastal Leaders have somebody from BIM on them. The idea is to work to ensure that a project that merits funding does not fail for want of paperwork. The facilitator will identify excellent projects and divide the funding areas between Leader, the FLAG and Bord Fáilte. It is truly trying to integrate. We are under written instructions that the FLAGs must be stand-alone entities. We have truly sought to integrate with existing structures, including Leader, as Deputy Harrington has noted. Leader is represented in all of our FLAGs. We can have integrated projects. The one thing we cannot do under Community legislation is to fund a project from two sources. Instead we break the project into three parts, each funded from a different source. The idea is to create this integration across Government services. The budget is entirely outside my gift, but unfortunately the reality we live with is that fisheries budgets tend to be smaller.

On Deputy Martin Ferris's point, the FLAGs have been set up from mid-2012. I agree that there was a long lead-in time. We lost a number of years getting the EFF implemented and a few years getting agreement on how the FLAGs should be rolled out in Ireland. I do not have an answer or explanation on that loss of time. We have worked very hard over the last 18 months to bring together operational FLAGs and, as evidenced by their strategies, which are available to the members, they have done much work. We hope formally to launch the south west FLAG at the end of January.

One could use funding to get a nice machine for the co-op. Those are exactly the types of project that FLAGs would approve. One could definitely look at something like lobster and crayfish holding. We would encourage that.

The question of who selects the committees is difficult. It is a chicken-and-egg situation. Deputy Harrington has also talked about membership of the committee. We have approached communities and asked them to bring forward representatives. If a community had an existing co-op or community structure they could look to those to nominate somebody. The principle of the FLAG is a very open one. If a group came forward and said it would like to participate, it would be the intention that they would be welcomed. There is an attempt to avoid elections. It is to give it a community basis and we have found that people have been willing. We tend to see the same faces, but community activists have come forward in every area.

Deputy Éamon Ó Cuív

I assume local community councils have been contacted by BIM about establishing these units. I live in a coastal area overlapping two areas and there is a co-operative society in one area, while a few miles up to road there is local development council and a community council.

Mr. Michael Keatinge

We have been in touch with all the county councils and local development councils in every area, the VECs and any local bodies. Deputy Harrington raised an important point about the changes afoot in the Leader approach, whereby it is being brought back to a local government model. In my earlier presentation I stressed that BIM has been the implementing agency for seafood funding for many years. We are a public body, so it is a fine line. We have made all the decisions for many years within our board structure, so the executive and the board of BIM make the decisions on grant aid. Over the last five or six years we have moved to a more open model in which we have external bodies making those decisions.

With the FLAGs, BIM takes responsibility for examining an application and ensuring that it is legal and correct and meets the necessary strictures of good governance. We then inform the FLAG of the budget and strategy and let it make the choice. We do not interfere in the choice process. We do ensure the choice is legal and meets all the standards of governance, and we take responsibility for that and for the conduction of the audit with the EU auditors. We are bringing the FLAGs within an existing public body governance structure. Whereas Leader companies were separate private companies, the FLAGs are boards which have responsibility for decisions but make those decisions in the knowledge that a public body provides the oversight, not interference. There is a definite line. We do not make the decisions but advise on legality and appropriateness.

Deputy Noel Harrington

I appreciate that. Mr. Keatinge said that the same faces tended to crop up in coastal and fishing communities, and one tends to meet the same people over and over. Conflicts of interest could arise very quickly and easily.

What is the role of BIM in that situation? Is it just a matter of giving advice to the FLAGs?

Mr. Michael Keatinge

As a facilitator, we try to act more like a secretary to a board and provide them with guidance and assistance as they require it. On matters to do with governance, we have the final say. In other words, we cannot allow a body to make a decision that is illegal or do anything that is at variance with Community legislation. That is our role. We have a vested interest in ensuring the group functions well and if there were personality difficulties, we would help. However, our experience to date has been wonderfully encouraging.

To return to the point made by Deputy Martin Ferris, it is a very open process and if any group from any section of the community considered it should have a say, it would be welcome to do so. There is a balance to be struck on the committee in regard to numbers, but it is a very open process.

Senator Denis Landy asked about the list of 36 applicants. It will be available on the BIM website. I will provide the details for the Senator.

Deputy Noel Harrington asked about retraining. This morning I took the opportunity to meet my colleagues from the Marine Survey Office to explore that issue. We have been providing a large number of grants through the FLAGs to assist with retraining. This has been geared towards moving into the merchant navy and there are also opportunities to move into offshore oil supply or wind farm work. BIM has a role in training. We have always interpreted our role strictly, as providing training solely for those involved in the fishing sector. However, the point about Axis 4 is that it recognises fisheries can be in decline and that we need to look outwards.

