Leader Companies urged to ensure that all funding is spent before the end of the year
The Minister for the Environment, Community and Local Government, Mr. Phil Hogan T.D, today (4th July, 2013) urged Local Development Companies (LDCs) to ensure that all funding that has been allocated to them under the LEADER elements of the Rural Development Programme 2007-2013 (RDP) is fully committed and spent before the end of the programme. On 21 May the Minister allocated the final tranche of some €70m in funding under the programme. The total amount of funding available under the current LEADER Programme is approx. €370 million and includes both funding for projects and LDC administration.
Current EU rules provide for expenditure of up to 20% by LDCs on the administration of the Programme. This means that up to €74m could be spent on administration.
Minister Hogan is seriously concerned about the potential risk of a loss of LEADER funding to rural areas, as a result of decommitals that might arise in some Local Development Companies after the end of this year. At this late stage of the Programme, only 34% of the total value of projects approved has been drawn down under the Programme. There are only 6 months remaining for project approvals, and projects approved that do not proceed beyond 2013, and the funds decommitted cannot be reallocated and will therefore be lost. So with almost two thirds of the Programme funding still to be drawn down and spent by the Local Development Companies, Minister Hogan is very much aware of the risk presenting that not all of the much needed funding will be spent by Local Development Companies.
“The poor performance of some Local Development Companies has unfortunately been a feature of the Programme. For example last year only 60% of the funding I provided for LEADER was actually spent and this meant that €39m allocated was not drawn down by Local Development Companies for projects that I’m aware are badly in need of funding. How can this be the case – I’m perplexed,” said the Minister.
“Earlier this year, when there was a temporary embargo on new approvals, as I had ordered a review of the scheme before we notified LDCs of their final allocations under the Programme, I was pressed to release funding. I was informed by the Local Development Companies nationally that they had projects approved in principle to the value of €42m, and the only thing preventing them from commencing was the confirmation of financial support. On lifting the embargo however, it subsequently emerged that of these, projects with a value of only €25m will now proceed. I am therefore concerned about what I am being told by the Local Development Companies on the one hand and what is actually happening on the ground.”
“My sole wish is to ensure that every euro of this valuable funding is allocated and drawn down within the relevant time constraints and that we are not in the same position at the end of this year, with scarce resources allocated for the LEADER Programme remaining unspent by Local Development Companies. This is not acceptable,” added the Minister.
“I am also asking the Local Development Companies to re-examine their spend on administration to see if it can be reduced to the bare minimum to free up additional funding for actual projects. It is imperative that we maximise the spend on projects and that local communities see the benefits on the ground. I am convinced that savings can be made in this area.”
There has been much comment recently in relation to my proposals for the Alignment of Local Government and Local Development. There has been talk of the loss of funding and more recently job losses. While this scaremongering may very well be intended to serve other agendas, I want to make it clear that my sole agenda is to protect frontline services to local communities. We must reform the way this programme is delivered to maximise the end product which is the service provided to the community.”
The LEADER element of the RDP provides the resources and support necessary to facilitate the continued sustainable development of rural communities in these difficult times. The Programme not only facilitates the development of small scale community infrastructure to ensure a strong community foundation for a healthy rural economy but it also provides vital support for rural entrepreneurship and in this context has the capacity to support the creation of sustainable jobs in rural Ireland.
The LEADER elements of the RDP have already provided significant financial resources to communities and individuals all over rural Ireland since it commenced in 2009. To date over €126 million has been provided to community and private promoters with approximately a further €113 million in commitments yet to be drawn down.
“My Department will continue to work with the Local Development Companies delivering this funding to ensure that only the best projects with the highest impact are funded. It is our joint responsibility to maximize the impact of every single euro while supporting the continued and sustainable development of rural communities and providing critical support for rural entrepreneurship into the future” said Minister Hogan.
