MINUTES OF EVIDENCE

Friday 25 May 2001

Members present:

Mr Savage (Deputy Chairperson)

Mr Bradley

Mr Dallat

Mr Douglas

Mr Ford

Mr Kane

Mr McHugh

Witnesses:

Mrs J McVey )

Mr M McDonald ) Rural Development Council
for Northern Ireland

Ms C Taggart )

Mr S Henry )

200.

The Deputy Chairperson: You are welcome.

201.

Mrs McVey: The Rural Development Council appreciates the opportunity to address the Committee and to answer any questions. I will briefly introduce the council members.

202.

Mr McDonald: I will briefly summarise the council’s position, as a supplement to the written evidence that we gave to the Committee. We will deal with any questions or queries that might arise from our discussion.

203.

The RDC has revised its strategic direction, and that is spelt out in the draft strategy document that has been circulated to the Committee. We await departmental approval to proceed with the new programmes. We listened to what the Minister said this morning; it is unfortunate that we still cannot do the business for rural communities.

204.

The new areas of intervention, for the council, are the result not only of the considerations of the Public Accounts Committee and the Northern Ireland Audit Office considerations, but of the changes that we perceive. Those changes reflect the need to address the challenges facing people in rural areas. The rural constituency is changing. I do not need to tell the Committee what the facts and figures are, but there are several key indicators that are worth noting. We have taken account of those indicators in attempting to draw up our new strategy.

205.

Rural population is rising faster than urban population — it is roughly 4·8 compared to 4·1. It is difficult to find a job in a rural area, and a large proportion of the rural population has no formal qualifications. Women on farms are less likely to have a job than women not living on farms. The relevant statistics are as follows: [90] farm women 43%, non-farm women 57%.

206.

The overall economic structure of the countryside is changing. The Committee will be aware of the dependency on agriculture and, increasingly, on tourism. Agriculture accounts for about 4·5% of the gross domestic product and 6% of employment. Investment in tourism in Northern Ireland is well behind the United Kingdom and the Republic of Ireland. We have a lot of catching up to do. In the food-processing sector, there are about 20,000 jobs, and there is a large amount of part-time employment in the manufacturing sector, which tends to be ignored by Government programmes; assistance is needed. There are opportunities for farmers who work part- time on the farm to provide assistance elsewhere. Some of our initial work on the previous rural development programme persuaded bodies such as the Local Enterprise Development Unit and the Department of Enterprise, Trade and Investment to revise their programmes into mainstream support for the part-time labour market.

207.

There is less private sector business in rural areas, and there is a lower proportion of employment in public administration. The Department representatives talked this morning about the inability or reluctance of the private sector to take risks, which is why a programme such as this is needed. Somebody must take those risks. Business creation in rural areas is hampered by a lack of access to distribution channels and a poor communication infrastructure and is generally aimed at local consumer markets or niche markets with a strong local identity. We must enable our rural businesses to get into the global marketplace, which we cannot do without the proper IT channels.

208.

Northern Ireland has a lower farm size. Seventy per cent of the land is in less favoured areas, and 53% of our farms are too small to accommodate one full-time job. That is a serious statistic; only 31% of farming households depend solely on farming for their incomes. Almost 70% of farm income must come from another source. There is a need to regenerate rural areas. BSE and foot-and-mouth disease have had a devastating effect, not only on farmers but on the entire rural economy.

209.

There is a great deal of social exclusion. An increase in long-term unemployment levels is affecting the quality of life in rural areas. A crude measure of that is the fact that rural earnings tend to be 10% lower than urban earnings. Transport is a recognised problem, bus services are infrequent, there is only very limited access to the rail network, and rural roads are, at best, classified as secondary. The rationalisation of hospital services is a major issue for rural people and access — or lack of it — to centralised facilities must be improved. Rural Northern Ireland has many attractive and valued landscapes; that is a major asset.

210.

Those are just some of the issues that have influenced our strategy and our programmes. The measures in our strategy are designed to improve the economy, access to services, the environment, business, part-time employment, culture and heritage, village pride and IT. However, we must be realistic. The council might attract only a small proportion of departmental resources. The Minister mentioned a figure of £100 million for all the measures. We are likely to have 0·5% — perhaps, £15 million — over a six-year period for programme delivery and grant to the non-profit- taking community and collective sector. Farmers did not embrace that sector easily in the previous RDP, and that was one of the issues that the Public Accounts Committee raised. Farmers tend not to form together easily as collective non-profit-taking groups.

211.

The RDC exists as an independent body outside Government, with a capacity to advise and challenge Government policy as regards its impact on rural Northern Ireland. In many respects, that role should complement the functions of this Committee. We are keen to explore how our organisation might assist the future work of the Committee. The rural baselining programme being developed within our strategy might provide a mechanism to do that, with the collation of primary and secondary data showing the current situation and likely future trends in the rural community in Northern Ireland.

212.