At a parochial level, I am from Dunmore East and see the industry there at a crossroads as to whether it will become a Killybegs or a Salthill. It sees its future in the tourism industry. Greencastle is another example where there is a spillover; visitors from Derry have become very important to the community. These communities face change and part of Axis 4 is about facilitating that change. It is not just about fishing but also about the maritime sector in a wider context. It could be about marine tourism, including whale watching, sea angling, sailing, seafood and festivals. It is about any area in a coastal community that can provide new opportunities to retain people in the area.

It is important to stress this point. Personally, there is a role for the BIM training facilities in Greencastle which are a long way from the facility in Cork to provide transition training for fishermen who might seek alternative employment. As we know, inshore fishing is seasonal. What are these inshore fishermen to do in the winter? They could be gainfully employed working on offshore supply vessels, servicing wind farms or oil rigs. This is something I will put to the board. I also discussed putting it into effect with the Marine Survey Office this morning. I will return to the Deputy in due course on it.

Deputy Noel Harrington

We all have an interest in that matter. There is urgency attached to it and it is a huge issue, including in Dunmore East.

Mr. Michael Keatinge

There is one last important point on inshore committees. FLAGs are about socioeconomic development, not HR management. I could have spoken about this issue at length if I had been asked to do so because in 1998 BIM produced the inshore fisheries management report. In the period 1998 to approximately 2010 we were very active in trying to develop the national fisheries management arrangements. That saw the evolution of four species groups, covering species such as lobster, crab, bivalve shellfish such as razor clams, scallops, shrimp and so forth. The four species advisory groups were very much bottom up, driven by fishermen. They also had complementary local committees. We had a very active committee in Roaring Water Bay, Dunmore East and Kilmore Quay. We had an active group in Dundalk Bay covering the cockle fishery, while in west Kerry there was an active crayfish group. This work culminated in the production of the lobster management plan in 2008. Sadly, however, that plan was never implemented and the groups have withered since. It is a source of disappointment for me and the team on the coast that more has not been done in that regard. These fisheries are ones that, by and large, fall outside management by the Commission; therefore, we are not talking about quota species in the normal context but about local national species such as lobster, shrimp, razor fish, cockles and so on.

Chairman

On the MSO, will Mr. Keatinge comment further on former fishing vessels that could be used for something else such as sea angling?

Deputy Noel Harrington

They could have multiple uses or a multiple licence, including for passenger use and so on.

Mr. Michael Keatinge

I cannot speak for the MSO, but we have made inquiries in this regard and discussed the matter with the office. The model we considered was one that involved a vessel used for lobster potting, where the vessel was used early on a summer's morning to check pots and then lay idle for the rest of the day. Why can that boat not be used to take passengers out to engage in sea angling or whale watching? That is not allowed currently. A person may hold either a fishing licence or a passenger licence. He or she may change during the season, but may not hold the two licences simultaneously. This is not a matter BIM can deal with; it is one for the MSO.

Chairman

It is an issue we should consider.

Senator Brian Ó Domhnaill

I thank Mr. Keatinge for his presentation. He has touched on the inshore fleet which, by and large, has been neglected during the years. There is a need to implement inshore fisheries management plans in local areas. For example, there is an inshore fishery in south Donegal where large pelagic vessels come and scoop up fish, whether horse mackerel or scad. They rip up lobster pots and everything in front of them, much to the frustration of the local fishermen. The legislation governing this area dates back to the 1800s and the maximum fine is approximately five shillings. Inland Fisheries Ireland, IFI, is working on legislation that will be brought before the Oireachtas shortly. Not only do we need this legislation, we also need management plans to protect the inshore fisheries fleet.

I am not sure whether the FLAGs are engaged in supporting the inshore fisheries sector or whether steps are being taken in that regard. The funding issue is a big one. There is massive unemployment in coastal areas. The European Maritime and Fisheries Fund has the objective of sustaining small local communities, but the funding available to Ireland is very small in the overall context. It amounts to €2.5 million over the lifetime of the CFP. When we look at the average pay-out per project in respect of the 36 projects, it amounts to around €4,700. Grant aid amounts to €2,500 per project, which is only peanuts in the overall scale of things.

If I were to come forward with a project, I would not even approach the FLAG. I would go directly to the Leader company, Údarás na Gaeltachta or the county enterprise board because I would be wasting my time in drawing down a grant that would disallow me in drawing down another grant. There is a conflict of interest and we need some joined-up thinking. The funding should either be streamlined through Údarás na Gaeltachta, the enterprise boards or the Leader programme. Deputy Éamon Ó Cuív spoke about the Leader protocol. I know Leader funding is not being brought under the local authorities, but is there anything to stop the Leader companies from establishing a sub-committee or sub-structure to administer this funding? Would there be any impediment in doing this?

