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COMMITTEE FOR AGRICULTURE AND RURAL DEVELOPMENT Preparation for the
335. Mr McWhinney: The difference is that under the LEADER+ programme, letters offering sums of up to £50,000 can be issued. That programme deals primarily with individuals and microbusinesses. The natural resource tourism proposals can include minor infrastructure projects for the public good. Examples might include a project to broaden a road, or to build a lay-by or farm car park, based on a tourism need. Those projects quickly absorb a good deal of money. 336. Mr M Murphy: What would be the limit for those projects? 337. Mr McWhinney: The funding limit for such projects would be £150,000. A request for a greater sum of money would be referred back to the Department for its consideration. 338. The Deputy Chairperson: It can be difficult to gain planning permission for such projects in rural areas. Can that problem be alleviated? 339. Mr McWhinney: I appreciate deeply that difficulty, but I must recognise the authority of the Planning Service and the district councils. When local projects are being developed through such a programme, it is to be hoped that planning considerations and potential difficulties would be teased out, discussed and managed early in the process. I hope that those matters can be considered in that context through the partnerships involved, the interdepartmental steering group that examines rural development matters and the new regional and area planning proposals. 340. Mr Armstrong: A future problem will be the question of who should maintain that afterwards. 341. Mr McWhinney: I knew that I should not have given an example. 342. Mr Armstrong: Yesterday I spoke to a departmental member of staff about the same problem. Even if planning permission were granted, would a council take responsibility? You say that there are between 200 and 300 applications, but only 20 are from farmers. How much money is going into the programme? 343. Mr McWhinney: The rural development programme, as launched, comprises £80 million. The Minister announced it as a programme worth £100 million, because we anticipated that it would trigger some £20 million of additional expenditure. The trigger level amounts to only a quarter of the total, because much of the work will be with communities or for the general good. Therefore, the total anticipated input until 2008 is £100 million — £80 million of European and national funds and £20 million of triggered funds. 344. Mr Armstrong: Are no administrative costs included in that? 345. Mr McWhinney: There are no departmental administration costs, other than the 2% technical assistance that Mr Morton mentioned. However, that sum includes the costs of outside partnerships or organisations that will run the schemes. There are always substantial running costs, but the cost of departmental staff is not taken out of the total amount. 346. Mr Armstrong: Will the administrative costs of LEADER+ groups and outside communities be taken out of the total amount? 347. Mr McWhinney: A LEADER+ group can use up to 15% of its grant allocation to cover administration costs. 348. Mr Armstrong: That means that some of it goes to the agricultural or rural community? 349. Mr McWhinney: Yes. The bulk of the money goes to the rural and agricultural community. 350. Mr Armstrong: Can farmers make their own applications? 351. Mr McWhinney: LEADER+ talks about microbusinesses. Farms are classified as microbusinesses, and farmers can apply under LEADER+. 352. Mr Armstrong: The form is complicated. Will individual direction be given to farmers? 353. Mr McWhinney: Local LEADER+ groups are preparing business plans against the strategies that are in place, and agricultural interests are represented on all of them. Once those are signed off, the groups will call for applications. 354. Mr Armstrong: A farmer cannot apply directly? 355. Mr McWhinney: A farmer can make his interest known, but he must apply through a LEADER+ group. 356. Mr Bradley: The Committee noted that the intention is to provide a simple application form to establish eligibility and to have a two-stage application process. The Rural Development Council explained that a complicated application form can be an alienating experience for people and that field staff and others will provide hands-on support to clients. That issue was not fully explored with the Department. Regarding the project application process, what are the Department’s intentions for the parts of the programme to be delivered by Rural Development Division? Also, is there an appeals mechanism whereby projects that were refused at the outset can be looked at a second time? 357. Mr McWhinney: The application form system is complicated and, I accept, potentially off-putting. The Department and any grant-giving agents across the structural funds are linked to a mandatory two-stage process. Part A collects information that is common to all structural fund applications. Part B deals with information specific to the grant and measure. It has been debated for some time. The scale of information sought is considered to be unavoidable and is required by the managing authorities to meet the structural funds’ management and control obligations. Much of the information must be collected at the application stage. The Department provides guidance notes with the application forms. It is Internet-based, but the Department has also arranged for manual forms to be available on request. If someone appeals, there is a review process. The application would be presented to a higher panel for consideration. 358. Mr Bradley: Is the review process a purely desktop exercise, or does it involve going on site? How detailed is it? 359. Mr McWhinney: It is a paper-based process that essentially checks that the panel followed the proper procedures in arriving at its decision. 360. Mr Bradley: Would nobody be prepared to go and see the project? 