The Countryside Agency has already produced two rural baselines for England, and we have had discussions with it about our proposals. Northern Ireland does not have a rural White Paper. The Countryside Agency had significant influence on the content of the rural White Paper for England. I hope that our baselining service, when it is operational, will assist this Committee to assess the impact of Government policy on rural areas of Northern Ireland and, importantly, find solutions for rural problems.

213.

The Committee’s questions, which were answered in a written response from the council, are all the more timely and appropriate, given the current situation. Participation by all sections of rural communities must be encouraged. We accept that and are determined to improve it. The council’s equality and targeting social need schemes will provide the framework for that. Socially excluded groups will be encouraged and assisted to participate in local community regeneration plans and proposals. In the original RDP, the Department was responsible for delivering programmes directly to the community sector, but the council is closer to the community sector. We have a database of between 400 and 500 community groups, and there are 1,000 applications under the Peace programme. We know who our target audience is, and we will be able to get to them. Those groups will relate to an organisation that is independent and outside Government. We are one step ahead in encouraging participation and getting in contact with socially excluded groups.

214.

The projects that we are likely to fund will be much smaller. There was much comment and criticism in the audit report about the appraisal of large projects and the ability of groups to run a £2 million project. Many communities that we engaged with did not have those skills, but they do have the capacity to take on small projects of, say, £50,000 or £100,000 and create one or two jobs and bring in socially excluded people. That is what they want to do, and projects must be designed to allow that.

215.

We also need the flexibility to deal with crises, so that we can target support at appropriate areas. The current foot-and-mouth crisis is a prime example. The council could not provide compensation to cover direct or indirect losses. However, we can assist local communities to prepare and investigate strategic solutions to problems. Some members of staff have already engaged with people in the north Antrim and Cushendun area, and we are considering requests from the lough shore community for similar support. We are about to engage with the Northern Ireland Hotels Federation, in response to their request for support, to investigate the development of a strategy in the aftermath of the foot-and- mouth epidemic. That type of policy intervention by the council can support the delivery of financial aid to the programmes that I have mentioned.

216.

The RDC has come though significant changes in the past two years to prepare operationally and strategically for the new RDP. We are ready to play our part with Government Departments and the Committee in the regeneration of rural Northern Ireland. There must be a joined-up approach to finding solutions to the problems facing our rural communities, and we welcome the opportunity to work closely with this Committee and the other Committees whose remit extends to rural areas. The problems facing agriculture cannot be solved solely by the Department of Agriculture and Rural Development, or by this Committee. We need the rural baselining and associated rural-proofing mechanisms both inside and outside Government to ensure that our rural areas are protected and enhanced.

217.

The Deputy Chairperson: The council has referred to the need for farmers to focus on collective and integrated action under the RDP, although individual support for the farmer will be controlled by the agrifood development services at departmental level. Can you explain the difference between support at programme level and support at departmental level? Is it not all part of the same RDP?

218.

Mr McDonald: The RDC gets 0.5% of the departmental budget, which means that DARD has 99.5%. We are all trying to encourage the development of a vibrant agricultural community. At programme level, it is the Department that decides how to allocate the money; we get a budget of £15 million. We can make decisions at local level and within our budget. We can engage directly with the farm unions, in order to explain the programme and get farmers to embrace the notion.

219.

We must be realistic. A farmer who faces a reduction of 75% in his income will not be interested in forming a community group that will not show profits for the next five to 10 years. As well as community activity, there must be direct support to tackle the crisis. For example, in the 10km areas, a team of experts should work with farmers to find out what the problems are and agree potential solutions. The team could help farmers to secure funding to solve their current problem and advise them on what to do in the longer term. There must be a programme approach from the Department and a practical approach from people on the ground.

220.

The Deputy Chairperson: Farmers need to know what the Government are doing.

221.

Mr McDonald: Yes.

222.

The Deputy Chairperson: According to the submission, there are three levels at which farmers could become involved in the RDP: collective and integrated action under RDC programmes; individual support for the agri-food development service; and involvement with the rural development division directly or through the LEADER groups. Will that programme ensure that all groups, particularly those not previously involved in the RDP, are made aware of their options, in order to maximise their involvement?

223.

Mr McDonald: It is important that a clear message be given. The Department has employed public relations consultants; we also use PR consultants. However, that should be supplemented with hands-on support from field officers and other staff, who can help our clients with the application form. For many people in rural communities, a complicated application form that requires details of monitoring information can be an alienating experience. For our programme, we intend to send out a simple application form to establish eligibility, in order not to waste people’s time in filling out a detailed form. We did that with the Peace programme, and it proved to be successful. People need hands-on technical support to submit the applications; it is insufficient simply to advertise.

224.

We supplement that support with information evenings and roadshows, targeting the representative bodies, including the farming unions and women’s networks. It is resource intensive. If we are to provide the service, we must be prepared to spend money; it is very time-consuming and requires substantial administration.

225.

Mr Ford: I am a great believer in joined-up government. It is a good principle and I am not convinced that we have it in Northern Ireland yet. Are you confident that we have established lines of demarcation between RDC, the Rural Community Network and DARD’s rural development division. Do the people in the communities know who does what?

226.

