Committee Reports > List of Committees > Dáil > 1996 > Committee of Public Accounts > Report No. 01 - Value for money examinations

MIONTUAIRISC NA FIANAISE

MINUTES OF EVIDENCE

AN COISTE UM CHUNTAIS PHOBLÍ

COMMITTEE OF PUBLIC ACCOUNTS

Dé hAoine 26 Bealtaine 1995

Friday 26 May 1995

The Committee met at 2 p.m.

MEMBERS PRESENT

DEPUTY DENIS FOLEY IN THE CHAIR

Mr. John Purcell (Comptroller and Auditor General) called and examined.

Mr. John Thompson (Dept. of Finance representative) in attendance.

REPORT ON VALUE FOR MONEY EXAMINATION - DEPARTMENT OF AGRICULTURE, FOOD AND FORESTRY - LEADER PROGRAMME

Mr. Michael Dowling, Secretary, Dept. of Agriculture, Food & Forestry, called and examined.

Chairman: I welcome Mr. Dowling to the Committee. Perhaps you might introduce your officials.

Mr. Dowling: I am accompanied by Mr. Frank O’Donnell, Mr. John Fox, Mr. Tony Burke and Mr. John Thompson from the Department of Finance.

Chairman: This is the first value for money report carried out by Mr. Purcell and his assistant, Mr. John Buckley. I congratulate them on the LEADER programme which is important to rural Deputies. I ask Mr. Purcell to give his introduction.

Mr. Purcell: As you said, this is the first of my value for money audit reports which examines how the Department administered the LEADER programme and the effectiveness of the system for evaluating its impact. The LEADER programme was devised as a short-term pilot scheme to encourage rural development in the post CAP regime. The scheme terminated on 31 December 1994, by which time just over £80 million had been put into it, of which £34 million public funding came from the EU and the State on a 60:40 basis and £46 million from private sources. The public funding availed of represented 98 per cent of that approved - a high take-up rate - and in overall terms the private expenditure exceeded the original projections of the groups.

The report acknowledges that the Department’s administration was efficient, but states that there is room for improvement, particularly in the areas of inspection and management information systems. At group level, administration costs were well within the 10 per cent limit stipulated in the regulations. However, our examination of administration at group level threw up a number of points, including the use of the flexibility clause to circumvent the specific exclusion of certain types of projects, the involvement of board members as project promoters, cost overruns on a small number of projects, inadequate vouching in some cases and the need to be constantly vigilant in the avoidance of possible overlaps with other area based initiatives.

As regards evaluation, the scheme suffered from a lack of specific performance measures and indicators which made it difficult to establish the extent to which the scheme was having the desired effect. That said, on a general level, there is no doubt that the scheme was successful in getting communities involved in developing opportunities in their own areas and that experience will, undoubtedly, form a good base for future development.

One of the measures of success of the LEADER programme is the number of new jobs created by it but even there, the Department’s own consultant reckoned that the numbers claimed by groups were inflated. An interesting point to emerge was that it was cheaper to create LEADER jobs in small enterprise projects than in rural tourism projects. In this regard, it should be noted that almost 40 per cent of the approved public funding went into rural tourism. Any future evaluation should also review the role of LEADER in sustaining employment and the importance of part-time jobs as a means of keeping people in rural communities.

On the basis of the statements made by the Department at the time of the publication of the report, it seems that the points raised in the report have been taken on board and that it is the intention that LEADER II will operate in a way which will address the problems identified. I am heartened by this positive response as it demonstrates to me that there is a beneficial dividend to be gained from the extension of my remit into the value for money area.

Chairman: Would you, Mr. Dowling, like to comment on the Comptroller’s value for money report?

Mr. Dowling: The report is valuable. However, the work was done before the first LEADER programme was completed, so some points need to be adjusted in any future consideration of it, particularly the number of jobs created which the consultant estimated at a certain time and which we now estimate, on the completion of the pilot exercise, as being considerably higher than the 800 he mentioned. Leaving that aside, because it is an inevitable result of the timing of the consultant’s and Comptroller’s consideration of it, we regard the report as fair and extremely helpful in preparing the ground for LEADER II.

I emphasise the points made by the Comptroller that it was a pilot exercise, not only here but throughout the European Union. It is inevitable that certain things will be learned in a pilot exercise which will be of benefit to its operation in the future. He also said it is based on the concept of bottom-up development, that is, that local communities should be responsible for drawing up business plans for their own areas and that, subject to overall approval for those plans and meeting certain criteria which are either laid down in European Union regulations or national regulations, a lot of the administration and decision making should be left to them.

In drawing up the new rules for LEADER it is important to strike a balance. LEADER is not intended to be operated as if it was a semi-State activity, but as assistance to local communities to try to develop themselves. We must get both elements in the new rules. There must be clear accountability and no conflicts of interest and the criteria must be understood and lived with, as far as possible. However, we must not take away the role of initiative from communities since we are trying to encourage their development.

We regard the report as fair and helpful in enabling us to improve the rules for LEADER II on which we are now embarking.

Chairman: I note that the Department is owed £40,000 for Tipperary Enterprise and is taking proceedings against the group’s bankers. What is the up-to-date position in this case?

The LEADER programme was completed on 31 December 1994 and no claims could be made after that date. What happened to project commitments not paid by that date?

Mr. Dowling: As regards the first question about recovery of the £40,000, that is with the Chief State Solicitor’s Office. As regards the second question, the groups were told that no liabilities were acceptable after 31 December. Everything which was not done at that stage lapses, but it can be taken up again in LEADER II.

Chairman: What was the extent of the commitments at that stage?

Mr. Dowling: I gather it was small, but I am not sure of the exact figures.

Chairman: As regards the £40,000, how long is this matter in the Chief State Solicitor’s Office?

Mr. Dowling: Probably five or six months, Chairman.

Chairman: And no progress report?

Mr. Dowling: Proceedings have been instituted, but it has not gone beyond that.

Deputy Doherty: Has the actual value of the voluntary contribution made in each of the LEADER group areas by those participating in the LEADER boards been established?

Mr. Dowling: Does the Deputy mean the——

Deputy Doherty: I mean the amount of unpaid services supplied.

Mr. Dowling: No.

Deputy Doherty: Has it constituted anything other than just the comment in the auditor’s report in your Department? Is any notional figure associated with or attached to it?

Mr. Dowling: There is no figure placed on it. However, the consultants who reviewed the operation said that in their view it was a very significant contribution, but I gather they did not put any monetary value on it.