361. Mr McWhinney: The review panel must consider what it deems necessary to ensure that the decision reached by the original selection panel was "reasonable" — that is the term. If the review panel decides that the decision was not reasonable, it would have to give an indication of its requirements in relation to that case. The panel may require something along the lines that you mentioned. You could not say what the review panel’s view on that would be. 362. Mr Bradley: I am worried that the form appears to be so frightening that the message about what the projects are really about could be missed. 363. Mr McWhinney: I can only repeat what I have said. We understand that some people feel that the form is complicated and potentially off-putting. The Department is doing what it can, including giving advice. If approached, someone in our office will give help and advice to an applicant. 364. The Deputy Chairperson: I want to take that on a step. All applications must go through a LEADER+ group. Individuals cannot apply. Is that correct? 365. Mr McWhinney: We are talking specifically about LEADER+. LEADER+ is one of the measures under the rural development programme. Individuals must apply through a local LEADER+ group. 366. The Deputy Chairperson: Through that LEADER+ group, is the application pointed the way that the old scheme was, or is the application taken on its merits, as presented? 367. Mr McWhinney: It would be too early for me to say. There are 12 local LEADER+ action groups. They will decide on the measures that they will be promoting, and they will adjudicate on the applications. That will be done at local level. 368. The Deputy Chairperson: I sit on another Committee and it said that it wanted applications with substance coming forward for LEADER +. I do not want to see good proposals coming forward and not meeting the criteria or the points system laid down by some of those groups. That is my fear. 369. Mr McWhinney: A panel sitting to adjudicate would want to be clear that it had sufficient information and background knowledge on the project in whatever form it deemed necessary to adjudicate within the rules on that application. It is difficult to comment further. The 12 local groups will do that within the guidance given to them. 370. Mr Kane: The majority of the capital is going towards community partnership projects and very little capital is being directed towards individual farming projects, and the applications relate that. Farmers are becoming increasingly disgruntled by the fact that modulation, which is currently taken from farmers’ premium cheques — and I want you to note that, Mr McWhinney — seems thus far to be delivering nothing back to the industry via rural development. You have commented on the method of providing information to farmers and also the anticipated period for rural development policies to be fully developed. Can you elaborate on what I have said about the modulation taken from farmers’ premium cheques and about nothing going back into the industry via rural development? 371. Mr McWhinney: We have not specified under this part of the rural development programme what is available for farmers or what is available for other groups. Under the applications that are open at present, for example, farmer groups, community groups and other sectoral groups can apply. It is not specific to community groups. The Rural Development Council has some specific community-orientated work. The Department has opened its first call for profit-taking projects. Those projects can include applications from farmer groups, and the Department has already received some. It is not saying which groups can come in. 372. Mr Kane: Do you accept that finance is being taken from the farmer on the one hand and that he is losing out on the other hand? 373. Mr McWhinney: No. I was going to move on to that. This is a very important point. I understand that no modulation money has been put into the rural development programme, nor is there any intention to do that. The modulation money, either already taken off or intended to be taken off, will be transferred to environmental-type farming work and countryside management approaches. That does not come under my direct responsibility. However, my understanding is that that is all being channelled back towards farmers. 374. Mr Kane: I am glad to hear that. That had been worrying me for some time. 375. Mr McWhinney: Mr Morton, do you agree? 376. Mr Morton: Yes. That is my understanding. 377. Mr McWhinney: I see this type of programme as an additional, much smaller-scale opportunity than the larger agriculture budgets. It is a time of change and a time to look at different opportunities. It is going to be a long game. 378. Mr McHugh: There are many who believe that there is not much return for modulation, if the agriculture base fails. Regarding duplication, you gave an example of a park. Some would say that that should be the responsibility of local councils or perhaps the Department for Regional Development. Various statutory outfits mentioned that part of a bridge or some such thing should have been funded through Peace money. Such things should be the responsibility of Roads Service, and that is where we redirected it. Will there be enough scrutiny in the system to ensure that we do not duplicate something that should be done by other statutory bodies? 