Mr McDonald: The target audience is the community and collective sector. Previously, we ran LEADER+ programmes that funded the private sector; we did some ad hoc research; we funded the community sector; and we were involved in community development. We straddled all parts of the programme. Now, we are focused on the community and the collective sector.

227.

We have got our own house in order. It would be going too far at this stage to say that Joe or Josephine Public fully understands: they do not. The rural community must still go through a long learning process. It is not impossible, but we need to put a lot of effort into getting the message across clearly. I hope that PR consultants can assist us with that, but it comes down to the quality of the people whose job it is to point people in rural communities in the right direction.

228.

Private sector businesses know that the RDC is not their target audience. Farmers who want a grant for their own business will know that the council does not provide that resource. I can assure the Committee that we are clear about who our audience is, and we are prepared to go after it. There must be co-operation at programme level to make sure that a clear message is passed down to rural communities. That is beginning to happen.

229.

Mr Ford: Do you have any suggestions as to how the different roles might be explained to people, other than through the laborious work of field officers? That relates to the question of resources and relates to the way in which the Department operates and links up with other Departments. Does Northern Ireland need a rural White Paper? Is there a need for DARD to engage in more cross- and intra-departmental work, in order to liaise better with projects, with the RDC and with the RCN?

230.

Mr McDonald: On a practical level it does not matter whether we have a rural White Paper. England and the Republic have rural White Papers, but those countries do not have the same mechanisms as we have here. We would be better to concentrate our efforts on refining our mechanisms, rather than going after a White Paper. Rural-proofing is in the Programme for Government, and, like everyone else, we wait with interest to see what that will entail. It might take the form of a revamped rural development steering group, or it might involve people at a political or departmental level.

231.

We cannot comment on Government policy until we have the statistics. When a new policy is announced, if we have the statistics, we can say what the likely consequences of a particular policy intervention will be. We can look at the outcome — environmental or economic — and we can say whether a policy will make things better or worse. If we can get the baseline right, we will be better able to carry out rural-proofing.

232.

Ms Taggart: This morning, the Minister spoke about the use of consultants to advertise or launch the RDP, and that is a crucial part of the dissemination of information. However, that is only one of the ways in which we intend to communicate. We can also get the information across to people by word of mouth, through our field staff and by passing information on to other organisations that work in local development, such as district councils and partnerships. We intend to host information roadshows, which will be done at sub-regional and sectoral level. We will work with other agencies to identify potential user groups, such as ethnic minorities, women and farmers. We will work with the appropriate agencies to identify and invite certain people to an evening, so that we can explain the RDP to them and to identify the people who would be the best source of support for them.

233.

We also have an extensive database of groups that we have worked with in the past and groups that other agencies are working with, and we will contact those people by mailshot with information packs about the programme and the opportunities for funding and support through the RDC. We also use the databases that are available to us from partner organisations. We intend to host innovation workshops, at which we will invite people who have project ideas to develop those in a fashion that is appropriate to their community. Thus, we will be working with projects at development stage, rather than at information dissemination stage.

234.

We are compiling an expression-of-interest database. We log the details of people who telephone us or people with whom we are working who are looking for opportunities. We inform them about the opportunities that are available under the new RDP, while we await departmental approval. As soon as we have the information, we will get back to those people and explain how they can enter the schemes.

235.

Mr Kane: Will there be close communication with farming representatives, such as the Ulster Farmers’ Union and the Northern Ireland Agricultural Producers’ Association — when they get themselves sorted out — to ensure maximum representation from the farming community in the RDP?

236.

Mr McDonald: I will not comment on the NIAPA problems.

237.

Mr Kane: It is a straightforward question.

238.

Mr McDonald: We have had close contact with the UFU. The director general, the president and relevant members of the UFU have met our council at corporate level. We have had a broad discussion about what we hope to do in the new RDP and how we could work closely with the UFU to get farmers involved.

239.

I have also been out on several roadshows, and I have spoken to farmers’ groups. At a recent meeting in the Radisson Roe Park Hotel, we had a discussion about strategy, during which a farmer asked whether two farmers made a community group. That is a practical question. That is what farmers want to know. Therefore, we have been out dealing with practical questions with farmers and farmers’ representatives. We have not had the same level of discussion with NIAPA, although both NIAPA and the UFU are represented on the council. They have some input to the formulation of our policies.

240.

Mr Kane: What is the percentage make-up of your board from each of the two communities? That is an issue that must be addressed for everyone’s benefit.

241.

Mr McDonald: Our council membership stands up to scrutiny. As part of our equality scheme, we had to screen some of our policies for gender balance and for representation of particular minority groups. I am not sure what the religious balance is at council level.

242.

Mr Henry: I do not know the exact numbers. We are satisfied that we have a broad representation from both sides of the community.

243.

Mr Kane: Could that information be supplied to me?

244.

Mr McDonald: Yes [91] .

245.

Mr Bradley: Mr McWhinney referred to a community group being "properly constituted" — that is the term that he used. Can you assist anyone who wants to set up such a group with drawing up a suitable constitution?

246.

