One of the success stories of EU funding has been the LEADER programme. Since its inception in the early 1990s, the programme, in three different incarnations, has made a huge difference to rural communities and the rural economy. Small businesses, tourism ventures and heritage projects have flourished throughout the country, and the programme and LEADER companies that delivered it had a well-earned reputation for pragmatism and delivery.

When the latest version of LEADER was unveiled for the 2007-2013 EU budgetary period, there was much excitement in rural Ireland. Some €465m of combined EU and national funding was committed to the programme and, with a tried and trusted network of local delivery organisations in place, it was presumed the money would flow and the resulting projects would be like beacons of possibility in dark economic times.

Tangle

However, that excitement has turned to frustration and, indeed, desperation as the local development companies charged with disbursement of the funds are snared in a tangle of mindless bureaucracy. As the end of year two of the five-year programme approaches, a mere 18pc of project funding has been spent. This figure was supplied to the Farming Independent by the Department of Community, Rural and Gaeltacht Affairs. Indeed, the department went on to confirm that even when administration and animation funding is included, only 56pc of this year's budget has been spent. Just one company out of a total of 36 has spent more than 70pc of its allocation.

Lest anyone blame Brussels for the bureaucracy, it is generally agreed that the problem lies closer to home, primarily with the Department of Community, Rural and Gaeltacht Affairs.

One project worker employed by a local development company in the south says his day is as regimented as a day in prison.

"It's like the old hit song by the Police [Every Breath you Take], 'every move you make and every step you take, I'll be watching you'. I have to record every phone call, every meeting, every conversation and allocate a budget line to each of them. I spend 50pc of my time recording what I'm doing during the other 50pc.

"The spontaneity and the energy are gone out of the work, all that's left is frustration. We spend lots of energy encouraging people and communities to come forward with ideas and projects and then we kill them with paperwork."

It appears that Minister Eamon Ó Cuiv is oblivious to the role his department is playing in this bureaucratic gridlock. It is reported that he recently berated Fianna Fáil TDs from constituencies where the spending is slowest and warned them that money will be lost if it isn't spent.

Blame

A veteran of the three previous LEADER programmes points a finger of blame at certain control freak managers and boards.

"This new bureaucracy is manna from heaven for boards and managers who want a braces and belt approach to everything. They are afraid of their lives to take an initiative. These are people (who) would like to micro-chip their workers. It is ironic that a programme that is meant to be about initiative and innovation is managed by bean counters."

The process for drawing down funding is retrospective, no money is given up front, everything is based on receipts. As a first step, projects are vetted closely by an inspector with each item of projected expenditure scrutinised for eligibility. Successful grant applicants are not given a cent in funding until all money is spent and accounted for. This means that many projects or individuals have to borrow on the strength of the grant and, with a bank manager breathing down their necks, they have to wait while the local development company goes through every slip of paper with a fine toothcomb.

One particular applicant, on completion of his project, sent in what he thought were completed accounts to be told that paid invoices weren't receipts and so he had to go back to every single supplier and get receipts. He was then told the original quotations didn't match the invoices and was sent back to his suppliers again.

Millions will go unspent.

Maura Walsh, CEO of IRD Duhallow, a company that delivers the Rural Development Programme in north Cork and northeast Kerry, says there is massive frustration among the staff and management of the local development companies and particularly among the communities.

According to Ms Walsh, the problem has its genesis in the Agriculture Commission in Brussels and is compounded by bureaucratic zealots in Dublin.

"The rules and regulation regime that characterised the administration of the Common Agricultural Policy has been inflicted on the Rural Development Programme," she said.

"For instance, the powers that be are pre-occupied with 'market distortion', where rural development funding may give unfair market advantage to projects supported by the programme. As a result, if a community hall group applies to us for a grant to upgrade their hall and if they plan to rent it to other local groups, they can be accused of market distortion in relation to local hotels with similar facilities.

"Likewise, if your local meals-on-wheels committee wants a grant to upgrade their kitchen to comply with HSE regulations, they can come a cropper under the market distortion fixation because they may be perceived as getting unfair advantage over local caterers. It is Big Brother gone mad."

An ongoing row between the Department and local companies about insurance is another example of the bureaucratic lunacy that is rippling the programme. Each company delivering the programme has to have an insurance bond, but the Department won't recognise expenditure on the bond as legitimate spending.

Resources

The Department agrees that the application of CAP bureaucracy to the programme is a problem, but it puts the ball back into the court of the local companies, implying they have the resources and authority to efficiently deliver the programme.

"Over the lifetime of the programme, local action groups (LAGs) will spend up to €85m on administration costs, with a further €34m available for animation costs. This level of support funding should be adequate to meet the administrative requirements associated with the programme. In addition, interim administration funding was paid to the LAGs prior to commencement in order to enable them to prepare for implementation of the programme."

Stuck

Ms Walsh says that, unless something is done fast, millions of euros in rural development funding will go unspent.

"We are two years into this programme and it is stuck; meanwhile we have a very well-oiled delivery machine in the form of a network of companies that has successfully delivered LEADER in this country for almost 20 years.

"It beats me why the powers that be insist on shovelling sand into every moving part."

- Proinsias de Burca

Irish Independent