379. With regard to forward monitoring, the co-ordinators in the various areas are a powerful influence as to how this all rolls forward. As you know, there were difficulties with area-based strategy action groups (ABSAGs) and various other things. Those bad relationships still remain in those areas. There are areas that may not make gains from this programme because of bad experiences the last time. What are you doing to resolve that? 380. Mr McWhinney: We would not be allowed to engage in any duplicate activity. When I raised a purely theoretical example earlier, I used the term "minor infrastructure". We simply could not engage in doing a stretch of normal road. We would not want to; Europe would not allow it. It must be something that would not be prioritised as potential action under a mainstream programme. We are working in areas that are less advantaged. We are doing something that would not otherwise be done. That is the best way of doing it. 381. My feeling about ABSAGs is that there was some excellent work carried out right across the nine areas that were engaged. We hope to draw from that experience, and in accord with the local strategic partnerships, we hope to develop rural strategies as far as possible through those partnerships, rather than duplicate them. So it is hoped that rural aspects of that work will be engineered through the local strategic partnership development. The next six to 12 months will be critical. 382. Mr McHugh: Will there be any special environmental demands placed on those in farming that will not be placed on others who are not in that business? 383. Mr McWhinney: From our perspective, there will be no special environmental demands other than that it is a requirement for us all to ensure that the environmental impact of all that we do is not adverse. Through natural resource tourism, we have as an active partner the Environment and Heritage Service. It is bringing both expertise and money to the table. 384. Mr Armstrong: The Rural Development Council is one of the bodies that is delivering part of your programme. The closing date for some of its projects was supposed to be 1 February this year. Was that extended for a month? 385. Mr McWhinney: That is incorrect, but I will clarify that for you. The Rural Development Council is responsible for non-profit-taking groups, and it closed the first phase of applications on 1 February. Those from farmers’ groups and others in the profit-taking sector who were engaging in this for the first time said that that was insufficient time. Therefore we decided to keep it open-ended and to give four weeks’ notice of closure. I expect to leave it open for another few weeks. 386. Mr Armstrong: What is the Rural Development Council’s total budget? 387. Mr McWhinney: Budgets are annualised, but I expect that over the period of this range of programmes the budget for those projects would be around £9 million out of the £80 million. 388. Mr Bradley: Nearly all my questions have been answered. Are there absolute closing dates for all applications? 389. Mr McWhinney: Two aspects were opened — a Rural Development Council one for the non-profit-taking community-type operation and one for the profit-taking sector, which is the new part of the programme. The latter remains open, and we expect to close it in perhaps four to six weeks. I am guessing, but I want to leave that open. Those who applied by 1 February will be given the opportunity to put some further work into their applications if they feel that they need to. Those applicants are being written to individually. 390. Mr Armstrong: Has that letter been sent? 391. Mr McWhinney: It should be out in the next couple of days. 392. The Deputy Chairperson: Do you cater for applications that come in from those in the agrifood sector, people who want to specialise in niche markets in the rural areas? 393. Mr McWhinney: That may possibly come under my wing where the project is small-scale. There is a fairly big processing and marketing grant scheme, and the minimum level of engagement for that scheme is £70,000. A valid small niche-marketing proposal could come to us, and then it would be considered with other applications, taking account of state aid rules. So the answer is "Yes". It is a complicated answer, but it works on a scale. There is a big scheme for the big players. 394. The Deputy Chairperson: Will you please clarify the ceilings of £50,000 and £150,000? 395. Mr McWhinney: We touched on that earlier. For the LEADER+ programme we are stretching to £50,000. The ceiling for natural resource tourism is usually £50,000, but there may be occasion for that to rise to £150,000 for the public good. 396. The Deputy Chairperson: Thank you. We have some other questions that we would like you to answer, and we will send those to you. 397. Mr McWhinney: I understand that the Minister has a letter that has some of those questions, and we hope to reply to that in the next 10 days. ANNEXES TO THE MINUTES OF EVIDENCE LIST OF PUBLISHED MEMORANDA RURAL DEVELOPMENT PROGRAMME STRATEGY 2001-2006:
Department of Agriculture and Rural Development (DARD) Questions to DARD – 30 March 2001 ANNEX A1 Response to questions from DARD – 3 April 2001 ANNEX A2 Committee response to the Rural Development Programme Strategy 2001-2006 - 6 April 2001 ANNEX A3 DARD’s response – 24 April 2001 ANNEX A4 RURAL DEVELOPMENT PROGRAMME 2001-2006: Department of Agriculture and Rural Development (DARD) Committee letter to DARD seeking submission - 13 March 2001 ANNEX A5 Department of Agriculture and Rural Development – 3 May 2001 ANNEX A6 Additional questions to DARD – 12 June 2001 ANNEX A7 Response to questions from DARD – 27 June 2001 ANNEX A8 Request for update to DARD – 18 January 2002 ANNEX A9 Written update from DARD – 14 February 2002 ANNEX A10 Additional information regarding DARD’s Procedural Manual – 5 March 2002 ANNEX A11 Rural Development Council for Northern Ireland (RDC) Committee letter to RDC seeking submission - 20 March 2001 ANNEX B1 Rural Development Council for Northern Ireland – 3 May 2001 ANNEX B2 Additional questions to RDC – 4 June 2001 ANNEX B3 Response to questions from RDC – 26 June 2001 ANNEX B4 Request for update to RDC – 18 January 2002 ANNEX B5 Written update from RDC – 30 January 2002 ANNEX B6 Rural Community Network (RCN) Committee letter to RCN seeking submission - 20 March 2001 ANNEX C1 Rural Community Network – 4 May 2001 ANNEX C2 Additional questions to RCN – 22 May 2001 ANNEX