Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank the Acting Chairman, Deputy Ann Phelan. It is appropriate that she is in the Chair for this matter. Many Members from all parties have asked about this issue recently. I thank Deputy Coffey for using the time available to discuss topical issues to give me the opportunity to clarify matters.

The Leader elements of the Rural Development Programme 2007-13, which my Department delivers, are designed to address many of the challenges facing rural communities, including the need to increase economic activity and stimulate job creation. Expenditure under the programme has been progressing steadily and, to date, my Department has paid out over €176 million, of which €123 million was in direct project payments. This support has the capacity not only to facilitate access to sustainable employment opportunities in rural areas but also to help support sustainable rural communities and maintain healthy rural economies for business creation and development into the future.

I am pleased to announce that, following a thorough examination of project activity in local development companies, I will release a further €90 million in funding for the Leader elements of the rural development programme. As a first step, I am authorising the issuing of contracts for approximately €42 million worth of projects. I have given local development companies two weeks to notify my Department whether all of the relevant projects have the necessary approvals in place to proceed. Based on companies' responses and the remaining allocation under the programme, my Department will then notify each company of its revised allocation.

My Department had to pause project approvals in February 2013 as the value of the programme had decreased arising from the increase in the European Commission's co-funding rate from 55% to 85%. The Department had to determine the level of project commitments across all local development companies in order to rebalance the programme in as equitable a way as possible. Local development companies have continued to issue payments on all existing contractual commitments and, to date in 2013, my Department has paid out more than €14 million under the programme.

As to Deputy Coffey's question on the future of local development companies, I am keen that their expertise and experience will be harnessed as part of new structures I outlined in Putting People First: Action Programme for Effective Local Government. We need the best possible collaboration between the various programmes and entities that deliver public funding into our communities. Projects and front-line services must be put before administrative structures. The significant reform we are undertaking in our local government system will place local government in a stronger position to co-ordinate and oversee the community-focused funding delivered on an area basis. It is in keeping with the way in which we are enhancing local government's role in locally focused enterprise support. Local development companies and other local bodies will continue to play important roles in delivering services to communities and citizens in the context of the enhanced alignment between local government and local development.

The alignment of the community sector with local government will not affect funding for local community development companies, Tús and the rural social scheme, as that funding comes from the Exchequer. Rural development programme funding will come into the frame as it comes under the Common Agricultural Policy budget. Rural development funding will be finalised later this year with reference to available moneys determined by the Minister for Agriculture, Food and the Marine and me in the context of the CAP budget. This arises on foot of the completion of the multi-annual financial framework by the European Commission and Heads of State in February. I want to deliver more projects as quickly as possible while ensuring good value for money in their administration between now and the end of the programme.

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