Deputy Doherty: What would the cost be of maintaining proper accounts in any of the LEADER programme areas? From where does the funding come? Does it come from the LEADER fund itself?

Mr. Dowling: There is an administration element in the block grant to the groups. It comes from that.

Deputy Doherty: What would be considered a reasonable cost for annual accounting?

Mr. Dowling: The maximum was 10 per cent of the value of what was going to the group. On average, the cost was 7 per cent.

Deputy Doherty: What would that be equivalent to, in approximate money terms?

Mr. Dowling: £4.5 million.

Deputy Doherty: That was divided among—?

Mr. Dowling: That was divided among the 17 groups.

Deputy Doherty: Would that be for accounting practices? I am talking about the maintenance of accounts, their preparation and setting them out for audit.

Mr. Dowling: No, that is for the total administration.

Deputy Doherty: What would be the accounting element?

Mr. Dowling: I do not think that is broken down into individual elements. The groups are allowed spend up to 10 per cent on administration. There is no individual limit.

Deputy Doherty: I would imagine it is quite costly. The LEADER group in the Arigna catchment area did all the accounting on a voluntary basis and no cost was created as far as they were concerned.

Is it proposed to remove the flexibility clause, or has it been removed?

Mr. Dowling: In relation to the last point, all the groups have audited accounts. They are required under law to have audited accounts and therefore the auditing cost is whatever the auditor charges. If some auditing firms decide to do it for nothing, then that is a benefit to the group.

Deputy Doherty: It was done for nothing in the Arigna area. It was a very generous contribution to the whole concept of LEADER. Regarding the other issue, is it proposed to remove the flexibility clause?

Mr. Dowling: As of now, yes.

Deputy Doherty: Is not the basic concept of LEADER the bottom-up theory? Is it not about people at the bottom using skills, imagination and funding from all quarters to develop projects which create economic wealth and employment in their communities? Is it not also reasonable to expect that the right to make decisions, and on occasions to make mistakes, should be tolerated, provided they are not too serious and within the constraints which would normally apply in the development of projects? The elimination of the flexibility clause imposes the superstructure of the Department on what is, in theory anyway, a matter for local autonomy. Is it not a serious intrusion by the Department into LEADER groups’ management, administration, development and processing of projects?

Mr. Dowling: To some extent, this comes to the heart of the dilemma that I mentioned at the outset. There is a risk, in reacting to justifiable criticisms of the way in which either we or the groups operated under the first LEADER, that we may step to the other side of the line and impose controls on the groups which are unreasonable in the context of bottom-up development. The Deputy is correct; it is intended to be bottom-up development.

There was criticism that the flexibility clause was used in a way that allowed in projects which would otherwise not have met the criteria. However, within the existing criteria, there is a fair degree of flexibility for the groups. Nobody is forcing them to do one set of projects rather than another. There is a range of projects they can do within the criteria. We are saying that this time they do not have the flexibility to go outside the criteria, which are broad and which would cover most activities that a local community would wish to engage in. We have no wish to influence projects one way or another so long as they stay within the criteria a group wishes to put into its business plan.

Deputy Doherty: For example, the Bord Failte view on accommodation is central to the decisions that are and must be taken by LEADER in the examination of particular types of projects. In the case of funding for new guesthouses or any accommodation, there will be no flexibility in the future. One project got through in LEADER I on the basis of the flexibility clause providing cover. The Bord Failte policy often does not take account of trends or circumstances which pertain in an individual LEADER group area.

For example, Keadue, County Roscommon won the 1994 Tidy Towns Competition, but there is no approved accommodation in Keadue. Nevertheless, applications for new accommodation have attendant upon them the general policy decision of Bord Fáilte. To my mind, the flexibility clause is a necessary element there. It might not be the case in the Chairman’s region, but it is the case in the Arigna catchment LEADER area. There should be a recognition in the context of flexibility which allows for different types of policy decisions and developments, rather than a blanket position which says “No, that is the policy nationally and there can be no exceptions to it in any particular LEADER group area”. Would Mr. Dowling not agree that flexibility, as illustrated in this case, shows the necessity for the restoration of the clause in a meaningful way?

Mr. Dowling: It is true that the general view - which would also be the view of Bord Fáilte - is that the biggest necessity with regard to developing rural tourism is not accommodation, but the need to develop ancillary facilities. This is not to say that in particular areas, such as Keadue, there is not a need for accommodation. In any event, the criteria laid down by Brussels precluded grant aiding new accommodation under LEADER I.

Deputy Doherty: Who had an input into the Brussels determination of policy in this regard? What contribution was made? To my mind, Brussels is simply reaffirming a crazy Bord Fáilte policy decision which treats one part of the country as fish and another as flesh. This is unacceptable. It is well established by Bord Fáilte that unless one can keep a visitor in an area overnight, the real value in economic terms is not achieved. The basic requirement is that one would have standard accommodation. The situation in Keadue is a reality in surrounding areas of County Roscommon and also in County Leitrim, many parts of Sligo and east Mayo. It is a Bord Fáilte decision in this instance, even if it happens to coincidentally be the thinking of Brussels. It is rather extraordinary but Brussels would not have got much encouragement from Bord Fáilte or from the Department of Agriculture. An exception should be made in circumstances where the exception is the essential ingredient for the development of tourism, initially by providing accommodation. The presumption that people will come to an area and stay in it when there is not accommodation is a fallacy.

Chairman: I am sorry to interrupt the Deputy but I would like to move on.

Deputy Doherty: I would like the answer to that point.

Mr. Dowling: I cannot say who influenced Brussels on this. My understanding is that their approach in regard to new accommodation is linked to the general position of the operational programme for tourism as a whole, rather than simply rural tourism. From that, one assumes that it derives to some extent from the national policy operated by Bord Fáilte.

Deputy Broughan: I welcome the Secretary, Mr. Dowling, and this report from the Comptroller and Auditor General, which is valuable. I have a long background in projects in the urban area of the northside of Dublin which are roughly parallel to the type of work that the LEADER groups have been doing. I welcome the project and this whole development. We have to ensure that there is value for money and that we do get the most efficient possible development. The Comptroller and Auditor General refers to local empowerment. Our experience in the urban area is that the empowerment of local people is a key issue and, where it has taken place, it has perhaps been one of the most valuable by-products of the programmes.