C3 Response to questions from RCN – 2 July 2001 ANNEX C4 Ulster Farmers’ Union (UFU) Committee letter to UFU seeking submission - 20 March 2001 ANNEX D1 Ulster Farmers’ Union – 10 May 2001 ANNEX D2 Professor Simon Miller Professor Simon Miller – 2 May 2001 ANNEX E East Down Community Network East Down Community Network – 23 April 2001 ANNEX F Mr John A Payne Mr John A Payne – 3 May 2001 ANNEX G Northern Ireland Tourist Board Northern Ireland Tourist Board – 22 May 2001 ANNEX H The Half Bred Horse Breeders Society The Half Bred Horse Breeders Society – 23 May 2001 ANNEX I Northern Ireland Agricultural Producers’ Association (NIAPA) Committee letter to NIAPA seeking submission - 20 March 2001 ANNEX J Annex A1 COMMITTEE for AGRICULTURE AND RURAL DEVELOPMENT QUESTIONS FROM THE COMMITTEE TO: 30 March 2001 Rural Development Programme Strategy 2001-2006 Thank you for your attendance at today’s meeting of the Committee . You will recall that the Chairman stated that the Committee would seek answers to a number of additional questions before it could finalise its response to the Minister. The Committee has resolved to consider your reply at next week’s meeting and I would therefore be grateful if you could provide a response by 2 pm on Tuesday 3 April, in order that I may issue it with members’ papers. As you know, the session was recorded for use in the Committee’s Inquiry and I will forward a draft transcript as soon as it is available. The questions are as follows: Operation of the RDP Strategy The Committee notes the inclusion of appropriate risk management as one of your guiding principles being in place in respect of innovative and experimental projects. However, this is a very complex area requiring specialist skills. Who do you envisage as having responsibility for risk management analysis during the implementation of the Programme? You state that one of the challenges of the Programme is to lever a greater level of private sector investment and this indeed was endorsed in the Northern Ireland Audit Review. It is not clear from the supporting actions presented how precisely this will be achieved. How do you envisage this difficult challenge being met? The Committee understands that, because the Programme will have to react to demand from local communities, the setting of firm targets is difficult. However, most of the actions proposed in the Programme are in the form of activities ‘supporting’ particular objectives. Is there not room in the Programme for at least a small number of measurable targets? For example, the Programme states that it will support a rural base-lining project to be undertaken by the Rural Development Council. Would there not be value in converting this into a measurable target by at least stating a target completion date for such output? The Committee understands that the delivery of the Programme requires the involvement of a range of bodies such as the Rural Development Division, The Rural Development Council, and the Rural Community Network as well as the plethora of community based organisations and private individuals. While some of the activities have been attributed to a particular body, some have not. Would it not be valuable to highlight the lead body responsible for delivery across the range of support activities presented? Links between the RDP Strategy and the EU Structural Funds Can the Department clarify which Structural funds will actually support the Rural Development Programme? For example the RDP states that INTERREG III will be utilised, though this is not discussed in the paper received earlier by the Committee on Structural Funds which detailed rural development activities. How does the Department envisage the setting-up of farm relief and farm management services, (under the NI Programme for Building Sustainable Prosperity) and where is this indicated in the Department’s Rural Development Programme Strategy? The definition of ‘Basic Services’ under the NI Programme for Building Sustainable Prosperity e.g. small-scale electricity/water provision, childcare provision, and under Priority 1 of the Peace II Programme e.g. ICT development and training for rural communities appear to be somewhat different. Both of these, the Committee understands, are the responsibility of DARD. Is there a difference, and if so will there be clarification on what can be defined as a basic service for funding purposes? Are both sets of "Basic Services" part of the Rural development Strategy? Some of the issues referred to under ‘Basic Services’ infer the involvement of other government departments e.g. Regional Development. Will structural funds be diverted to finance initiatives that technically may be the responsibility of other departments? There appears to be considerable overlap in the areas to be funded under the NI Programme for Building Sustainable Prosperity and Priorities 1 and 2 of the Peace II Programme. When applying for financial assistance for an initiative that meets the requirements of both sources of funding, to which fund should an applicant apply? Will there be two different funding application processes for each of these programmes? Will an individual or group be able to make separate applications for funding to each programme for the same initiative/project? Considering the overlap in the areas funded by Peace II and the NI Programme for Building Sustainable Prosperity, is there room for rationalisation of administration of the funding programmes or do they have to be administered separately? DARD has a total allocation of approximately £38m under the Peace II Programme. What proportion of this will be dedicated to cross-border issues e.g. community development, cross-border diversification, fishing and aquaculture co-operation as indicated under Priority 5 of Peace II? How much of this lies within the Rural Development Strategy? Annex A2 COMMITTEE for AGRICULTURE AND RURAL DEVELOPMENT Response to Questions From: 