I thank the committee for affording us the opportunity to come before it today to discuss the administration and implementation of the rural regeneration and development fund. I am accompanied today by my colleagues, Eddie Forsyth, principal officer with overall administrative responsibility for the fund, and Fiona Creegan, assistant principal officer, also with responsibility for fund administration.
The Department of Rural and Community Development was tasked with implementation of the fund in 2018. The objectives of the fund are a good fit with the mission of our Department, which is to promote rural and community development and to support vibrant, inclusive and sustainable communities throughout the country. In fulfilling this mission, the Department assists communities by providing the right supports and conditions to encourage economic and social development in their areas. The rural fund is only one such support and it is complemented by a wide range of additional programmes and schemes which help to maintain the growth and vitality of rural areas and which support individuals and organisations to meet the needs of their communities.
Our mission has been further aided by the strategic focus and investment provided through Project Ireland 2040. The investment delivered under Project Ireland 2040 has enabled the Department to increase significantly the level of funding support available under the range of schemes and programmes that we operate, from the roll-out of the rural fund to capital investment in our libraries. Project Ireland 2040 also rightfully identifies the strengthening of rural economies and communities as one of the ten strategic priorities at the heart of planning and investment decisions which will be made across Government over the coming years. The Department is proud to take the lead in achieving progress on this goal. One of the key ways we will achieve this is to ensure that future growth is balanced and that all parts of the country share in prosperity, and we endeavour to do this in a sustainable way. The goal of strengthening rural economies and communities is complemented by the other strategic priorities identified under Project Ireland 2040.
The overall large-scale investment set out in Project Ireland 2040 is calibrated to deliver upon these priorities over the lifetime of the plan. Specific support for key priorities is provided through the four funds established under Project Ireland 2040. These are the €500 million disruptive technologies innovation fund, the €2 billion urban regeneration and development fund, the €500 million climate action fund and the rural regeneration and development fund we are here to discuss today.
As part of Project Ireland 2040, an additional €1 billion was provided to the rural regeneration and development fund over the period 2019 to 2027. The purpose of the fund is to provide investment to support rural renewal, strengthen and build resilience in rural communities and assist in the regeneration and sustainable growth of rural towns and villages. Since the fund's establishment, the guidelines relating to eligibility have remained relatively unchanged. The fund focuses on all settlements and rural areas with fewer than 10,000 people located outside the five city areas. Rural towns with a population of more than 10,000 people are eligible to apply under the urban fund. Certain towns with fewer than 10,000 people but with more than 2,500 jobs and which function as significant centres of employment may also be eligible under the urban fund but no individual project can apply for both funds.
For the purposes of compliance with public financial procedures, the lead party for an application to the fund must be a State-funded body. This is defined as body established by central government or with central government approval, which receives a portion of its funding from the State. This covers local authorities, LEADER local action groups, State agencies and so on. Community organisations and voluntary groups, private sector interests or philanthropists cannot act as the lead party to an application but can and do partner with appropriate State-funded bodies to access the fund.
Calls under the fund seek applications in respect of category 1 or category 2 proposals. Category 1 relates to proposals for capital projects which are fully compliant with planning and consent and are ready to commence. Category 2 relates to projects which require development support to become ready for full category 1 status. As the fund seeks to support projects of sufficient scale and ambition to make a significant contribution to the objectives of Project Ireland 2040, the minimum funding request for category 1 projects is €500,000, with no maximum funding specified. There is no minimum or maximum funding request under category 2.
In order to successfully unlock funding, the rules of the fund require matching contributions to be put forward by applicants. The fund will provide up to 75% of the total project cost with at least 25% to be provided in matching contributions by the applicants. A minimum of 10% of matching contributions must be in cash. A higher maximum contribution from the fund of 80% funding is permissible in certain circumstances. Matched funding may be in the form of a combination of wider Exchequer or State sector expenditure, local authority investment, community investment, philanthropic contributions, private sector investment or other asset contributions. Funds secured from our existing programmes are not eligible to be used as matched funding.
