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

I welcome the opportunity to respond to the issue raised by Senator O'Donovan and to clear up considerable misinformation on the alignment process with local government as well as the funding arrangements for the rural development programme.

The Leader elements of the Rural Development Programme 2007 - 2013 finally commenced in February 2009 after a delay of more than two years, effectively reducing the programme period to less than five years. During 2010 it became evident that while on the one hand a significant number of local development companies were not committing funds at the level required to ensure that all the funding would be allocated by the end of this year, on the other hand a number of local development companies were more than capable of allocating funding.

In late 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. It is estimated that this change will reduce the available funding from €427 million to approximately €370 million, which is still a considerable amount of money.

In addition in late 2012 and early 2013, after repeated requests from many local development companies, I agreed to allow significant additional programme funds to be assigned to the basic services measure, which includes grant assistance for community centres and other projects, amounting to more than €19 million in total.

In the context of the situation as outlined, it became necessary fully to review the level of commitments and expenditure for the programme, and to adjust the individual local development company allocations in line with the reduced value of the programme taking into account the level of commitments already entered into.

My Department recently completed a comprehensive review of the programmes in every Leader area. As a first step I released €42 million worth of projects which had been approved by the boards of the LDCs asking them to confirm those projects that were in a position to proceed. If any of the projects the Senator mentioned are in the pipeline, they can be paid for out of this particular fund. If they have already gone through the system, as the Senator indicated, and had planning permission and co-funding, and met all the criteria, there is no difficulty and they will emerge, hopefully, through the Department in the coming weeks. Those projects that were in the queue have been prioritised to be released for funding.

When we did the trawl of the €42 million, we found that only €25.5 million in that category had all the necessary approvals. Perhaps some of the projects brought to the Senator's attention may be in the other €18 million that did not meet all the criteria. We are subject to serious audit by Deloitte on behalf of the European Commission so everything must be done properly.

Using an estimated final programme allocation of €370 million, the total spend to date and outstanding commitments under the programme were established and deducted from the €370 million. Some €6 million was ring-fenced for the former MFG, which as the Senator knows went into liquidation. New Gaeltacht projects and associated administration costs were transferred to contiguous local development companies.

The original percentage of the programme which was awarded to each local development company in 2009 was then applied to apportion the remaining funding among all local development companies. I ensured that nobody got less than the 80% of the original allocation. If that was applied to west County Cork, it would have gone lower. I have actually protected as much of the funding as I possibly can for the West Cork Development Partnership.

The Leader elements of the RDP have already provided significant financial resources to communities. I agree with the Senator on the good work already done. When I discovered that the momentum behind the programme was not as good as it should have been in 2011, I opened up to all Leader companies, including West Cork Development Partnership, the opportunity to apply for additional funding for additional projects.

The ones that came forward with additional proposals are being rewarded. Notwithstanding this, I ensured no company had less than 80% of the original allocation. I am glad to clarify the process. There is money in the system and available for projects in the queue and it will be paid in the coming weeks. It has to be spent between now and the end of the year. I will be returning to the West Cork Development Partnership and all other Leader companies by the end of August to clarify whether projects to which they committed in 2011 and 2012 will go ahead. If not, we will reallocate the money to companies in a position to draw it down. All of the money in the rural development programme must be committed by the end of the year.