Mr McDonald: There has been a key change in the new RDP in order to get the clarity that the Committee and the community are looking for. Previously, we were involved in that process, but other organisations were involved as well. That is where the confusion arose. The responsibility for generic capacity building — a fancy term for helping a community group to sort itself out — lies with the RCN. It will be given a budget to work with groups that are at an early stage and do not know how to form a community group. When that training has been provided, the groups are likely to target our programmes for support to carry out their projects. If we feel that a group has a good project but it does not have management skills or needs more financial or technical training, we would provide a short burst of training to bring them up to steam before they start to implement their project.

247.

Mr Bradley: The submission says that participation from farmers must be collective and integrated. Given the current pressure on farmers, their first priority must be to their farm. Will that fact be acknowledged? Farmers might not reject the programme, they might just have different priorities.

248.

Mr McDonald: Given the present crisis, farmers are less likely to engage in a collective form of activity until they get their own farms in order. There is a responsibility on the agri-food development service and it is currently discussing how it will use the money from the Peace Programme to provide support for farmers.

249.

As stated in the submission, there is no point in misleading farmers by saying that we can sort out their farm problems — we cannot. That is the Department’s responsibility. It is better that we are honest about that from the outset. Hopefully, when the crisis is over the RDC will offer the type of assistance to farmers that it wants to give in the Glens and on the western shores — that is to signpost them in the right direction for support.

250.

Ms Taggart: We are working with a number of farmers’ groups under the Peace programme. Our field staff are working with three farmers’ groups in the north-west. They are surveying their local areas to assess the needs of farms and farm families. Our staff will help them analyse the results of those surveys and assist with action plans on how to address such needs in the future.

251.

As Mr McDonald said, it is not about tackling the problems of the individual farmer. We have already engaged with farmers who want to come together and develop issues collectively, and we will be able to engage with those farmers in the future. However, the foot-and-mouth crisis has affected the work of that group in the north-west because of the Government advice that people should not come together. People need to meet when collective solutions are being sought. However, the work is ongoing.

252.

Mr Douglas: How can socially excluded groups be particularly resource intensive? What percentage of your time is spent with socially excluded groups compared with other groups?

253.

Mr McDonald: From a philosophical standpoint, when you start to engage with rural communities you are looking at the socially excluded sector. Rural communities fall off the edge of the Government’s mainstream table. One hundred percent of our effort goes to rural areas and, by definition, it is mostly targeted at socially excluded groups.

254.

The target set by the Government for the area in which we work is that 75% of the money spent needs to be targeted at socially excluded areas, defined areas of disadvantage, and socially excluded groups. However, there have been concerns about how disadvantage is defined. Under the previous RDP we worked with a number of groups that had already been through an initial sift where possibly some Department said that they did not meet the criteria of social exclusion.

255.

Our statistical service contains a geographical information service. We have surveyed areas and groups and — using a range of indicators — we have helped them to substantiate their cases for support to Government departments or agencies. That has been a useful service and there has been a high level of uptake. Therefore, although our target is socially excluded groups, we have found that some groups are perceived not to be socially excluded. However, when you dig a wee bit deeper and you provide the statistical and technical help, such groups manage to get through the door.

256.

Mr Douglas: A lot of money has been pumped into some areas. Will that be re-evaluated? Is it possible that they might not be in the socially excluded league any longer, providing an opportunity for other areas to be funded?

257.

Mr McDonald: Mike Noble is currently revising the Robson indicators, and the framework for the review is out for consultation. It will be tested to see what areas it defines as being disadvantaged. The data from the 2001 census will then produce a different picture to that given before.

258.

We will look at rural areas using the framework and the census information. We will then be able to advise Government that a particular Department contains groups or sectors that have the potential to be classed as socially excluded. We see it as part of our role to lobby and advise Government to ensure that nobody slips through the net.

259.

Mr Douglas: How do you define social exclusion?

260.

Mr McDonald: There is a range of indicators. Someone always seems to slip through the net no matter what set of indicators is used. There should be flexibility to enable a group to make a case for carrying out a project because it feels that it is socially excluded. If a group of people feel that they are socially excluded, there is no point in telling them that they do not meet the criteria. That is where the problem arises. There has to be the opportunity to engage with groups.

261.

Mr Henry: We currently map all applications for grant aid that we receive — and we did that during Peace I. During the first round of applications for Peace I we realised that areas in south Antrim, mid-Down and north Down had very low application rates. We targeted those areas with information and that increased the rate of applications from those areas. That will be a very important exercise for the next programme period. We will map the applications and if there are gaps we will target those areas in subsequent rounds to ensure that we get an equal range of applications across Northern Ireland.

262.

Mr Douglas: Some of your comments today concern me. You talked about areas that have suffered from foot-and-mouth disease — and it will be difficult for those areas. If you targeted those areas then everybody could apply for assistance. However, another area nearby could be excluded because of such targeting.

263.