3 April 2001 RURAL DEVELOPMENT PROGRAMME STRATEGY 2001-2006 Thank you for your recent letter. I have set out below the Departments response on the questions raised by the Committee, in the order in which they appear in your letter. Operation of the RDP Strategy The point that we are making in relation to risk management is that the reason Government intervention is necessary to regenerate rural areas is largely because the private sector is unwilling to invest due to the high risks and relatively low returns. If Government is to make a difference, promote social and economic advance and focus on addressing disadvantage, it has to be prepared to take risks that the private sector shuns. We manage the risk by requiring the preparation of an economic appraisal for each project and in appropriate cases a business plan. This process is overseen by the Department’s economists. We will also be drawing on advice from consultants and the Department’s accountants as necessary. We are hoping to stimulate greater private sector involvement in the programme by broadening its scope. For example, under the 1994 to 1999 programme support was provided for local regeneration projects promoted by non-profit taking community organisations. Under the 2001 to 2006 programme support will also be offered for local regeneration projects and programmes promoted by profit-taking collective or co-operative bodies to address the economic, environmental and social needs of their areas. The LEADER + programme will have a specific focus on the micro-business sector and since the maximum rate of grant being offered will be 50% there is considerable opportunity to lever in private sector investment. The LEADER II Programme has already been particularly successful in this regard. The strategy document sets out the Vision and Aim of the overall programme and the Aims of the individual elements of the programme. We have not included targets in the strategy because these have to be agreed with the European Commission and the monitoring committees for the various EU Structural Funds programmes which will co-finance the programme. The Programme Complements are expected to be finalised during May. As regards the rural baselining project which will be undertaken by the Rural Development Council this is intended to provide an on-going evaluation tool. Although the details have not yet been agreed it is likely that it will require a phased introduction over the early years and initially will concentrate on the development of an agreed list of appropriate indicators. It is likely therefore that the first phase will involve a pilot exercise using a limited number of indicators with a report before the end of the year. Overall the programme will be administered by the Rural Development Division of the Department. That said I entirely agree that it will be important to ensure that there is clear "sign-posting" to the lead delivery agents for each element of the programme. The Department has engaged a specialist public relations consultant to assist in the development of a campaign to launch the programme including preparing easily understood documentation to guide project promoters to the appropriate lead body. DARD Rural Area Co-ordinators will also form liaison groups of delivery agents at local level and seek to develop a uniform "one stop shop" response to applicants. Links between the RDP Strategy and the EU Structural Funds The earlier paper provided to the Committee by the Department dealt only with the Programme for Building Sustainable Prosperity and the PEACE II programme. It did not include the community initiatives, of which INTEREG III is one. I attach as an Annex a short paper which summarises the links between the various elements of the RDP and the Structural Funds. This paper is, by necessity, rather complex but I hope it will be of some assistance to the Committee. The Committee has asked a number of questions relating to Measures in the Programme for Building Sustainable Prosperity and PEACE II programme. The EU legal authority for the Rural Development Programme measures under those programmes funded from EAGGF derives from Article 33 of the EU Rural Development Regulation. Article 33 allows for measures relating to farming activities and their conversion and to rural activities. The Article consists of 13 indents which further clarify the kind of support which can be offered. To meet the Commission’s legal requirements, the Rural Development Programme activities under the Programme for Building Sustainable Prosperity and PEACE II programme have had to be transformed into Measures which conform with the Article 33 indents of the Rural Development Regulation. The third indent of Article 33 relates to "setting up of farm relief and farm management services". Such activity can be supported under the Rural Development Programme either under local regeneration projects and programmes (page 31 of the strategy) or sectoral development programmes (page 33 of the strategy). The Department will seek proposals from appropriate organisations for the delivery of such services. "Basic services for the rural economy and population" is the fifth indent of Article 33 and is being used as the legal basis for actions under both the Programme for Building Sustainable Prosperity and PEACE II programme. The activities which can be supported under each programme are different and further clarification will be given in the programme complements. However, as I explained at last Friday’s hearing, the Minister’s aim under the Rural Development programme is to provide as flexible a range of opportunities as possible within the constraints of the EU legislation. Rural Development Programme funds will not be used to substitute for programmes administered by other Government departments. The Programme will contribute to minor infrastructure works only where other departments or agencies are unable to meet