In terms of expenditure in relation to jobs, the Secretary disagrees with the Comptroller and Auditor General on the number of jobs created. If one were to take the Comptroller and Auditor General’s figure of 800 jobs, would it be factual to say that, for an expenditure of £76 million when we have ended up with a net 800 jobs - an expenditure of £95,000 per job created - the figures for the end product are not as encouraging? Even if one were to take it in terms of public money, would it not work out at around £40,000 per job created. The Comptroller and Auditor General refers to the overlap of agencies: we have County Enterprise Boards, IDA and Forbairt. There are a lot of initiatives now but, even given the beneficial effects of local development and local empowerment, is not the expenditure per job far too high?

Mr. Dowling: There are two points to make about that. The creation of jobs is not the only aim of LEADER. It has other aims as well, such as the development of local communities, the raising of awareness of development of local communities, training community workers, etc. It is not as simple as comparing it with the IDA giving a grant for a factory which creates jobs, when one can divide the grant by the number of jobs to get a cost per job. One cannot easily measure in economic terms the other aims of the programme but you can measure the cost of jobs created. The figure of 800 jobs created is a figure which originated in the consultant’s report, which the Comptroller and Auditor General brought into his own report. It is a figure which the consultant viewed, in October 1993, as being the likely full-time equivalent of the jobs created. Quite a significant number of jobs have been created since then. The figure that we believe is more or less accurate for the end of the programme is about 2,000 and, at that, the cost per job works out at about £13,200 in terms of total public money, which does not compare terribly badly with costs per job in the various job creation schemes.

Deputy Broughan: Is that including EU funding under FEOGA or wherever it comes from?

Mr. Dowling: Yes, it is the structural funds plus the national funds - national public funds and not national private funds. It compares reasonably with the level of cost per job of jobs created by the other grant agencies.

Deputy Broughan: Would the Secretary envisage that, under LEADER II and with the improvements which the Department is clearly intending to implement on foot of the Comptroller and Auditor General’s report, the figure would be reduced? It still seems, on the face of it, to be a large figure and if private matching funding is included we are still talking about - giving the Secretary full latitude - £26,000 per job.

Mr. Dowling: That is true but compare it to the cost per job in what the IDA or SFADCo are doing. In all those cases, there are private funds going in as well. The normal comparison is with the cost to the public authority of creating the job rather than the total cost. It is on the high side: I would not deny that. One of the things that the Comptroller and Auditor General pointed out and which we are taking on board is that the projects, in the main, did not have quantified output measurements built in from the beginning so that one could see what the intended result of a project was. That is a requirement in LEADER II for all projects: that there must be measurement criteria laid down in the beginning which would include, among other things, likely levels of job creation. It should lead the groups themselves to be more focused on projects which have the most job creation potential as against other types of projects.

Deputy Broughan: I want to focus briefly on the Department of Agriculture, Food and Forestry. Is it not extraordinary that for this huge structure, covering a large part of our country, only two members of the staff of that Department were engaged full-time to look after the huge expenditure of public money - £34 million of Irish and EU funding? The Secretary said there were only six members of staff. Throughout the Comptroller and Auditor General’s report, he refers again and again to the inadequacy of records, of monitoring and of inspection. Is not the heart of the problem that the Department of Agriculture, Food and Forestry did not take this programme seriously enough? It is intended as a programme, when the Common Agricultural Policy has to change dramatically for Ireland, that we are able to maintain population in rural areas. Did it not deserve far more than two Department of Agriculture officials to look after the project full-time?

Mr. Dowling: It may well have but - I repeat - this was a pilot exercise. We had no way of knowing in the beginning how it would work out as it was a pilot exercise. We had more than two members of staff by the end of the programme: we had, in one way or another, five people working on it, from the level of a Principal Officer downwards - admittedly the Principal Officer was part-time - and we had inspectors working part-time on it as well. For the new programme, we intend to increase the headquarters staff to seven and we have seven full-time inspectors who are at present being specially trained. It is a significant increase in the number of people dealing with it. Again, it is not a scheme that we are administering. What we are doing is encouraging it to start and trying to monitor its operation and evaluate its results. The administration, unlike other schemes that we operate, is a function of the groups themselves and there is quite a significant involvement at group level in administering the scheme. Our job is to encourage, monitor and evaluate. We may not have had enough people the last time - which is a reflection of scarce resources - but we are putting in more people this time and we will be making considerably more use of consultancy services this time around, in terms of evaluation, than we did the last time.

Deputy Broughan: Was the Secretary happy that there were so many projects in the four groups that the Comptroller and Auditor General has studied and are they representative of the other groups? If so, did there have to be as many golf courses and local tourism-type projects?

Before LEADER I went into action, many of us thought that we are talking about some sort of support for small rural industries. We noticed that more jobs seemed to be coming from the enterprise side at a cheaper cost than from the tourism area. Does there have to be as many golf courses and bed and breakfast accommodation type developments? Is this what LEADER was intended for? Was it not intended to give a 12 month support to our rural population?

Mr. Dowling: Only seven golf courses were grant aided by LEADER and this accounted for 1 per cent of its total funding. Obviously, we would prefer to see a greater mix of projects. Rural tourism projects constituted a majority of the projects of the groups. It is true that the assessments conducted seem to show that more new jobs were created in local enterprise type activity than in tourism, but part of LEADER is to do with helping to stabilise local communities. In some cases, rural tourism activity maintained people at work in their homes, on their farms or wherever they worked and that is also an important element. It is not all a question of creating new developments but also of stabilising and maintaining the fabric of what is there in local communities.

The essence of this programme is that it is to be local community development. Local communities can look at the resources available to them in their areas and draw up a plan for that area which they see as the best one they can devise for developing it. The majority of the groups saw rural tourism as an important element. It would be wrong for us to say to the groups that they cannot take rural tourism as such a big part of their plans if the group feels that this is the best option for their area.

Next time, I would certainly prefer to see a wider spread of projects involving somewhat less on the rural tourism side and somewhat more on the small enterprise side. We hope that the formalising of a system where output criteria are worked into the projects at the beginning will concentrate the group’s minds more on trying to get a wider spread when it sees the value that comes from the other type of activity.

Deputy Upton: I welcome Mr. Dowling and his officials. I agree with what has been said on that it is a pilot project. Inevitably, mistakes will be made and lessons will have to be learned. However, having said that, I want to ask Mr. Dowling about the effect of the events that took place with Tipperary Enterprise on the image of the LEADER programme and, leaving aside some of the difficulties there, how that enterprise could be reconciled with the concept of a bottom up development? The people on the board of Tipperary Enterprise seemed to me to be the most famous - a sort of a who’s who - of Tipperary people and I find it hard to understand how the concept of bottom up development is reconcilable with the involvement of people like that in LEADER. They are fine people in their own way, but I wonder if they have the time to get involved in a project of the size of Tipperary Enterprise, given their commitments in their other walks of life.

