Michael Kitt (Galway East, Fianna Fail)
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I thank the Ceann Comhairle for allowing me to raise this matter and the Minister for coming to the House.

There has been some confusion on the question of community project funds through the Leader programme. While this issue was raised briefly at Question Time, I seek further clarification. A headline in the Connacht Tribune three weeks ago read, "Galway takes an €18 million hit in community project funds", while it was stated in the article that "Leader groups face a race against time for sanction of schemes as EU deadline looms". There was great concern that, if this was to be the case, it could be another four years before projects could be considered for funding under a new Leader programme. There was also a feeling that not all of the European moneys would be drawn down. While that is one view, another from the people in the east Galway rural development office was that while they had a budget of €12 million which was agreed to by the Minister and while there was funding towards enterprise and community measures, there were 40 existing applications for projects which would cost close to €5 million, with only €1.5 million to allocate. Of course, there are many other community groups which wish to apply and cannot do so if that is the position.

This has been a very successful scheme. I can point to a project in my own parish of Caltra where the community centre is almost complete and where there is a very successful relationship with the Leader company. The project has involved a lot of fundraising which is still ongoing and I hope we will be able not only to develop the community centre but also to have a sports field and other facilities when the centre is complete.

The article in the Connacht Tribune went on to discuss not only the situation in east Galway but also that of Comhar na nOileán in the Connemara Gaeltacht area which only has €4 million to allocate by the end of the year. Forum Connemara has an allocation of €7.7 million, of which it has spent €1.9 million, leaving it with a balance of approximately €5 million to allocate. Meitheal Forbartha na Gaeltachta which shut last year had only paid out €1.9 million of its €4 allocation. This raises many questions. The same newspaper contained another article in which it was stated, "Development groups claim centralisation of Leader programmes will put rural communities back 30 years".

These concerns are coming to a head. I ask the Minister to clarify these issues and assure rural communities that the good work being done will be allowed to continue. I hope he will be able to sanction other projects and, most importantly, allow other groups to make applications where they believe funding will be made available for either enterprise or community measures.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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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.

Michael Kitt (Galway East, Fianna Fail)
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I am glad to hear the Minister believes he is being fair in the allocations, but I make the point made in the Connacht Tribune headline that Galway was to take an €18 million hit on community projects.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I cannot be responsible for the Connacht Tribune.

Michael Kitt (Galway East, Fianna Fail)
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It is fearless, like the Irish Farmers' Journal. I am glad that the Connacht Tribune is highlighting this issue as it is an important one. The Minister did not refer to the fact there were many people who wanted to make applications, as any representative from Galway would tell him. I would feel very sorry for them if they were unable get their applications in on time.

A concern was raised by Pat the Cope Gallagher, MEP, about a possible reduction in rural development funding if, for example, management of the Leader programmes was moved away from the local development companies. Again, I would like the Minister to deal with this point. If people are trying to provide community facilities or undertake enterprise projects and the Leader companies are not involved, where is the alternative source of employment in rural areas? There will be serious ramifications if rural development funding is reduced. I hope the Minister will keep his mind on this issue and perhaps even rethink the plans for the future of the Leader programme, if that were to be the case. My attitude has always been that the programme is working well, certainly in the case of the east Galway projects about which I know more than the west Galway projects Is there a need, therefore, to change something that is working well? I would say no and if the Minister has other ideas, I would certainly like to hear from him. I hope he will give attention to the funding problems being encountered in the case of the east Galway projects.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The rationale behind the alignment of community projects and local government is to reduce administrative costs and provide more money for front-line services and projects for individuals and communities. I am sure the Deputy shares my objective in doing this. Some €32 million has been requested by local development companies out of a total of €90 million to be allocated this year and next year.

That amounts to 30% of all moneys available. It is an enormous amount of money in administrative funding and I would love to see some of it diverted to ensure local development company projects in Galway could be considered. Such a heavy administrative burden is not sustainable when CAP funding is being reduced, the rural development aspect will be reduced and we are trying to give as much money as possible from the Exchequer to local development companies. Becauseof this administrative burden projects and communities are being deprived of necessary funding.

About 2,000 people are employed in the various programmes in the community sector. A total of 250 people are employed under the rural development programme. It is only the administrative part that is affected by this alignment. There will be no change in employment for local community development projects, Tús and rural social schemes. What is at issue is how we can maximise the opportunity for the rural development programme under the CAP. The Minister for Agriculture, Food and the Marine will have a role to play in that regard by the end of the month.

I understand and accept the frustration of local development companies at the reduction in the rural development programme allocation, as the overall size of the programme has reduced by approximately 13%. As a result of this and in the manner I have outlined, I did my best to ensure the Galway Leader companies and other companies such as Comhairle Ceantar na nOileán and FORUM Connemara would be underpinned. If the Galway Leader companies had heeded my request in January 2012 when the scheme was opened up on a first come, first served basis, like so many other companies, they could have gained access to more funding, but they chose not to do so. Therefore, I have rewarded the companies that did and have had to cut back for companies that did not subscribe to the letter sent in January 2012.

We have received approval from the European Union for the alignment of community development and local government to streamline our structures and maximise the opportunities for projects. We have provided that opportunity in the context of a working committee in place to implement that decision. At the end of August I will review the available funding again. I am monitoring on a weekly basis the funds coming in and how we can secure the maximum drawdown. I have an interesting figure for the Deputy. Of the moneys committed to date since 2009, only 43% has been drawn down by the Leader development companies and project promoters. There are only six months left between now and end of the year; therefore, I have to question what people have been doing in the past four years in committing and drawing down funds to ensure the sum of €370 million is actually spent. The last thing we want to do is to allow money to remain in the fund to be handed back to the European Commission. That is not our objective. In taking this decisive course of action we are maximising the opportunity to spend. If money is not drawn down, the Galway rural development company and other Leader companies will have an opportunity at the end of August to have it reallocated. The drawdown has been disappointing. I ask the companies involved to work more constructively with the Department to ensure the full amount will be committed by the end of the year and that the moneys can be drawn down as quickly as possible thereafter.