the identified need. The Department will provide guidance on the eligibility criteria under the various elements of the Programme. All the organisations involved in delivery of the Rural Development Programme will ensure that applicants are directed to the most appropriate source of funding for their project. The procedures for the implementation of the Rural Development Programme have not yet been fully developed. Whilst there may be some difference in the application process for different part of the Programme to meet specific needs it is hoped that it will be possible to have a largely common approach. Applicants will not be able to apply for funding for a project under both the Programme for Building Sustainable Prosperity and PEACE II programme. The Programme for Building Sustainable Prosperity and PEACE II programme will have to be administered separately. Of the Department’s £38m PEACE II allocation approximately £2.5m will go towards cross-border actions. Around £220,000 of that funding will fall within the scope of the Rural Development Programme. Most of the funding for cross border rural development will come from INTERREG III. In addition some Rural Development Programme actions under the Programme for Building Sustainable Prosperity and LEADER + are also expected to be on a cross border basis, although at this stage it is not possible to provide financial quantification. I hope the Committee will find this additional information helpful in its consideration of the Rural Development Programme strategy. Gerry McWhinney LINKAGES BETWEEN RDP AND STRUCTURAL FUNDS The EU structural funds programmes which will co-finance the Rural Development Programme are set out on page 44 of the strategy. The Department has attempted to develop a broad and flexible programme and therefore has had to draw on a range of structural funds programmes. The links between the RDP strategy and the structural funds are as follows:
(Priority 4 Measure 7)
(Priority 4 Measure 7)
(Priority 4 Measures 7)
Annex A3 COMMITTEE for AGRICULTURE AND RURAL DEVELOPMENT COMMITTEE’S RESPONSE TO: 06 April 2001 RURAL DEVELOPMENT PROGRAMME STRATEGY In your letter of 13 March, with which you enclosed a copy of the draft Rural Development Programme Strategy 2001-2006, you asked for the Committee’s comments on the draft strategy. Thank you for arranging the attendance of officials at the Committee’s meeting on 30 March. Members found the comments made, and answers given, by the officials both interesting and useful in their deliberations. Can you also pass on the Committee’s thanks to Mr McWhinney for his very quick response to the additional questions forwarded by the Committee following the meeting. At the Committee’s meeting on 6 April, members agreed this letter as their formal response to your request. Members also agreed that comments should be noted as "without prejudice" to conclusions they may reach as a result of the current Inquiry into the Department’s preparations for the next phase of the Rural development Programme. The Committee’s response falls under a number of headings. Consultation The Committee was pleased to note that the Department undertook consultation on this strategy over a period since 1997 and that so many responses (100 for the Programme and 44 on the LEADER + consultation) were received. The Committee sees this as confirmation of the importance attached to the Rural Development Strategy by the rural community. Members felt that the positive reaction in Europe to the LEADER + document was to be commended. Flexibility and Expansion of the Programme The Committee was particularly pleased by the officials’ reference to the flexibility inherent in the Programme. In answer to a specific question, Mr McWhinney forecast that the Programme could respond to short-term emergencies because of its flexibility. Members will, of course, be interested to see how this might develop in practice but welcome the stated intention. Members also welcomed the expansion of the programme from previous practice to include a wider variety of eligible applicants and to move away from a focus exclusively on disadvantage. The Committee accepts that disadvantage will remain a priority, indeed the new TSN policies would require such an approach. However, members believe that it is appropriate for non disadvantaged areas and groups to have access to a proportion of the funding. Involvement of Farmers and their Families Members noted the references made to farmers and farming within the Strategy, in Chapters 2 and 3 but felt that more specific reference could have been made in Chapter 4 as the five elements of the programme were outlined. The Committee was, however, reassured by comments made by Mr McWhinney throughout the evidence session. He advised that both individuals and farming collectives would be provided with opportunities through LEADER + and other parts of the programme, with flexibility the key. The Committee believes that farmer participation is crucial, particularly if the programme is to gain maximum credibility and to prove that it is complementary to mainstream agricultural support and that offered by the Accompanying Measures Plan. Members recommend that the Strategy should highlight the desire to include farmers, and the opportunities for inclusion, more clearly than is the case at present. Members also believe that DARD must provide assistance for groups such as farmers, who may be engaging with the programme for the first time, to enable them to compete with ‘veteran’ applicants for limited funds. Rationalisation The Committee, having noted the Department’s commitment to rationalise programme structures, remains concerned that the structures may be complex and difficult to negotiate. Mr McWhinney spoke of bids from consortia to act as LEADER + groups, similar partnerships in each of 5 areas for the Natural Resource Rural tourism initiative and an area based approach which