Mr. Dowling: Tipperary Enterprise was not a shining success, to put it mildly, within the LEADER setup, but that was the group that initially come forward from Tipperary to put forward a business plan. We did not ask any person to be on the LEADER group in Tipperary nor did we try to keep anybody off it. It has been emphasised both by Brussels and the consultants that the groups should first contain people who are prominent leaders within their communities, on the grounds that they are more likely to facilitate development and second, that it should include a reasonable spread of prominent or available businessmen within the area, along with people who are straightforward community volunteer workers. If one is to get that sort of group, then inevitably some of the people of the kind who were on the board of Tipperary Enterprise will come forward.

Tipperary Enterprise was not a success. It was the direct opposite and it was one of the lessons we learned in regard to monitoring etc. One of the reasons why people accepted that closer monitoring was required was because of the collapse of Tipperary Enterprise.

Deputy Upton: I wish to turn to the question of tourism projects. Most tourists who come to this country come to Dublin city initially but only stay there for a relatively short period of time. The amount of money that each tourist spends in Dublin, on a per capita of population basis, is at the bottom of the table for the regions. The LEADER programme is essentially taking tourists out of Dublin city and redirecting them to the countryside, but from a policy point of view, a good case could be made for keeping them in Dublin city for a longer period of time and in encouraging them to experience the pleasures of the wider Dublin area, such as the Dublin mountains, the Grand Canal and so on.

I do not have to say that I represent a Dublin constituency, Chairman. You might have suspected that.

Deputy Doherty: Deputy Upton did as good a job as Bord Fáilte.

Mr. Dowling: I do not represent a constituency but I come from one which is well removed from Dublin but is important in a tourist sense.

I could not disagree with the fact that Dublin is a fine location for tourists, but we were given a programme, like all member states of the European Union, to provide money to local areas to assist rural development in a way that allows them the majority decision in how the money is to be spent and how they want to develop their areas. That is our job. If as a result of some activities within the LEADER group, some tourists are attracted to rural rather than urban areas, that is a result of it but we cannot spend LEADER money in Dublin city to try and assist them to stay there. There are other ways of doing this. Our job was to provide a LEADER programme that assisted rural development and rural tourism is inevitable. While one may disagree with the importance that rural tourism has in the majority of plans, it is undoubtedly a valid development strategy for a lot of rural areas.

Deputy Upton: Does this development bring any extra tourists into the country at all or is it simply shifting the business which is there away from Dublin? How does LEADER fit into our industrial policy and to what extent can it be reconciled with the principles laid down in the Culliton Report and so on?

Mr. Dowling: It fits in by assisting people to make use of the resources available locally to create economic enterprise, either in small enterprises, tourism or whatever. We ask that in the plans under the new LEADER scheme, the new groups will in the beginning have to identify the way in which they will co-operate with the other development agencies, local enterprise boards, area partnerships etc. in their area as a condition of having their plans approved. We require that they will share with the County Enterprise Boards the list of projects which have been proposed for grant aiding so that there would be no duplication between both sides. LEADER is essentially aimed at relatively small developments rather than the substantial ones which are grant aided either by Forbairt or SFADCo. The normal level of grant in the new arrangements will be less than £50,000 and projects over that figure will only be included subject to national approval. Essentially it is a local development initiative which is aimed at smaller community-sized projects, be they industrial, craft, tourist, or alternative farming enterprise developments.

Deputy Upton: In relation to the cost of the jobs, I go back to some extent to what Deputy Broughan said and what Deputy Doherty alluded to when he talked about the unpaid local effort which goes into sustaining LEADER. To what extent can a value be put on that and, more relevantly, to what extent can that be sustained if these people are not going to be paid? Does that not bump up the cost of the jobs even further?

Mr. Dowling: I would not think that there is any risk of it not being sustained. I repeat, that the administrative costs can be met up to an amount not exceeding 10 per cent. The average for LEADER the last time was 7 per cent which is not too bad. In some cases, obviously, there was voluntary work which was not paid for at all. I suspect that it can be sustained in nearly all communities. Once they are organised there are people willing to provide services within the community, at no cost, in a variety of organisations some of which are LEADER. However, there are a variety of other community organisations that people will spend all their lives working in voluntarily. I would not have thought that there is a major difficulty about getting that type of activity continued.

If it is felt that it would be useful or desirable to put a figure on the value of the unpaid administration which is available to LEADER we would not have a difficulty in including that in the terms of reference of the group that is evaluating LEADER II. Indeed, we will be because it is suggested by the Comptroller at one point that we should have a final evaluation of LEADER I and that we would include that in it as well. I do not think there would be a difficulty about getting an estimate of its value if it was thought useful.

Deputy Upton: The monitoring committee consisted of 40 people and I gather that it is scheduled to become bigger for LEADER II. Is that true? A monitoring committee of 40 seems an extraordinarily unwieldy group of people to try and work with? Secondly, to what extent have local conflicts emerged in relation to LEADER? Have some of these projects been characterised by local bickering about their value, how the business was done, and the possibility of alternatives? Has that been a significant phenomenon?

Mr. Dowling: On the first point, I would certainly agree with you that a monitoring committee, or any committee, of 40 people is very unlikely to work efficiently or effectively. For that reason, the monitoring committee the next time round will be much smaller. It will represent the European Commission, the Department and the other relevant Government Departments. In addition to that there will be a consultative committee, but the actual monitoring committee will be significantly smaller than the present one.

As to whether there was bickering locally in regard to the selection of projects, I don’t know to be honest. I suppose it is unlikely that there wasn’t some.

Chairman: Will your Department evaluate the final outcome of the LEADER I initiative?

Mr. Dowling: Yes. We might not necessarily do it ourselves but we will get it done.

Chairman: As a result of your experience of LEADER I and also this report, how will you approach a conflict of interests for LEADER II? This more or less follows what Deputy Upton said.

Mr. Dowling: The Comptroller was correct in saying that there was a possibility of conflicts of interest. It is not clear that this possibility was actualised in many places.

Chairman: Yes, I accept that.