Calls for applications under the fund are made on a competitive basis. The applications are assessed based on their alignment with the objectives of Project Ireland 2040 and the fund. In order to meet the objectives of the fund, proposals need to demonstrate several qualities. These include the capacity to deliver on key strategies, such as Project Ireland 2040, county development plans, local economic and development plans or forthcoming regional spatial and economic strategies; collaboration between key stakeholders in the area or sector concerned and the endorsement of key stakeholders, such as the relevant authority or agency in the area or sector concerned; sustainability, that is, delivering lasting benefits which will outweigh the investment made, as well as financial independence; additionality, meaning the project could not have taken place without the fund and that the fund is not being substituted for investment already provided for; value for money, that is, delivering outputs and outcomes which will justify the investment; leveraging of funding from parties to the application; a significant and sustainable impact on social or economic development in rural areas; and transformative effect, the potential to deliver transformative change for a rural town or village and act as a catalyst for increased activity.
The Department has avoided limiting the type of activities that can be supported from the fund. We want the relevant local authorities and other State-funded bodies to consult and engage with communities in rural areas to establish the type of projects which will deliver the most beneficial effects in their areas. In that regard, the applications received to date and the projects which have been allocated funding have related to town and village regeneration, enterprise development, tourism development, digital and co-working initiatives, libraries, arts and cultural facilities, community facilities and sports and recreation facilities. The successful projects often combine more than one of these elements.
The first call under the fund was launched in July 2018, with applications welcomed under both category 1 and category 2. The Department undertook a series of regional information sessions to raise awareness of the fund and to assist applicants in preparing their proposals. Online information resources were also put in place, including the establishment of a mailing list, a dedicated website for frequently asked questions and an email address for specific queries, the outcomes of which were shared with all interested parties. A total of 280 applications were submitted under the first call. Of these, 126 were category 1 applications and 154 were category 2 applications. On foot of a comprehensive assessment process, 84 projects emerged as successful from the first call, comprising 38 category 1 projects and 46 category 2 projects. The 38 successful category 1 projects were allocated €69 million from the fund while the 46 successful category 2 projects were allocated €17 million. In total, the successful projects under the first call were allocated €86 million in support from the fund and will deliver a total investment of €117 million.
It should be noted that under the approach taken by the Department, the announcement of allocations of funding are in principle only and remain subject to the completion of final due diligence, including confirmation of matched funding and oversight of any emerging procurement costs. In due course, successful applicants enter into contractual arrangements with the Department, which set out milestones upon which payment dates for grant funding are based.
Regarding implementation, the Department is satisfied with the level of progress achieved in the delivery of projects which were successful under the first call. Many of the projects are large-scale and multi-annual in nature, but several projects have already reached their first and subsequent milestones and funding has been released for them. The Minister for Rural and Community Development, Deputy Ring, recently opened the first project to be fully completed with the support of the fund, the gteic digital and innovation hub in Spiddal, County Galway, developed by Údarás na Gaeltachta. Further project completions are expected in the weeks ahead. As of this week, €22 million has been drawn down from the fund by 46 separate projects. The Department is continuing to engage closely with project leads to provide whatever assistance is needed to manage the delivery of projects in line with expectations.
Following the completion of the first call in February 2019, the Department engaged with all applicants, both successful and unsuccessful, to garner feedback which would assist us in designing the second and subsequent calls for applications under the fund. Bilateral discussions also took place with key stakeholders and a feedback and discussion workshop was staged in March 2019. The detailed feedback provided was welcomed by all parties and was incorporated into the second call for applications, with changes made to the focus of the call and the application material required.
The second call for category 1 applications was opened in April 2019. The Department undertook a comprehensive process of engagement with all interested parties to communicate the fund's objectives and the level of information required as part of the application process. The feedback which emerged from the first call, which was supported by the policy discussions the Department had undertaken over that period, emphasised the huge importance of driving increased economic and social activity within our towns and villages. The importance of vibrant towns and villages in attracting investment, drawing in additional visitors and increasing residency, came through strongly in all our contacts to date, as did the knock-on benefits for the rural hinterlands which surround these centres. On that basis, the emphasis of the second call was on town and village regeneration and development that had transformational potential. The second call for category 1 applications closed on 6 August 2019. There was an excellent response from all across the country and 69 applications seeking a total of €160 million from the fund were received. The quality of the applications submitted in the second round and the standard of the projects proposed was extremely high.