will "be in accord with" the emerging partnerships at Council level which will administer PEACE II funding. At first sight this would appear to be an over-proliferation of partnerships, whose accountability and membership may be called into question. It would also concern the Committee that projects might be eligible for more than one type of funding. For example, Mr Morton advised that farm relief services might come under ‘local regeneration’ or "sectoral programmes’. Similarly, the Capacity Building element of the programme allows for the development of regeneration projects by Community Groups while the Local Regeneration Projects and Programmes Elements appears to allow the same thing. Flexibility is to be commended, but not if confusion might arise as a result. The Committee does, however, note DARD’s intention to prepare easily understood documentation with which to launch the programme and to guide promoters to the correct lead body. The Committee believes, however, that more clarity regarding lead bodies should be incorporated into the Strategy and more fully explained in the subsequent documentation. The Committee has noted the explanation given regarding Article 33 of the EU Rural Development regulation, and how this accounts for the similarities in terminology used in both the PEACE II and Prosperity programmes. The Committee believes that clarity is vital in bringing forward a complex strategy such as that proposed, and recommends that DARD, in bringing its programmes to the public, takes great care to avoid the use of confusing terminology. Co-ordination of Work across Departments The Committee welcomes references to cross-Department co-operation and notes the close involvement of a number of agencies in the management of the Natural Resource Tourism Programme. It is clear to members that the Rural Development Strategy will require significant levels of co-operation and co-ordination between agencies. Members would urge the Department to lead this process energetically and to ensure that the strategy’s customers are neither confused nor disadvantaged because of other agencies’ involvement. One area where the Committee sees co-operation as crucial is in liaison with the Planning Service. Members accept that DARD cannot take over this process but are concerned that laudable and promising economic diversification objectives should not be curtailed by an unfairly stringent response from the planning authorities. Indeed, in its comments on the draft Regional Development Strategy, the Committee made this point. Risk Management, Appraisal and use of Consultants Members have noted the Department’s response to its question on risk management, and the onus on the Department’s economists in managing risk. The Committee accepts that risk will be an inevitable part of any programme with regeneration objectives. However, members believe that DARD must ensure that the appraisal process will in fact recognise and identify risk. It must also ensure that staff charged with managing any risk so identified will be qualified and able to do so. Members have noted the officials’ comments on improved appraisal and will seek evidence of preparation for this as part of the Inquiry. Members welcomed Mr McWhinney’s assurances that the proper procedures would be adhered to in commissioning consultants. This is an area in which the Committee will retain an interest. There are always complaints from constituents about the amounts of money paid to consultants and the Committee would repeat its recommendation on the LEADER+ Programme, that close control should be kept on consultants to avoid abuse by, or over-use of, consultants. Miscellaneous The Committee has noted that individual targets will be agreed within the context of the EU Structural Funds Programmes but believes that targets should be published for the Strategy as a whole. This should be possible once the programme complements are agreed. The Committee welcomes the introduction of an appeals process to this strategy and recommends that this includes an independent element. The Committee appreciates the information provided in an attempt to explain the Strategy’s relationship with, and funding by, the EU Structural Funds. It is indeed a complex picture and members agree that this complexity must not be allowed to become an obstacle to prospective project promoters. While noting the Department’s response on private sector investment, the Committee remains unconvinced that there is enough emphasis in the strategy on securing such investment – rather it is described, in the written reply, as a possible consequence of LEADER + funding levels. While funding levels in other programmes must be attractive enough to engage target customers, they must be set at a level which will ensure maximum leverage of non-public funds. Finally, the Committee notes the Department’s comments regarding staffing requirements and believes that DARD must ensure proper levels of staffing, allocated in a well thought out and effective way, to deliver the Strategy. I trust that you will feel able to take the Committee’s comments on board as you take forward the Strategy. Annex A4 COMMITTEE for AGRICULTURE AND RURAL DEVELOPMENT WRITTEN RESPONSE BY: 24 April 2001 RURAL DEVELOPMENT PROGRAMME STRATEGY Thank-you for your letter dated 6 April providing the Committee’s response to the Rural Development Programme Strategy 2001 to 2006 which I sent you on 13 March 2001. I welcome the constructive and helpful comments the Committee has made. I appreciate that the Committee’s comments are without prejudice to the outcome of the Inquiry into the Rural Development Programme and I will be making a submission to the Committee to assist it in its deliberations. It is my intention to seek the endorsement of the Executive to the 2001 to 2006 Rural Development Programme Strategy as soon as my officials have completed their discussions on the Strategy with the