Mr. Dowling: But clearly there was a possibility. However, we did lay down as a rule in 1993 that promoters of projects who were applicants for LEADER grant aid, and who were directors or members of advisory groups or otherwise associated with the group, should declare their interest. The group should take steps to decide on such applications in a manner which avoids any public perception of favouritism. Subsequent to that, in May of last year, we again wrote to them saying that the Comptroller and Auditor General has recommended that where a conflict of interest occurs, that fact, the procedure followed and the action taken is recorded formally. They were asked to do that as well. Obviously we will ensure that those criteria are carried into the next LEADER and in addition ask every board to maintain a register of the interests of all board members. In our view this will make the position clear. This will be one of the factors that will be monitored by the group of inspectors.

I should say that it is impossible to exclude from board membership everybody who might possibly be involved in a project coming up, because that it not workable. It is not the way either private or public companies operate. What has to be clear is that where a project is coming forward with which a board member is associated, that member is in no way involved in evaluating it, gets no papers in relation to it, and has no part whatsoever in the decision. That must be clear in the way in which the boards operate and we will be monitoring that. All board members will be required to declare their interests. It must be transparent in the board minutes or records how the potential conflict of interests was dealt with by the board.

Chairman: Have you given instructions to LEADER II groups to monitor job creation and programme outcomes under LEADER II?

Mr. Dowling: Representatives of all the LEADER groups will be coming together in mid-June when we will go over the arrangements for the new system with them collectively. They are required to put down performance indicators, including job creation, at the start of each project. Under the new guidelines they will be required to monitor the degree to which those indicators are being met as the projects go along.

Chairman: You said at the outset that the flexibility clause was withdrawn, or that its withdrawal more or less relates to the EU programme on tourism. In view of the success of LEADER, do you now think that the flexibility clause should be reintroduced? In view of the new terms of reference, do you intend to introduce the clause with LEADER II?

Mr. Dowling: What I said in the beginning, Chairman, was that the flexibility clause was being dropped. It is dropped for everything, not just in respect of tourist projects. There was, apparently, a fair degree of ambiguity about the original flexibility clause, what it meant and how it was operated. We note the view that its complete abolition may be an overreaction on our part. Certainly we would be willing to look again at whether it is possible to introduce some degree of flexibility while avoiding the shortcomings in the operation of the programmes which the original flexibility clause involved. The decision to remove it was a policy decision at the political level within the Department so I am not free to say that we will definitely change that decision. However, we have noted the views that we should try and introduce some greater degree of flexibility while - I assume everybody agrees - avoiding the confusion which the flexibility clause created in the first LEADER.

Chairman: I mentioned that because I have seen the success of LEADER in south Kerry and also in Duhallow. In both areas they made good use of the flexibility clause. North Kerry comes within the remit of LEADER II and I look forward to seeing a further success story there. It is important that it would have the option of the flexibility clause for that reason.

Deputy Doherty: I was delighted to hear Mr. Dowling say that LEADER has an input to make in the stabilisation that is necessary in many rural areas, particularly in the west of Ireland. It can be argued of course that tourism is not an all year around industry in many parts of the west of Ireland. Nevertheless revenue from it can make a significant contribution to family incomes and supplement existing incomes. From that point of view, if LEADER can be used to develop something that contributes to local and family economies, it is worthwhile.

One of the things that has interested me is the number of feasibility studies that have been grant aided under LEADER. Is it true to say that it is an essential prerequisite that feasibility studies be carried out? What is the average grant assistance for feasibility studies?

Mr. Dowling: It is not a prerequisite that feasibility studies be carried out but many groups carry them out because it gives them a better basis on which to prepare the plan for their area. It is possible to grant aid them. My understanding is that the grant in all cases is small, usually about £1,000 or £1,500. It is not a big element in the expenditure.

Deputy Doherty: I asked that question because I am aware that quite a number of feasibility studies were undertaken by the group with which I am most familiar and many of them were in respect of projects that were similar in nature. I would like to think that there was a better system or method of highlighting difficulties and trouble. While the grant may only be £1,000, the individuals also provide some funding. This type of information should be more readily available to individual applicants and can often be as important as grant aid. The duplicity and the belief amongst individuals that they have to prepare feasibility studies can be cumbersome and wasteful.

Mr. Dowling: That is a fair point. We will certainly look at what advice we could give to the groups to avoid duplication and feasibility studies and so on. Many groups have done it on a more general basis and had studies done to look at the resources available in the area for the benefit of the board. If there is a risk that feasibility studies per se are being unnecessarily duplicated within board areas, we can include something in the criteria to cover that.

Deputy Doherty: Would it be possible in that context for a consultation to take place between the Department and Dr. David Fenton of the Regional College in Athlone who is proposing to set up a department of expertise within the college which will make available information and advice on administration, marketing and production? I think it is fair to say, you can correct me if I am wrong, that there is tendency for people who do not have business experience to believe that the availability of a grant is a legitimate justification for going into business. The grant in some instances is job related and consequently they often end up, not just wasting the grant, but also in debt because management, marketing and production skills are not all available.

There is a necessity, over and above any financial support, to ensure people have the expertise which is readily available in any medium sized industrial development. It is costly and smaller developments are more prone to exposure to risks in the absence of the expertise. These risks can be very serious and grave. Would you agree that expertise should be provided and sought through places like the Regional College in Athlone and that this should be recommended to other counties if they are not providing it?

Mr. Dowling: Yes, that is a reasonable way to proceed. In LEADER II more emphasis is being placed on training. It is being stressed that some of the money may be spent on training so that group members are better prepared for the work. We will continue to emphasise that and draw their attention to the fact that there are institutions and individuals whose expertise can be drawn upon.

Deputy Doherty: Is it possible at this stage to consider low interest rate loans rather than grants or a mixture of low interest rate loans with grants? A subsidy could be paid to commercial banking institutions which would reduce interest rates and make low interest rate loans available to project promoters. One has to be doubtful about the continuation of the grant concept without looking at other options. Low interest rates are an essential ingredient and can be reviewed. There is a more meaningful involvement for the individual and less dependency on the linkage between the creating of the job and the grant. In many instances the additional employment can crucify the project.

Mr. Dowling: The general rules laid down in Brussels for LEADER preclude groups being in a position to advance loans to promoters of projects. However, it is included in the criteria that, as an alternative to grants, groups can give interest subsidies on loans which the project promoters raise themselves. It was not available in LEADER I but it is available in LEADER II for the first time. As an alternative to grants, they may give interest subsidies and that will be included in the guidelines. Whether groups want to work to any significant extent on that basis or not we obviously do not know at this stage.

Deputy Doherty: I am delighted to hear that and it would be interesting if this Committee could have a report on that concept.

