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Leader Programmes Funding

Dáil Éireann Debate, Wednesday - 12 June 2013

Wednesday, 12 June 2013

Questions (4)

Éamon Ó Cuív


4. Deputy Éamon Ó Cuív asked the Minister for the Environment, Community and Local Government the total revised amount of funding available under the LEADER programme for projects; the amount of this funding allocated to the integrated companies to date; the total commitments entered into by the companies to date; the total spend to date; and if he will make a statement on the matter. [28197/13]

View answer

Oral answers (7 contributions) (Question to Environment)

The Leader elements of the rural development programme 2007 to 2013 commenced in February 2009 after a delay of more than two years, which reduced the time available to allocate funding to less than five years from the normal seven. During 2010 and 2011 it became evident that a significant number of local development companies, LDCs, contracted to deliver the programme were not committing funds at the level required to ensure all funding would be allocated by the December 2013 deadline in line with EU regulations. Similarly, it became clear to me that a number of LDCs were more than capable of allocating additional funding if it were made available to them. In this regard, in January 2012 my Department notified all LDCs that the original LDC allocations awarded in 2009 were no longer valid and that the programme was being opened up on a first come, first served basis to all LDCs to ensure all available funding would be allocated to eligible projects within the timeframe allowed. All LDCs were encouraged to maximise the opportunity this created for them. Some companies availed of the opportunity more than others.

During 2011 the European Commission approved a change in the maximum co-funding rate from 55% to 85% for the Leader elements of Ireland's rural development programme but only for expenditure incurred in 2012 and 2013. This had the effect of reducing the available funding under the programme from €427 million to an estimated €370 million. In addition, in late 2012 and early 2013 and after repeated requests from many LDCs, I agreed to allow significant additional programme funds of more than €19 million to be assigned to the basic services measure. In the light of all the changes to the programme, it became necessary in January 2013 to carry out a comprehensive review of the level of commitments and expenditure across its various measures in order to apportion the remaining funds among LDCs taking into account the level of commitments already entered into. As a first step, I released €42 million worth of projects which had been approved by the boards of LDCs, asking them to progress projects that were in a position to proceed. Unfortunately, only €25.5 million worth of projects in that category had all of the necessary approvals in place to proceed to contract.

Additional information not given on the floor of the House

Using an estimated final programme allocation of €370 million, the total spend to date and outstanding contractual commitments were established and deducted from the €370 million. A total of €6 million was provided for the former MFG legacy files, new Gaeltacht projects and associated administration costs. Funding was also provided for projects greater than €150,000 in value that had been submitted to my Department for assessment. The original percentage of the programme which was awarded to each LDC in 2009 was then applied to apportion the remaining funding among all LDCs. Where an LDC would receive less than 80% of its original allocation, bearing in mind that the overall programme complement had been reduced by approximately 13%, an adjustment was made to maintain the revised allocation at 80% of the original. The total funding of €370 million has now been allocated to all LDCs. To date, they have committed some €228 million on projects and spent €54 million on administration and animation.

I predict that the Minister will woefully underspend under this programme. Does he accept that if he wanted a total spend under the programme, the amount for projects approved by the end of the year would have to be 10% to 20% higher than the amount of money available? For many reasons, many of the projects which will be approved may not be completed within the very tight timeframe involved in the programme. Does he further accept that it will not be possible to sanction further projects under the regulation if he finds that there are projects going ahead after the end of the year? The regulation requires all projects to be completed by the end of this year.

More than anyone else, the Deputy knows that we are in a difficult financial position. I do not expect to receive approval from the Department of Public Expenditure and Reform to allocate additional moneys over and above what is included in the programme. I have already received the co-operation of the Department to make a great many changes to the funding for the programme to help to draw down 100% of what has been allocated. I draw the Deputy's attention to the fact that only 43% of all that has been committed has been drawn down under the current programme which has six months left to run. I am monitoring every local development company on a monthly basis and have given them until 31 August 2013 to state what they are going to do on projects to which they have already committed. If I believe a company is not in a position to draw down the money between now and the end of the programme, I will recommit the money to other Leader or local developments companies which are in a position to spend it.

If I understand the Minister correctly, the number of projects sanctioned at the end of the year will match exactly the amount of money available under the programme, which will mean that 100% of projects sanctioned will have to be completed for a full draw-down. If one considers all capital programmes across Government, particularly where there is a time limit for completion, one sees that never happens. I was looking at comparative programmes and that was quite obvious. The Government is setting about leaving money in the European Union which it could draw down. When does the Minister expect the Leader programme 2014-20 to commence? Does he expect it to commence in 2015 or 2016? Many of the larger projects require the Minister's permission to proceed, presumably before the end of the year. Does he accept that, unless it is at an advanced stage of the planning process, any project that needs planning permission will not be ready for approval? Is the Minister limiting the spend by companies under the basic services measure and the countryside and rural development measure?

I have already allocated an additional €19 million for the basic services measure and each of the Leader companies was told last December that no more money was available other than what had already been committed. We have earmarked and committed a substantial amount of money in 2009, 2010 and 2011, which will not be drawn down. I will reallocate this money after 31 August 2013. I expect that some projects committed to in 2012 may not go ahead and accept that we will not reach 100%. Inevitably, there will be projects which will not obtain the local funding or bank loans required to draw down the money. We will do everything we can to draw down as close to 100% of the money as we can. Given his own comments, Deputy Ó Cuív knows it is not possible to hit 100%. If we hit 99%, we will have done exceptionally well.

It is possible. We did it the last time.

The Government of which the Deputy was a member did not do it.