Department of Finance and Personnel, following which the Strategy will be published. In the meantime I would like to respond to some of the points raised in your letter. Involvement of Farmers and their Families It is my earnest wish that farmers and their families will avail of the opportunities which the new programme will offer. My Department is preparing a publicity campaign to launch the new programme and the opportunity will be taken to encourage all groups which were under represented in the 1994 to 1999 Programme to participate fully in the new round. My Department will be considering how farmers, in particular, can be made aware of the opportunities which the programme offers and I hope that the farming unions and your Committee will support us by actively encouraging members of the farming community to become involved and to work up ideas and proposals in preparation for the call for applications. I expect us to reach that stage in the autumn of this year. Rationalisation I note the Committee’s concerns about the over-proliferation of partnerships. Under the 1994 to 1999 Rural Development Programme there were 24 LEADER groups and 9 Area Based Strategy groups. Under the 2001 to 2006 programme I envisage around 10 to 12 LEADER + local action groups and 5 partnerships to deliver National Resource Rural Tourism (NRRT). At this stage we do not envisage creating any new area based strategy groups. It is a specific requirement of the LEADER + programme that it is delivered by means of local action groups. The partnerships which will lead on NRRT will cross district council and county boundaries reflecting the geography of the areas targeted. We will encourage the targeting of Rural Development Programme finance in accord with the strategic Partnerships which are planned for each Council area to deliver part of the PEACE II programme. The Department will be publishing a guide to the programme which will direct prospective applicants to the relevant contact points for advice on the appropriate source of funding for a particular type of project. I hope that this will minimise any potential for confusion. It is also our aim to have all publicity material written in a simple and easily understood style that avoids jargon and confusing terminology. Co-ordination of work across departments The arrangements which are being put in place to manage the NRRT Initiative are an example of our intention to ensure a holistic approach. The overall management of the initiative and policy co-ordination will fall to the inter-departmental Committee on Rural Development which is chaired by the DARD Deputy Secretary with policy responsibility for the Rural Development Programme. A sub-group of the Committee has been established, involving DARD, E&HS, NITB and DCAL, to co-ordinate the implementation of the Initiative at working level. The Department of Agriculture and Rural Development is the lead department for the Initiative and our Rural Area Co-ordination offices will work closely with the Partnership groups on the ground. The Partnership groups will be the main interface with applicants at local level. These arrangements should ensure that the involvement of a number of departments and agencies in this Initiative does not impact adversely on the public. Risk Management, Appraisal and use of Consultants I fully accept that it is important to identify, as far as possible, any risks associated with a project at the outset. All projects, except those involving funding of less than £1000, are subjected to the economic appraisal process in accordance with HMT and DFP guidelines. In the interests of proportionality, the level of detail required for the economic appraisal varies depending on the amount of grant aid being sought. However all economic appraisals for projects seeking grant of £50,000 or more are scrutinised by the Department’s economists who also see a sample of appraisals for lower cost projects. We are intending to adopt a different approach in relation to the use of consultants. Previously the Department provided funding to project promoters to employ consultants to undertake economic appraisals. We feel that a more independent appraisal will be obtained if the funders employ the consultant and we will be adopting this approach for the new programme. This will also allow more direct control over the quality of the appraisals provided by consultants. Training on the appraisal methodology is afforded to all staff in Rural Development Division and the Rural Development Council who are involved in the process. The Department will also make this training available to LEADER local action groups and NRRT partnerships. Miscellaneous I note the Committee’s suggestion that targets for the Strategy should be published when the programme complements have been agreed. It is my intention to publish a short summary of the Strategy together with the overarching targets, later in the year. The details of the appeals procedures which will apply to the various elements of the programme have not yet been settled. The Committee’s recommendation will be taken into account in the deliberations on this matter. The difficulty in attracting private sector funding for projects in rural areas was acknowledged in the Northern Ireland Audit Office report on the rural development programme. Part of the aim of broadening the scope of the programme is to lever in more private finance. I fully accept that levels of grant should be set to maximise the leverage of non-public sector funding which is why grant rates are set flexibly, for example in terms of "up to 50%" under LEADER + and for local regeneration projects promoted by profit taking collectives or co-operatives. This allows the minimum of grant necessary to allow the project to proceed to be awarded. I note the Committee’s comments about staffing and I will return to this matter in my formal submission to the Inquiry. BRÍD RODGERS |