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

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In this regard, in January 2012 my Department notified all LDCs that the original LDC allocations awarded in 2009 were no longer valid and that the programme was being opened up on a first come, first served basis to all LDCs to ensure all available funding would be allocated to eligible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.

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