How many agencies or organisations have an inspection role? I take it that the Commission can carry out an examination as well as the European Investment Bank, the Department and the Comptroller and Auditor General. How many individuals and organisations can go west on a regular basis to carry out inspections and examinations?

Mr. Dowling: There are quite a number of us.

Deputy Doherty: I just want to take the day off when they are coming down. I do not want to meet them on the road as it is very congested in the absence of all the by-passes.

Mr. Dowling: It is unusual for them all to do it at the same time. Our Internal Audit Unit can and will do it. The Comptroller and Auditor General obviously can do it. The Commission have and will exercise the right to audit some of the groups. The European Court of Auditors can if they wish either audit our operations or the operations of the groups themselves. I think that is it.

Deputy Doherty: It is a fairly heavy demand on a voluntary organisation with a lot of voluntary input. I do not know if it can become more streamlined, if it can be done in a way that puts less concentration of energy into meeting all of these various agencies or groups. The bureaucracy involved can impose a lot of pressure on individual groups and organisations. It should be possible to have a more co-ordinated or better structured examination.

Mr. Dowling: The Comptroller and Auditor General might want to add something to that too. These aren’t really voluntary groups in the sense that the term “voluntary groups” is normally understood. They are local community groups but they have full-time staff in most cases so they should be capable of keeping records that are capable of being audited.

Deputy Doherty: There is no suggestion by me, Mr. Dowling, that they should not.

Mr. Dowling: I wasn’t suggesting that.

Deputy Doherty: I want to make sure they do not find themselves engaged in a process of response rather than getting the jobs done.

Mr. Dowling: I wasn’t suggesting that. There is an accountability function which has to be met. All the people I referred to have rights of audit in any activity for which the European Union provides funds, either wholly or partly. It is unusual, however, that any group or any activity would be visited by all of those people, either together or individually. There tends to be some degree of selection by each of the bodies involved as to what they will audit. It is a fact that all those bodies have rights of audit and will all exercise them to some extent.

Mr. Purcell: Obviously, there is a big danger, as the Deputy says, of having this plethora of auditors from all kinds of levels descending on relatively small groups. I can remember being at a Department of Agriculture, Food and Forestry seminar at one stage when one of the impediments to progress was put up on a slide as being this plethora of auditors. The Accounting Officer mentioned some of them. It is not quite that bad really. Certainly, we would have the audit and inspection programmes of the Internal Audit Unit in the Department of Agriculture, Food and Forestry and we would make sure not to create an overlap. If they had visited a particular project or organisation, and we were happy with the quality of the internal audit being carried out, we would not duplicate that and would take their work into account. The European Court of Auditors notify us of their intentions and every year we exchange audit programmes on what we plan to do. Again, we try to make sure there isn’t any overlap. From time to time, we would carry out a joint audit. This is rare but it will become more prevalent in the future - rather than us both visiting somewhere separately - because there is a shared interest. Of course, we serve different masters and that can create a difficulty.

Deputy Doherty: Are many people from the private sector on the monitoring committee or intend to be on it or are the majority of members public servants?

Mr. Dowling: Last time around, all the LEADER groups had somebody from the private sector, plus the social partners etc.. On the new monitoring committee, it is intended that the European Commission, Department of Agriculture, Food and Forestry and the other Government agencies be involved.

Deputy Doherty: Will there not be any private sector people, people who know business and who have lived by it rather than the academic relationships one finds in the public service with regard to business?

Mr. Dowling: We also envisage having a consultative committee that will give advice as to how LEADER should be operated etc. and that will include business people, representatives of the groups, etc..

Deputy Doherty: Chairman, I suggest the Committee considers inviting representatives from the LEADER groups to gives us their views. We have had the official side and the Comptroller and Auditor General’s report which is good but if they want to take up the offer, we should invite them.

Deputy Broughan: In addition to the rural LEADER programme, Mr. Purcell, is it the case that the urban partnerships will also be subjected to this type of examination so that everyone will know where they stand in that area? In relation to this report - and the matters raised by my colleague, Deputy Upton - has the European Court of Auditors made any reference to it? Have they taken note of it yet or have they had any complaint yet about the disbursement of the £21 million of EU funding for LEADER 1?

Mr. Purcell: It is open to us to carry out a value for money examination in respect of any area of public expenditure. It would be open to us to carry out such an examination of the area-based partnerships, of course, and we may well do so. I intend bringing a programme of our intended value for money audits for the coming year before the Committee within the next month. Under the 1993 Act, it is open to the Committee to make suggestions to me. I am always willing to listen to the reasonable requests of the Committee and will try to accommodate them in so far as I can with the resources I have at my disposal.

I am aware that the European Court of Auditors has taken note of the report. I am not sure that they have taken any positive or negative action as a result of that yet but they do tend to respond to matters which are brought to light in public reports in Ireland. They take them into account and I have no doubt they will in this particular case, although I do not know what specific action they would want to take.

Deputy Broughan: Mr. Dowling mentioned the number of full-time staff involved in one project. How many full-time administrative staff are there in relation to the whole 17 groups?

Mr. Dowling: The figure I gave was for the number we had on the administrative side in the Department rather than in the groups. There are over 70, I think, in all the groups.

Deputy Broughan: Are they included in the 800 figure?

Mr. Dowling: No.

Deputy Broughan: They are additional but these jobs arise directly from the local administration of the programme.

In relation to project cost overruns in the Comptroller and Auditor General’s report on the LEADER Programme, page 19, paragraph 2.60, there was a provision in one programme for a grant of £69,000. It ended up as a grant of £173,000 so there was a massive overrun there of more than 100 per cent. In another case, the original commitment was to pay £60,000. This later rose to £71,000 and they got a further £16,000 from another public agency. Does Mr. Dowling approve of that type of thing? From my experience on the urban side, it seems an amazing state of affairs that a single project would have got such an enormous amount of money and that it could have been so dramatically increased. What does Mr. Dowling intend to do in LEADER II to combat that kind of thing?

I notice on the subject of the return on investment in the same report, page 29, paragraph 3.22, that the rate of return for LEADER projects “… could not be calculated because of the inadequacies of the project databases…”. Is it not an amazing admission that in relation to measurement and evaluation, which we are trying to complete today, the rate of return in investment terms could not be evaluated.

First, how can we control costs to prevent them spiralling out of control and, second, how can we measure the level of investment?

Mr. Dowling: First, I agree with the Deputy on the issue of cost. It is not reasonable that a project should end up costing two and a half times what was initially envisaged. The new guidelines will specifically require the groups to make it clear to project promoters that, if costs prove higher than anticipated, increases in grants cannot be expected.

