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

The Leader elements of the rural development programme 2007-13 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 rather than the original seven. Two main issues have impacted on the revised allocations notified to local development companies last month. The first relates to overall programme performance. During 2010 and 2011 it became evident that a significant number of local development companies which had been contracted to deliver the programme were not committing funds at the level required to ensure all of the funding would be allocated by the December 2013 deadline. Any funding not committed by the end of this year will be lost to the programme. Similarly, it became clear that a number of local development companies were more than capable of allocating additional funding if it was made available.

In this regard, in January 2012 my Department notified all local development companies, including Galway local development company, that the original allocations awarded in 2009 were no longer valid and that the programme was being opened up on a first come, first served basis to all local development companies in order to ensure all the available funding would be allocated to eligible projects within the timeframe allowed. All local development companies were encouraged to maximise the opportunity this created for them. All local development companies had an equal opportunity to maximise funding in their respective areas and some companies were better than others at availing of this opportunity.

The second issue relates to the change in co-financing rates. 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, which is still a lot of money.

In January 2013, in the light of all the changes to the programme, it became necessary for me to carry out a comprehensive review of the level of commitments and expenditure across the various measures of the programme in order to apportion the remaining funds among the local development companies, taking into account the level of commitments already entered into. Using an estimated final programme allocation of €370 million, the total spend to date and outstanding contractual commitments under the programme were established and deducted from the €370 million. Some €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 awarded to each local development company in 2009 was then applied to apportion the remaining funding. Where a local development company would receive less than 80% of its original allocation, bearing in mind that the overall programme value has been reduced by approximately 13%, an adjustment was made to bring the revised allocation up to 80% of the original.

For the Galway local development companies - Galway Rural Development, Forum Connemara and Comhar na nOileán - this did represent a decrease from their original allocation. The redistribution of available funding was conducted in as fair and equitable a manner as possible, with many local development companies experiencing similar reductions. If my Department had not adjusted the allocations to ensure all local development companies received at least 80% of their original allocation, a number of companies, including Galway Rural Development and Forum Connemara, would have experienced even higher reductions and, in that context, the allocations were calculated in the fairest possible manner.

See this speech in context