I wish to share my time with Deputy Ferris.
Adjournment Debate. - County Tipperary Leader Programme.
Is that agreed? Agreed.
I thank you, a Cheann Comhairle, for allowing me to raise this issue which is important to those of us from Tipperary. The EC-funded Leader programme was launched in Tipperary as a pilot project with great pomp and ceremony. It was heralded as the mechanism for the salvation of rural Ireland and it was to provide job opportunities for the unemployed in rural parishes. Sadly, it has been a story of grief and unfulfilled promises. In its administration of the scheme the management was incompetent, unprofessional, negligent and, in some instances, unethical.
I have seen a copy of the report prepared by the consultant and I would ask the Minister has the consultant been appointed by the Department of Agriculture, Food and Forestry, and if so, what were the terms of reference given to the person appointed? This report is a damning indictment of the company. It raises very serious questions with grave implications for individuals and, indeed, for the stewardship of the board and the Department of Agriculture, Food and Forestry. The report highlights the lack of accountability, it exposes malpractice and it confirms breaches of departmental rules governing the Leader scheme.
This level of mismanagement threatens the future of the Leader programme, not just in Tipperary but throughout the country. I am convinced also that the report is too narrowly focused and selective in its conclusions. From the information that has been available to me for a number of months, which was never sought by anybody from the Department, I fear that further revelations are pending with far-reaching consequences for a wide circle of people. I wish to ask the Minister why these questions were not answered in the report. How many projects were sanctioned? Who sponsored the successful applications? How many commitments are still not honoured? How much Leader money was spent on administering Tipperary Enterprise operations? How much moneys did Tipperary Enterprise raise independently of the Leader programme? Was proper procedure followed in the purchase of equipment such as a computer system? What was the composition of the interview board for the selection of management and staff? Was there any connection between the large fees that were paid to consultant companies and board members? How much Leader money was invested in the Birdhill Trading Centre? Was it authorised by the board? What is the legal status of this company and who is liable for the huge trading losses and substantial moneys outstanding to creditors? Who will pay these creditors? I have had numerous contacts from various people throughout County Tipperary who are owed money for products and produce supplied to the company. Is it the Minister's intention to allow Tipperary Enterprise to remain as the agent for the administration of the Leader programme in Tipperary?
I wish to support my colleague, Deputy Lowry. This matter is of concern to all parties. Deputy Davern and Deputy Theresa Ahearn have expressed their concern about this matter. Indeed, I have brought it to the attention of the Labour Party Cabinet Ministers and that of my colleague, Minister of State, Deputy O'Shea, in consultation with his colleague, Minister of State, Deputy Hyland.
In the event of any problem arising with this company in the future or any wrongdoing that is proven, we must ensure that the full rigours of the law will be applied. Due to the lack of ability to operate the scheme, verbal promises which were given have caused bankruptcy and much distress to people involved in genuine projects which are promoted in this colourful leaflet. It was indicated in the map of Ireland that Tipperary was included in the Leader programme. We must live up to the promises made to these people. The funds withdrawn by the Department should be distributed proportionately and fairly to the people who were given these promises. This fiasco must not affect County Tipperary's future development of the Leader programme, which has support across the House. We must ensure that justice is done, that those responsible for any wrongdoing are brought to justice and that the Minister responsible — and I thank him for applying himself to this matter — would pursue it to the bitter end because the people of Tipperary require that of him.
I am glad to have the opportunity to update the House on the situation in relation to the operation of the Leader programme in County Tipperary by the company, Tipperary Enterprise.
Following the raising of this matter here in the Dáil last October, I immediately initiated an investigation into the various allegations against the company's operation of the Leader programme. My officials had several meetings with representatives of Tipperary Enterprise and examined records at the company's offices. I invited the board at the same time to respond to the very serious allegations which were made both in the Dáil and by concerned clients of the company. At my insistence, the company agreed to freeze its Leader bank account and a sum of £306,000 of Leader funds was, at my request, repaid to the Department.
My inquiries into the affairs of Tipperary Enterprise resulted in the board of the company appointing a four member committee on 30 November last to examine the company's activities and structures. A consultant was engaged by the committee to carry out this examination and both the committee and the consultant have been co-operating with my Department's investigation. A comprehensive interim report was presented by the committee to the Department on 6 January. Various discussions and exchanges of correspondence took place during January with a view to clarifying certain matters arising from the interim report.
The report and the investigation by my own officials revealed a number of very serious failings in relation to Leader operations by Tipperary Enterprise. It is clear that all funds advanced to the company for Leader purposes were not applied in accordance with Leader principles and in keeping with the terms of the agreement entered into by Tipperary Enterprise with the Minister for Agriculture, Food and Forestry. It is also evident that the Leader programme has been mismanaged by the company.
From the outset of my investigations into events in relation to the operation of Leader in County Tipperary, I have been concerned to ensure that the benefits of the Leader programme are not lost to the people of the county. For this reason I was anxious to give Tipperary Enterprise every opportunity to address the very serious matters which have been identified and to put its house in order. I saw the board meeting on 6 February as the final opportunity for the company to tackle and resolve the serious problems associated with its operation of Leader.
Both my officials and I, in the course of discussions and correspondence going back to late last year, had made it clear to Tipperary Enterprise that Leader moneys applied for non-Leader purposes had to be reimbursed to the Department and all other elements of the Leader agreement correctly applied. In a letter to the company on 5 February, the Department again asked that the board of Tipperary Enterprise at its meeting the following day should address the matter of reimbursement of expenditure not certifiable as legitimate to Leader and to take the necessary decisions.
The outcome of the board's meeting was conveyed to my Department late on Tuesday last, 9 February. Having examined the report I considered it to be totally unsatisfactory and as a result I called in the board of Tipperary Enterprise to meet me at noon today. At that meeting I again made it clear to the board members present that the company will have to reimburse the Department in respect of the Leader funds incorrectly spent. In the meantime a letter has now issued to the company in accordance with the terms of the Leader contract requiring Tipperary Enterprise to reimburse the Department with a sum of the order of £250,000. If the company fails to comply within 14 days, the Minister for Agriculture, Food and Forestry will be serving a notice to Tipperary Enterprise terminating the Leader contract with the company.
I would like to assure the House of my concern in all of this to ensure not only proper spending of public funds but also the continued availability of Leader to the people of County Tipperary. The House should note that Leader activities are covered by insurance guarantees. I am committed to the earliest resolution of the cases of project promoters who have been promised grant aid for legitimate Leader schemes. This issue is being addressed immediately. I am of course also totally committed to ensuring that the balance of the Leader funds for County Tipperary — amounting to over £2 million is secured and I am confident that this will be achieved.
In conclusion, I would like to express my whole-hearted attachment to the Leader ideal of a bottom-up approach to rural development. I would like to assure all Leader groups in the country that my resolve in this regard remains unshaken. I propose to meet all of the Leader groups shortly to consider all aspects in relation to the operation of Leader.