With regard to the question of projects having been funded from more than one source, the C&AG’s report did not find evidence of multiple funding of the same elements of projects. A number of projects under LEADER also benefited from public funding from other agencies but there was no evidence that the combined aid exceeded the limits set for individual projects.

There is a difficulty about having a common measure, as you suggested, for judging or evaluating the projects. It is certainly essential to have measures to evaluate each project, but one of the objectives of LEADER, as defined by the European Union, is to find innovative solutions which will serve as models for all rural areas and ensure maximum integration between sectoral measures. If one of the aims is innovation, one cannot necessarily at the same time have exactly the same measurements. However, it is desirable——

Deputy Broughan: With all due respect, we could have other criteria in relation to the rates of return. For example, we could have spent this money on increasing the size of the Army or the Garda Síochána and base some of them in those areas. It is conceivable that, by measuring it along those lines, direct investment by the State, or whatever, in job creation could have been more valuable to the local communities in terms of the multiplier effect and so on than this way of doing things. We are trying to evaluate whether this is the best way of stabilising and increasing rural populations.

All throughout this report, the C&AG keeps going back to records. For example, one project got £56,000 of public money and did not submit any invoices. From my experience with the urban groups with which I have been involved, FÁS, for example, does not give any money until all the documents have been submitted. How do you explain this particular group getting a huge amount of money without a single invoice? Are the bad records and lack of a database of any kind not a huge drawback, and what are you going to do about it in LEADER II?

Mr. Dowling: First, on the specific question, it is not acceptable that an advance would be paid out without invoices. It is included in the legal agreement between the LEADER groups and ourselves and the European Commission that grants cannot be paid out in that way. That is one of the areas which will be monitored in the future. I agree that there is a need to have some measurement of the return and we will include that in the evaluation which is to be done for a second LEADER programme.

However, to take the more general point, we do not have liberty to spend the money this way rather than some other way. LEADER is one of a number of Community Initiatives where the European Commission has held back funds from the general Structural Funds to be spent in ways which they want on Community Initiatives throughout the whole European Union. One of those community initiatives is bottom up rural development programmes through LEADER, the idea of which is highly regarded internationally by agencies from the OECD downwards.

In any event, it is a Community Initiative which we apply in Ireland and we get a reasonable share of what is available. If we did not apply it, what is available would not be available for other projects in Ireland. We think that it has a valuable role to play in the development of local communities. The evidence of the past shows that it has a reasonably valuable role. We hope that the improvements, both in regard to monitoring and to criteria for the new LEADER, particularly the introduction of specific targets which should be set up as measurements when projects are being evaluated in the first instance, will mean that the second LEADER will play an even bigger role.

Deputy Broughan: Is it not a striking admission on page 31 that when entrepreneurs or project developers were asked if their project would have been undertaken without LEADER assistance, 40 per cent of respondents answered that they would have gone ahead with the project even if there had been no LEADER? Does that indicate that we spent public money on projects which, effectively, did not require or need it? Perhaps, some of those tourist initiatives, to which we referred earlier, would have gone ahead anyway without that kind of expenditure.

Linked to that, in relation to small enterprises, another key figure of the C&AG’s report is that 51 per cent of the money went to rural tourism and only 20 per cent to small enterprise, yet rural tourism produced 34 per cent of the jobs while the small enterprises produced 32 per cent of the jobs. In other words, small enterprises got less than half the amount which rural tourism did and yet they created nearly the same amount of jobs. I know you said that some of the enterprise jobs are subject to the displacement effect, which we are all aware of in relation to these types of projects. However, is it not striking that maybe we should have gone for more small rural industry or service projects rather than just tourism?

Mr. Dowling: It is true that a number of people said that their projects would have gone ahead anyway. However, it is not clear if they would have gone ahead at the same scale or at the same time. It is also true that the small enterprises appear to be more job creating than rural tourism. I repeat that one element of the money is designed to ensure stability and the maintenance of activity, not necessarily new activity in all cases.

However, either we follow the philosophy of LEADER or we do not, and if the philosophy is that we allow a local community to assess what it thinks is best for development of its own area, then we have to allow it to do so, as long as the projects chosen meet the criteria. It is the opposite of bottom-up philosophy to say that you must spend the money on particular projects or principally on particular projects. In a number of areas, the kind of project you are trying to dictate might not be there. It is an element in the programme that the local community has, within the overall limits of the criteria laid down, the right to decide what is best for itself. I think that we would be accused of unnecessary interference if we said that 70 per cent of the projects must be in one area rather than in another. An element of choice in the development of their own areas is required, under the philosophy and the rules of LEADER, to be left to the communities themselves.

Deputy Broughan: The question of overlap comes through the report very strongly, and a few of us have referred to it already. It was one of the basic themes of a former member of this Committee, Deputy Rabbitte, who was often fairly critical of the extent to which there could be a major overlap of grants. The chairperson referred to north Kerry, which has at least one partnership. First, we had the national agencies and the Government structure. Now, we have local government with county development teams, county enterprise boards, city enterprise boards, LEADER and we will shortly have an urban LEADER programme in city areas. We also have partnership areas. Are we getting to the stage where we need to step back and look at all the money that is available from Europe or that we are channelling into local empowerment and say it should be more focused and that we should be looking at a more closely identified structure, perhaps through the Local Authorities, so that we have a direct element of local democracy? I have heard different views on this. Some of my constituents have said to me that it would be better for small entrepreneurs to be able to go to a number of agencies. One can go to different local groups and national agencies. Could a future Government not take this whole movement by the scruff of the neck and try to focus it in a much clearer and, perhaps, more cost effective way? We have tier after tier of local administrators and not enough jobs and output.

Mr. Dowling: I will repeat one of the points I made in answer to your last question. LEADER is a concept which is to be applied throughout the EU. We must also apply it here and must live within the type of concept which is acceptable throughout the EU. That type is bottom-up local development with local communities taking the responsibility, within the criteria laid down, for the development plans for their own areas. It is not easy to fit this into the other structures which are there. LEADER is not only about giving grants. Part of it is about animating local communities and part of it is about capacity building within local communities. This is equally as important as the giving of grants to particular types of projects.

We are conscious of the fact that there are a number of other agencies working in the same area. We are providing that LEADER projects will not be able to benefit from multiple funding. In particular we are insisting that the LEADER groups and the County Enterprise Boards exchange details of projects each is evaluating at any one time before those projects are grant aided to ensure that neither body is duplicating the activity of the other.