Mr. Michael Keatinge

I reiterate that the money about which we have talked was from the old fund. There will be an opportunity under the new fund from the back end of 2014 to 2015. The European Maritime and Fisheries Fund is making its way through the Council and the Parliament and the decision on it will, presumably, be made in the next few months. Ireland will then make decisions on how to split its budget and how much will be allocated to Axis 1, 2, 3 and 4.

That is a decision for others and the Minister. I do not necessarily believe there is the same conflict of interest with the FLAGs. We certainly received an instruction from the Commission that the FLAGs had to have an identity and were not simply to be a sub-committee of an existing structure. It was not to be a case of letting the local development company deal with coastal issues once a month. They had to have a stand-alone identity.

I stress that once a local community is meeting at this level, if, as we have done, it attracts funding from Údarás, the Leader programme, BIM and Fáilte Ireland, no project should go undone simply because of paperwork. If it is more appropriate for a project to be included in the Leader programme, this is from where it should be funded. If it is more appropriate to fund it through Enterprise Ireland or Údarás, that is from where it should be funded. FLAGs have a maritime identity and should not see themselves as limited in any way by the European Fisheries Fund. They should see all of the other funds as part and parcel of what they are about.

With regard to whether another entity or group such as the Leader programme would be a better administrator than BIM, coming from BIM I argue that we have a tradition of administering for many years. We are trying to achieve a balance between providing an administrative service which is centred solely on ensuring governance and ensuring local communities make decisions. It is a matter of opinion as to whether any one body would be better at administering than another. I do not think we are any less efficient and do not believe any money is lost. As I stressed in my introduction, we do not take money for the services we provide. We do not have overheads and do not charge for my time or that of coastal staff. The cost is borne by the taxpayer through the general fund. I do not want to say we are better than the Leader programme or vice versa. That is not what it is about. It is about creating structures which seamlessly provide a port of call for somebody in a coastal community to interface directly with all of these funds. I hope somebody coming to a FLAG meeting will be equally able to speak to the Leader programme representative, or the representative from BIM, Údarás or Fáilte Ireland. That is our aim.

I hope this explains what we are trying to achieve. I do not believe it duplicates administration.

Deputy Éamon Ó Cuív

I hate to keep returning to the same issue, but €200,000 is de minimis. I presume, therefore, that BIM is constrained by the maximum grant being €200,000.

Mr. Michael Keatinge

The limit in the case of fisheries is €30,000. We are limited by a much lower de minimis figure.

Deputy Éamon Ó Cuív

To be quite honest, it is time for them to live in the real world because it is all a waste of time. The problem is that an illusion is created that something great is being done with FLAGs and other measures being announced. A megastructure has been established to administer the amount of money one would give to a community council. The local GAA club in a tuppence halfpenny parish would turn over €80,000 a year. I am not blaming BIM. It is just that the European Union lives in an El Dorado in throwing crumbs from the rich man's table to rural communities. It is time we went back to tell it to get real and ask how much it would spend on trying to redevelop an urban area. It would run into billions of euro and nobody would blink an eye. We have had the Ballymun regeneration project. We have this thing in our minds that giving €5,000 here and €10,000 there rural people will be happy and that it will solve all of their problems and create plenty of jobs. It has never tried it.

Chairman

The issue is whether this is an add-on to other streams of funding or whether it is seen as a funding organisation in its own right. Mr. Keating has addressed this issue. The committee's report on FLAGs must highlight some of the facts Deputy Éamon Ó Cuív has given with regard to the European Maritime and Fisheries Fund. If a figure of €2.5 million must be spent over two years and the new fund will kick in in 2015, unless it can be attached to other rural development programmes, coastal programmes or island development programmes, nothing will be achieved. As a structure, it is very good, but it all boils down to money.

Mr. Michael Keatinge

We had a horizontal meeting of all the FLAGs in November with the European Commission and representatives from the north of England and Scotland also attended. We hope the budget will be increased substantially. I hope whatever administrative framework is put in place, whether in BIM, the Leader programme or whatever else, administrative oversight will facilitate without necessarily drawing funds. We have tried to avoid using the meagre funds available to pay for administration. By doing the work through BIM administration is free.