Mr McDonald: That is a very valid point. Our initial target area will be all of rural Northern Ireland and that will cover everything outside Belfast and Derry/ Londonderry. Our equality scheme obliges us to treat the nine reference groups and everyone else equally. That will be our starting point. As there is a crisis at the moment, we felt that it was appropriate, in the short term, to provide additional resources to look at those areas. If the crisis is resolved then we can deal with everyone equally. If you go too far on one side, that upsets the balance. However, it is only through continuous monitoring that we can keep the balance right.

264.

Mr Dallat: I congratulate the RDC for work done in the distant past. They encouraged communities to work together to discover what was needed. That was a fine ideal and it was badly needed. Now that there is relative peace we tend to forget that fact, but it is still very important. Today, the emphasis quite rightly is on social exclusion and marginalised groups. Can you assure us that you have the funding mechanism in place to continue the extraordinary work that you carried out in the initial stages in getting a community at war for 30 years to start working together?

265.

Mr McDonald: Thank you for those comments. It is a path that started with a rural action project in the early-to-mid 1980s. This programme started in 1990, and it is not an easy path. We were engaging with rural communities that had had not seen a civil servant from a Government Department in 20 years, and which had no interest in broad rural regeneration. It was an uphill struggle to get communities to take rural development seriously. Thankfully we have crossed that hurdle. It brought a lot of risk and there have been problems, but in the next 10 years we will be able to reap the benefits.

266.

In trying to ensure that we keep community activity and interest going, we have to be innovative in the programmes we bring forward. We have to be flexible, but we have to be able to take risks also. If this were a safe game there would be no need for an organisation such as the RDC because the private sector would do it. There must be a balance between audit considerations and public accountability. We have to ensure that we are responsible for public money and that we use it properly. At the outset we need to have the flexibility to accept that not all of the projects we fund will succeed. There is a failure rate of 30% to 40% for new business start-ups in the first year. That percentage, by definition, should be higher in a community or a collective or in a more marginalised socially excluded group. There will be failures. However, failures are not a problem as long as we learn lessons from them and other people move on to succeed. We have to go through that continuous process of self-evaluation, learning from our successes, and from our mistakes.

267.

Ms Taggart: While there may be failures, the projects are important output and they need to be assessed for their financial sustainability. However, experience has taught us that the process that the groups go through in developing and assessing need, getting funding, and managing the project, has as much learning and skills acquisition as the project itself.

268.

Even if the project is not the panacea for the community’s needs, learning will be involved. We attempt to ensure as far as possible that a group is given the maximum opportunity to make their project a success. Through our developmental support programmes we can ensure that the learning path of implementing the project has its own outputs.

269.

Mr McHugh: Your organisation has done a power of good for rural areas, particularly in promoting what you do. You have promoted your services very well in comparison with other groups. Communication is very important, and that has been part of the problem with funding over the past number of years. There is a question over the current participation of farmers compared with that during the last funding round.

270.

At the beginning of the last round of funding, farming was in quite good shape. There were high prices and farmers were looking at mainstreaming as being the way forward. They did not therefore tend to get involved as easily in things such as rural development or diversification which they considered to be outside their main business.

271.

This time, the difficulty is that farmers do not have their own resources to invest, if they decide to diversify. That matter needs to be addressed and taken into account in your strategy to get people to participate. The ‘Women in Agriculture’ programme in Fermanagh highlighted a lot of people who were never involved in anything like this before. Some of them needed to build their self-confidence, even if it just involved looking for work.

272.

Farm women have been isolated for years, and some of them are very young. That has surprised us. They are probably an audience that you could target in this round of funding, trying to get them involved, not just in Fermanagh, but in other areas also. They are a hidden and isolated group. Will your strategy be able to impact on such groups? How do you intend to reach people outside your scope or that of the women’s network?

273.

Mr McDonald: You have raised some serious ideological issues, which go right to the heart of what rural development is all about. It is about confidence building. Many farmers need confidence when thinking about moving off the farm. It is a big psychological move to make.

274.

Within our current programme, we have started to work on a programme called ‘Farmers Managing Change’. It is about engaging with farmers; getting them to think seriously about the range of skills they have in running their farm business, and whether there is a future for them in farming. It is about getting people to face up to the reality that on the margins they are not going to succeed in farming; they will need to translate their skills into doing something else. That takes a lot of time, effort, and handholding. We piloted that under the first programme and it should be mainstreamed.

275.

The Government must be more proactive, and they must recognise that some farmers will not survive this crisis and will not be saved by the brown envelope or an additional mainstream grant. However, that money could be diverted to enable these farmers to take a step towards a more sustainable business.

276.

One of the measures under the Peace Programme relates to part-time employment. There are many part-time jobs available, but businesses said that their problem was that they could not match job opportunities with the labour supply. They could not get a guarantee that they could get fifty farmers to work at this issue at any particular point in time. Also, farmers did not want to go through the process of recruitment agencies and filling in forms. We worked through the local enterprise agency network to match the job opportunities with the labour supply through better signposting. We introduced a web page listing the opportunities so that farmers and others could see where potential jobs were based.

277.