I will now give an overview of the fund's assessment process. The assessment of applications is a multistage process. First, applications are scored by the Department in accordance with the published appraisal scheme. Secondly, the applications are categorised for submission to an independent project advisory board. The board is informed by the marks awarded to applications and an overall view of the cost of the projects and the level of funding sought relative to the proposals. It takes account of the need to ensure balanced regional development and the budgetary resources available from the fund for the call. Any outstanding issues or queries are also flagged.
The third stage of the assessment process involves seeking high-level guidance on the applications from the independent project advisory board. The project advisory board for the fund was established on foot of a Government decision applied to all four funds established under Project Ireland 2040. The advisory board for the rural fund is comprised of representatives from several Departments. In addition, the board has two independent members with experience in rural and local development. Another member of the board is the fund's independent process auditor, who is charged with providing guidance to the Department on the overall assessment process to ensure best practice and fair procedures are followed.
As part of the assessment process, the board is tasked with providing high-level guidance and observations on the suitability of proposals for funding in line with the fund's objectives. The board helps the Department to formulate recommendations for the Minister on projects which should be considered for funding. Board members are given access to all application documentation and all departmental assessments on each project, as well as summary information for convenience. The board provides observations on individual projects which are collated and used to inform the preparation of a report on recommended projects. The board may also identify further issues for the Department to follow up. Following the board’s considerations, the fourth and final stage of the assessment process is the preparation of a recommendation report by the Department for the Minister, identifying the outcomes which emerged from the assessment process and the discussions of the board. The final decision on successful projects to be allocated funding rests with the Minister.
On foot of the assessment process undertaken in respect of the first call, the Department prepared two reports on recommended projects for the consideration of the Minister. The 84 recommendations contained across the two reports were accepted by the Minister and represented the final outcome of the first call, as announced in September 2018 and February 2019. A report on the assessment process undertaken in respect of the second call for applications was submitted to the Minister in October 2019. The Minister accepted all 26 recommended projects detailed in the report. On 6 November last in New Ross, the Minister announced details of the projects which were successful under the second call. The 26 successful projects, which are located across the country, were allocated €62 million in support to deliver a total investment of €95 million. The focus on regeneration which was the basis for the second call came through strongly in the projects which were successful. Eighteen of the 26 successful projects should deliver town and village regeneration in different ways.
As I have alluded to previously, the best projects combine regeneration with other priorities, such as renovating heritage structures, providing focal points for activity in town centres or delivering arts or library infrastructure. The successful project in Castleblayney will refurbish the historic Hope Castle gate lodge and deliver a modern public library and cultural and creative space in the centre of the town. The Wexfordia project in New Ross will deliver a new visitor and heritage attraction in the centre of the town, using the existing streetscape and regenerating a key building on the riverside to build on the town's Norman heritage. Once more, the successful projects cover a wide range of sectors. Economic and enterprise development underpins the projects in Monksland, County Roscommon, and Roscrea, County Tipperary. Tourism and recreation will be delivered by the Barrow blueway in counties Kildare and Laois. Community development forms part of the case for the projects in Ballinamore, County Leitrim, and Loughrea, County Galway. As with the successful projects under the first call, the 26 successful projects in the second call have been approved in principle only for now. The Department is engaging with the lead parties as part of the due diligence process. I expect we will shortly be in a position to issue provisional letters of offer regarding these projects. Second stage and full approval for the projects will follow upon completion of procurement. We hope to see significant progress on these projects in the new year.
We believe the projects which were successful under the first and second calls from the fund will deliver significant benefits in their local areas, counties and regions for many years. The Department remains anxious to ensure the fund continues to support the best projects in the areas which most need them. We are committed to continued consultation and feedback with all stakeholders, including this committee, with a view to ensuring local authorities and other organisations and the communities they serve are fully informed of the aims, intentions and requirements of the fund. As it did with the first call, the Department will schedule an open and detailed feedback session to give helpful feedback on all the applications received for the now-concluded second call and to assist those applicants to prepare for future calls. If further queries remain after this open meeting, the Department will endeavour to address them with the applicants. The Minister intends that a second call for category 2 applications will be announced shortly. The Minister and the Department are encouraging all potential applicants under the fund to continue to work to develop new and existing proposals which will benefit their local areas. The Department will continue to provide all appropriate assistance in that regard.