Deputy Upton: Sometimes what strikes me about these type of projects is that in many ways we seem to be muddle-headed in relation to what the objectives are. You read from a statement of the EU that one of the purposes of these projects was to provide innovative solutions to rural development. If that is the central objective, a whole series of things falls into place behind it. How many innovative solutions have been provided? This seems to be a sort of social research and development for rural communities. The attitudes contained in some of these reports and the whole approach at this end seems to be exceptionally bureaucratic. One of the things, above everything else, which characterises innovation is failure. There is a huge level of failure compared to the successes which come out of it. I am not sure that the attitude and mentality we have adopted is at all reconcilable with that.

If I was looking at this from the centre of Europe, it would seem curious to me that Ireland would be selected as the centre where one would look for innovative solutions. An ESRI Report referred to the deficit of innovation in this country. This report, which is a long tome of 300 pages, points out very clearly the inadequacies of innovation. I would have thought from a European point of view that it is very difficult to understand why this country should be used as the centre in which to develop innovative solutions.

Mr. Dowling: One of the objects is to provide an innovative approach to local development. In a European context the concept of working through local groups on a bottom-up basis is in itself an innovation and is certainly an innovation here. The groups are requested to ensure their business plans respect the innovation requirement, that they have included in them measures to help animate their local areas and which relate to capacity building.

Ireland was not chosen as a pilot area for this activity. It is an EU initiative which applies throughout the whole Union. The first LEADER was a pilot programme in all member States and the same thinking in terms of bottom up development was to have applied in all of them. It is not that we were singled out. The European Commission decided it wanted this type of rural development initiative to be taken as a new innovative measure in every member State. It regarded LEADER I as reasonably successful. It probably regarded it as even more successful in Ireland than in other places. They regarded it as sufficiently successful to have continued it into the new round of Structural Funds to cover the next five years. It is not a question of us being picked for innovation. The programme is seen by the EU as an innovative one which should be applied in all member States.

Deputy Upton: The measures of development output in relation to LEADER II are listed here. They are: public meetings held, press releases issued, media interviews given, workshops/courses held and numbers of persons trained. I find some of these indices of development output to be curious and, in many ways, utterly meaningless. How could public meetings be an index of output?

Mr. Purcell: My Office, rather than the Department, is responsible for suggesting these types of indices in LEADER II. In the report there was a fair amount of emphasis on the only outputs which were available. These were job creation numbers. In an attempt to give a balance in recognising there was more to the LEADER pilot project than creating jobs, we tried to give some indication of the kind of activity which would reflect local community activity. I am aware from my personal contacts with people in rural areas that the project was successful at ground level in achieving the involvement of people who were isolated in rural communities. The number of people who would come to public meetings is some indication of the level of involvement. I am not saying these are the absolute output indicators which we should have but these are the kind of things one might like to take on board to try to measure in some way the developmental side of the programme rather than getting down to the nuts and bolts of jobs because, as the Accounting Officer said, it does have that dimension.

Deputy Upton: If I were involved in a LEADER group and in beefing up development output as measured by these indicators, I would not have any need to be doing much with the programme. With regard to public meetings, if one gets a good row going and keeps it going, one can pack them in. However, as soon as the row begins to tail off the interest falls off. In terms of press releases issued we would all take a shot at that: I am sure we have a bit of experience there—

Deputy Broughan: The Mitchell brothers.

Deputy Upton: If one is getting involved in media interviews and so on one has to stir it up. The danger is that one can stimulate conflict among local groups. There exists a good residue of potential for conflict.

Mr. Dowling: There are a range of output measures and impact measures which will be included in the next LEADER. They include elements such as jobs, the number of training courses, the number of people trained. They will also include the degree to which the LEADER group tries to develop an awareness in the community of what it was trying to do and what the community might be able to do.

Some of the points here are ones which could be included. There is a whole range of output and impact measures which will be included under different subprogrammes - whether it is acquisition of skills, rural innovation programmes, training, rural tourism or small firms. They will include most of what the members have asked for today. That will shortly be published and we will send it to the Committee so it can have a look at the sort of indicators of progress we are putting in and which must be designated at the start and evaluated throughout the new LEADER programme during its operation and at its end. If anybody has any ideas on other measures which we should put in we will be glad to hear them.

Deputy Upton: I tend to agree with the points made by Deputy Doherty in relation to inviting LEADER groups to meet us - not necessarily the LEADER groups but some of the users.

Deputy Broughan: I know the Comptroller and Auditor General only gave these as an indication of evaluations of measures. Measuring community development is incredibly difficult: it involves political and other issues. In some urban areas people are not even aware they are in a partnership area. Would it be useful to carry out sampling and ask people how aware they are of the LEADER development? If a developmental approach is being adopted the first measurement would be people’s awareness. It is striking that many people are not aware that projects are going on in their own parishes.

I have been involved with local socio-economic development and I came into politics via that route. I would be supportive of the bottom-up, local empowerment approach. The Committee must evaluate it as strictly as possible to ensure the taxpayer gets good value for money. I would support the general approach and I hope the Kearney Report will be implemented. If we are still on this Committee when it comes to evaluate LEADER II we may perhaps notice significant differences.

Mr. Dowling: We think it is more anecdotal than proven that there is a fair degree of awareness of the LEADER activity in the different areas, but we will look at the question of whether we could establish that more formally. We will send to the Committee next week the part of the operational programme which relates to impact and output measures so that the Committee can have a look at it.

With regard to the point made about meeting the LEADER groups, there is an Irish LEADER Network which represents all of the groups and if the Committee wanted to get a flavour of them all rather than having to meet them all, meeting the network could provide that flavour.

Chairman: The success of area based programmes like LEADER is vital for rural communities. This makes it all the more important that they be administered efficiently and lessons be learned at an early stage. I welcome Mr. Dowling’s response of the steps the Department has announced to improve administration and devote some more resources to the programme so that it can serve the needs of the rural community even better.

I wish to compliment the Comptroller and Auditor General and his staff on the report on his value for money examination, and Mr. Dowling for his excellent contribution today. I also wish to compliment my colleagues Deputy Upton, Deputy Broughan and Deputy Doherty for their attendance.

Overall, I believe it was a good exercise and no doubt the overall discussion will benefit the LEADER II programme. Deputy Doherty and Deputy Upton have made a suggestion that an invitation to come before the Committee be extended to the LEADER representatives which we will discuss at a future meeting.

The witness withdrew.

THE COMMITTEE ADJOURNED.