Mr Mc Hugh: Part of your submission relates to the structural change of farming and the subsequent benefits to the consumer. I am not sure that is the case. I have difficulty with the idea that farmers will have to leave their farms in order to take up other work. The movement away from rural areas will be speeded up if farmers have to leave their farms. They will not be able to do the other part of their work — milking or looking after cattle — if they have to go to the nearest town to start a small business. That is where planning difficulties begin.

278.

Furthermore, the DARD figures are used when determining whether a second person is allowed to remain on the farm and build, for example, a second bungalow. Those figures relate to mainstream farming only, which may be on the wane on a particular farm. How do you intend to address those problems?

279.

Mr McDonald: In rural areas, the type and quality of jobs is as important as the number available. We could tell the Committee that we created 50 jobs through a particular programme. However, if the farmers taking those 50 jobs had to leave their farmland and travel 30 miles to the nearest town to get to work, then they would not be quality jobs.

280.

We must provide jobs in rural areas that suit farmers and their spouses. We must recognise that they have a farm business to run and that they are involved in environmental protection of the landscape. That is why we have intervened within the part-time sector in order to match the labour supply with the jobs. There have to be jobs where farmers need them. In that context, half a job is better to a farmer than one job that he must travel 20 or 30 miles to do. It is the quality, type and location of job that is important.

281.

A programme such as ours could never create a massive amount of jobs. However, we believe that the quality and type of jobs that the programme provides, as well as the additional spin-off of enabling the farmer to stay on the land, is more important than the overall number of jobs created.

282.

Mr Henry: The Government’s policy on rural proofing is absolutely critical. Although we are experiencing economic growth in Northern Ireland, we must ask where that economic growth is taking place and if it is occurring in rural areas. We view our work in rural baselining as contributing greatly to opening up the discussion as to what parts of Northern Ireland are actually gaining from economic growth and how we can maximise the impact of economic growth on our rural areas.

283.

It goes without saying that we need jobs in rural areas. There is no doubt that the future of small farms depends on people receiving off-farm sources of income, but we want that income to be generated as near as possible to the actual farm.

284.

The Deputy Chairperson: Economic appraisal is a very important step in the overall project appraisal procedure. You have stated that your staff has had some initial training on performing economic appraisals. Is that training sufficient to appraise a project adequately? If a project is turned down on the basis of an economic appraisal, is there recourse to an appeal?

285.

Mr McDonald: This morning, the Minister touched on the threshold and the Department of Finance and Personnel guidelines to be followed when an economic appraisal is triggered. Our maximum grant aid — and the bid we have made — is £150,000 from whatever programme we are running and that is likely to be matched by another £150,000 to £200,000. Our maximum project size will be smaller than in our first round of projects. There will not be the same need for large-scale economic appraisals.

286.

Most of our projects are likely to be under £50,000. We will need to ensure that our staff are well trained. First, there is a need for business acumen; to be able to look at a business project and make an economic and investment appraisal. It is the same in the private sector. When you are going to invest money in the countryside, or in any project, you get a gut feeling and a reaction when you look at a set of figures. We are trying to provide training for our staff so that they can read a set of accounts and recognise a reasonably good project. The figures might stack up, but there has to be that inherent judgement.

287.

We are discussing the introduction of a post within the organisation, which will be taken by a person who has not only the business acumen and the accountancy qualifications, but who has also seen real business in operation. Therefore, when the economic appraisal is carried out, someone outside the programmes will be able to take an independent view.

288.

We have begun the initial training, and the Department has offered us the facilities. We are currently carrying out a training needs analysis of all our staff. We have just moved people around within the organisation to make sure that their qualifications are suited to the posts that they are likely to be involved in. That would be supplemented by detailed in-house training, which will include financial training.

289.

All of our projects are unlikely to be on the economic side; there will be environmental and social projects also. Our employees need to be able to understand social inclusion or exclusion, so that they can empower communities, through community relations, peace building outputs and protecting the environment. The economic outputs from an organisation such as ours are around 25% to 30%. The remainder of the outputs will fall into the areas of culture, peace, environment and community relations. We need broad-based staff.

290.

Mr Henry: We have an appeal system for all applications. When we open a round of grant aid, we are two or three times oversubscribed. We find that if the applicants are informed as to why they have not received grant aid, they are usually content with the reasons. However, there is a formal appeals system in place.

291.

The Deputy Chairperson: Is your organisation the only one managing not-for-profit community projects? How much funding is dedicated to this section of the RDP?

292.

Mr McDonald: We believe that we are the only organisation involved in this work. We will be watching carefully how the Department rolls out its programmes because we will want to ensure that there is no duplication of effort. If another organisation is nominated to provide the same type of facility then we believe it will be the wrong step for the RDP to take. It is not that we are the only people capable of doing this work but if we are going to provide the clarity that everyone seems to be calling for then it is better that the service is provided by a single organisation. That is the basis of our bid to the Department and represents the verbal assurances that we have been given to date.

293.

We need to ensure that whatever we do complements what is going on at a local district council level. There is no point in our organisation urging communities to develop projects that will not fit in with a district council’s strategy. We have taken our strategy to the councils and explained the types of measures required to achieve the level of complementarity required.

294.