If it is clear a small part of an area deserves a substantial focus, up to 70% of the budget can be focused on two areas. This is a difficult issue and as a public representative, I must try to balance what I believe are the aspirations along the entire coastline. How does one create a structure which does not rule somebody out in terms of funding and at the same time have a focus which creates a critical mass? What we are trying to do in allowing the 70% rule is to invest a lot of money in a particular area. I could pick any area. Every committee member is from a coastal area and all members know what I am speaking about. If funding is given to someone in north Donegal, people in south Donegal will ask why they have been left out. It is a difficult issue and we hope we are getting the balance right. Our aspiration for the future is to have a bigger budget.

This year no legitimate project which asked for funding was turned down. A problem not only in Axis 4 but also in Axis 2 and Axis 3 is that if we are offering a 50% grant, the other 50% must be provided through private sector funding. In the past two or three years, not unexpectedly, we have seen significant problems in obtaining private sector funding. It is not as though the FLAGs had a bunch of projects this year which were turned down because of a lack of money. We could have funded more projects this year if we had projects to fund. There was money left over. The level of funding, that is, the grant aid rate, is very important. Access to private sector funding is definitely a sticking point. The rules for what may be funded have become tighter and tighter. Where in the past I might have given somebody a grant for structural work on a fishing boat, this is no longer allowed. I cannot give a grant to fix the engine. Many projects have been ruled out and more will be ruled out under the new regulation for the European Maritime and Fisheries Fund. To my mind, the grant aid rate, access to private sector funding and what may be granted aided present much bigger problems than the amount of the funds available.

Deputy Éamon Ó Cuív

I disagree. Soon we will discuss the ECC timber mill which has invested between €3 million and €5 million in recent years because it is big enough to get money from a bank. People come to my office who have an idea and no money, but they are not the ones who will create employment in rural Ireland.

I remember sitting in a hall years ago when grants like that were available. My successor in the co-op and I were present and made a quick calculation, breaking it down village by village, and we concluded there was no money in the fund. It would have been better to park it to get to somewhere with serious and significant funding to have the development we wanted. We were part of a small rural village, but that was our view and we were very hard-headed. I have made the case strongly and would make it straight to the Europeans. They are not living in the real world. I wish some of them would come here to try to develop rural areas and they would soon find out what the reality was. This process is of no consequence in solving the major issues we face as communities in rural Ireland who are trying to find work for our people.

Chairman

I note there are ten or 11 fisheries local action groups, FLAGs, in Scotland which may possibly be more developed in certain areas. Are they having the same difficulties with the co-funding model? Mr. Keatinge has indicated that the rate is an issue, aside from the amount involved.

Mr. Michael Keatinge

I should be careful. There are certain projects which we can fund 100%. They would be fully public. For example, this would apply to something like a festival or a public good project. The rule is that if the project is private, according to Community legislation, the grant rate goes down to 40%. There is a figure of 60% for a semi-private project and 100% for a public project. I have included the brochure that explains all of this in the package I gave to the committee. The details are included in it. To be clear, we allow for 100% funding, but that applies to public projects only. The trouble is if a co-op wanted to build a lobster holding unit, as Deputy Martin Ferris suggested, it would be a semi-public project; in other words, it would be open to the members of the co-op and it might receive 60% funding. If a private citizen wanted to do the same, it would not be made available to others and a grant rate of 40% would be applicable. Somebody might want to conduct a survey of marine tourism and could receive 100% funding because it was a community project.

I have addressed the following point to Deputy Éamon Ó Cuív. We must not forget that Axes 1, 2 and 3 remain, as well as Enterprise Ireland and Fáilte Ireland funds. The FLAG initiative is about micro-funding and projects in receipt of grant aid of probably less than €20,000. If people wish to access more, they should come to Bord Iascaigh Mhara, as we have Axis 1 for the fleet, Axis 2 for processing and aquaculture projects and Axis 3 for wider fisheries projects for amounts up to €100,000 or €200,000. These projects are not undertaken through Axis 4 which relates to smaller scale local projects. We must not forget that bigger projects can also be undertaken, but they are undertaken through Axis 1 to Axis 3. At times we must remind ourselves that these big projects can be undertaken.

Chairman

We must be mindful that Axis 4 will remain, but when it is discussed in the context of the European Maritime Fisheries Fund, the rules allow for a maximum draw-down.

Mr. Michael Keatinge

I hope Ireland achieves a high level of funding generally, within which there should be an appropriate amount made available for FLAGs. That is a national decision. I also hope grant aid rates are inclusive. Access to private sector funding can be difficult.

Chairman

That is a useful way to finish the discussion. I thank Mr. Keatinge for coming at short notice. He will appreciate from the interaction why we considered it important to get a handle on how FLAGs are structured and working.

The sub-committee went into private session at 3.05 p.m. and adjourned at 3.25 p.m. sine die.