The figure for the budget was £15 million. There is likely to be £5 million for Peace, although that is still subject to the outcome of the tender, and £10 million for local regeneration. Considering the numbers of projects there will be over six years; that is not a lot of money. In Peace I we had 900 applications and we were capable of funding 150 of them. As regards where we drew the line as far as the quality of the projects was concerned, we could have funded 400 to 500 projects. We could have taken twice as much money.

295.

If you use that example as a parallel — and it is likely to be the same this time — we will be vastly oversubscribed. A budget of £15 million will not meet the demand, but I understand the argument that if more money goes into rural development it has an opportunity cost. There are political decisions that the Government must take about how they want to spend their money. As an organisation, we have the resources and the capacity to deliver that £15 million programme. All we can say is that if more money becomes available over the programme period we have the systems to absorb and deliver it, if that is felt to be appropriate.

296.

The Deputy Chairperson: Are you saying that if more money becomes available, you are capable of handling it?

297.

Mr McDonald: Yes. The other issue about money is that rural development is a very cross-cutting measure. It is not just about agriculture. If we are talking about the sustainability of rural communities it might well be that we have to look to the situation after this round of EU money. What is going to happen then? Will the Government mainstream the support for rural development when the EU money dries up?

298.

The Deputy Chairperson: There is a question mark there.

299.

Mr McDonald: The issue arises and certainly needs to be addressed. We will want to raise the debate within Government. We are now two years into the new RDP. It will soon be mid-programme and we have not yet started the first programme. We will be back against the wall very shortly.

300.

The Deputy Chairperson: Thank you, on behalf of the Committee, for your contribution. If we have any further questions we will write to you, and we hope you will reply.

MINUTES OF EVIDENCE

Friday 8 February 2002

Members present:
Rev Dr Ian Paisley (Chairperson)
Mr Savage (Deputy Chairperson)
Mr Armstrong
Mr Bradley
Mr Douglas
Mr Kane
Mr McHugh
Mr Murphy

Witnesses:
Mr G McWhinney ) Department of Agriculture
and Rural Development
Mr A Morton )

301.

The Chairperson: I must ask the members to declare any interests they might have.

[Mr Bradley and Mr Kane declared an interest].

302.

We will have a further canter round the course on the issue. Perhaps, Mr McWhinney, you could define "rural proofing"? I am only joking; if your boss is unable to give a definition, I can hardly expect you to do so. I apologise that I must leave in about five minutes, but my capable Deputy Chairperson will take over. If I am sore and lash you with cords, he will lash you with scorpions.

303.

The Committee requires an update on the rural development programme, because considerable time has passed since we last discussed it. Members will then ask you a few questions.

304.

Mr McWhinney: Thank you for giving us the opportunity to update the Committee on the rural development programme, for which I have responsibility.

305.

The Chairperson: Will you leave your video with the Committee? May we have further copies? It would be nice if each member could have a copy.

306.

Mr McWhinney: Yes. We can do that.

307.

Much has happened since we first spoke to the Committee last year. However, substantial work must be done before we will have everything in place for the new programme. The programme strategy was published in 2001, which was followed by the formal launch of the programme on 13 November, at which some Committee members were present. As we indicated previously to the Committee, we published a signposting document to help people to understand the programme. In addition, we produced the short video to which you referred, and which illustrates the programme’s value and potential. The video has been well received and widely used. We were going to show it, but we will give members copies of it instead.

308.

At the time of the launch in November, the Minister announced a call for applications as part of the rural development programme. Over 200 applications have been received to date, perhaps 300 in round terms. Most of those are from community organisations, and more than 20 are from applicants with farming interests.

309.

As the Committee is aware, the 12 LEADER+ groups have been selected, and they have been asked to prepare business plans based on their agreed strategies. They will have up to three months to prepare those plans. Thereafter, when the plans are signed off, there should be local calls for projects. We must prepare the detailed LEADER+ programme complement, which will further detail indicative actions. It is being drafted, and it will be formally submitted to the commission after the LEADER+ monitoring committee has approved it. We hope to appoint that committee soon.

310.

The Committee retained an interest in the natural resource rural tourism initiative that the Department is managing through an interdepartmental group under the Peace II programme. The five partnerships to deliver that initiative have been selected, and they are being invited to prepare sustainable tourism strategies for their respective target areas. They will have up to six months to submit their strategies, which we will assess through the interdepartmental group as soon as we receive them. If strategies are received before the six-month deadline, we will ensure that they are taken on board.

311.

The Special European Union Programmes Body is leading the preparation for INTERREG, the cross-border initiative. The operational programme for INTERREG includes a rural measure, which our Department and its Southern counterpart have developed and will deliver. Applications under the Peace II proposals must be lodged by December 2004, and spending can roll out until December 2006. Applications under the building sustainable prosperity, LEADER+ and INTERREG programmes must be made by December 2006, with spending continuing until 2008. That is the timeframe for the current block of rural development work.

312.

The Department recognises that there will be a steep learning curve for new organisations, groups and individuals as people become accustomed to different methods of operation and gaining entrance to the schemes. The Rural Development Council, the network and rural enterprise division staff will give what help they can to guide people through the system.

313.

As we discussed, the programme’s success will depend on the standard, numbers and eligibility of applications made over the coming months and years. I hope that the Committee finds that this summary indicates progress from where we left off and that it is leading us towards the start of the new programme.

314.

The Chairperson: That is a helpful update. Mr McWhinney and Mr Morton will now gladly attempt to answer members’ questions.

315.

Mr McWhinney: Thank you for that recognition.

316.

The Chairperson: They might not respond in the way that you want them to, but they will answer.

317.

Mr McHugh: The programme is obviously important financially. One of the difficulties for people will be to try to sort out which sector they should aim for, especially at the early stage of their first application. The deadline has already passed for certain applications.

318.

What has the Department done — and what will it do — to level the playing field for applicants? You mentioned 200 applications from community organisations and 20 from farmers. I suspect that those with a potential farming interest would be disadvantaged in their attempt to get involved, by comparison with community organisations, which will have had a great deal of recent experience in applying for programmes. You mentioned that the quality of application would determine their acceptance or failure. How can we ensure equality in respect of the standard of applications and people’s technical ability to complete them, given that a part of some applications must be completed using the Internet? We must direct applicants towards the appropriate sectoral areas of the programme rather than their wasting time or getting confused, with the result that they would miss the deadline and would have to wait until the next round.

319.

Mr McWhinney: The Department is aware of the complications. They arose, for the large part, because it is engaged in three or four different programmes that, because of the Brussels links, must be kept in individual silos; that is an unfortunate fact. In this part of the programme the Department tried to ensure that as many doors as possible are left open for farming families against the complicated background of European state-aid restrictions on agricultural activity.

320.

The Department has tried to leave the process of applications to the programmes as flexible as possible. A group, led by the agri-food development service, has been set up to prepare explanatory material. The Department hopes to provide a flow chart, booklet or decision tree to simplify the programmes so that farmers will interpret the system more easily. The Department will try to provide different versions of that information to suit different circumstances — meetings or individual situations, for example.

321.

The complications apply also to the rural development plan, the environmental element of the rural development regulations, whereby guarantee funds are used to encourage farmers to carry out more environmental farming and "greening". I am sure that the Committee knows about that. However, this part of the rural development programme is directed at broader rural communities, including farm families. I recognise that that is complicated, and we are at the start of a long game. However, the Department is trying to open the door to give people an opportunity to come in. The Department will try to facilitate that as much as it can.

322.

Mr McHugh: Will there be hands-on networking with potential applicants? Some very good presentations were made throughout the counties, in agricultural colleges, for example. However, it is likely that only the "usual suspects" attended those events, while many others who need more localised information missed out.

323.

Mr McWhinney: A series of meetings continues and the Department had 17 roadshows. The rural area co-ordinators are meeting individual farming groups on request. The Department has met around 500 farmers in recent weeks. Over 2000 people attended the roadshows. That was a substantial turnout — larger than I expected. Those roadshows resulted in a substantial number of expressions of interest and a large percentage of the applications, which are now on the table.

324.

We will have to address the problem of applying strict criteria to those applications. That is why it will take a long time to get the new groups in, which was the original reason for your question. The Ulster Farmers’ Union has approached the Department to discuss what help can be given in that regard. That is being discussed at the moment.

325.

Mr Douglas: In May 2001 the Department identified the need for 21 additional staff. What is the situation in respect of those posts? Press releases have claimed that large sums are being made available for those living in rural areas — in one case, up to £20 million. There is concern, perhaps from the inside, that the Department is using much of that money to cover its own costs. Is it the case that, despite headline news of such funding, the money does not go to the people on the ground?

326.

Mr McWhinney: For the large part, those 21 staff are in post. To date, the division has 70 staff in post. There was an assessment of requirement and it was met. It takes a long time to identify staff and to get them into post.

327.

Will you clarify your second question about the £20 million?

328.

Mr Douglas: The £20 million was the particular amount involved in one case. I am concerned that much of the money identified for rural development might not be delivered on the ground.

329.

Mr McWhinney: It is possible that the £20 million that you referred to is LEADER+ money. I can assure you that none of the funding that is announced as part of the programme is used to cover departmental running costs — all of it will be used to set up outside projects or partnerships.

330.

Mr Morton: The Department receives one or two per cent of the programme costs to use for technical assistance, including such tasks as programme monitoring and evaluation, which the commission requires.

331.

Mr McWhinney: Generally, the money is used to cover the cost of outside partnerships and organisations.

332.

Mr M Murphy: The Department of Agriculture and Rural Development stated in its earlier submission that it intended to apply a ceiling grant of £50,000 to LEADER+ projects, other groups and partnerships. Is that ceiling still in place? Has consultation on that taken place?

333.

Mr McWhinney: The ceiling of £50,000 will apply to LEADER+ groups. In respect of the natural resource tourism partnership work, the grant ceiling for community-based projects will be £50,000; it will be £150,000 for other projects.

334.

Mr M Murphy: Can you specify the differences?

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