Office of the Comptroller and Auditor General - Press Release VFM examination report on the LEADER programme

Press Release issued on 13 April 1995

VFM examination report on the LEADER programme

The Comptroller and Auditor General, Mr John Purcell, has carried out an examination of the LEADER programme operated by the Department of Agriculture, Food and Forestry. A report of the examination was presented to Dáil ?reann today.

The objectives of the Comptroller and Auditor General’s examination were to assess

  • how efficiently the LEADER programme was administered, and
  • how its effectiveness was evaluated.

This is the Comptroller’s first report under a new value-for-money mandate which empowers him to examine the economy and efficiency of state bodies. He may also examine how those bodies evaluate the effectiveness of their operations.

Summary of findings

The LEADER programme was established in 1991 under the management of the Department of Agriculture, Food and Forestry. It was an innovative scheme under which individual area-based groups drew up business plans for their areas, to be funded from public and private sources.

A total of ?34.7m was provided jointly by the EU and the Irish Exchequer to fund sixteen groups accepted for inclusion in the programme. Groups functioned independently in managing the implementation of their business plans, within guidelines specified by the Department.

The specific objectives of this value for money review were:

  • to examine the efficiency of the administration of the LEADER programme and
  • to examine how the effectiveness of the LEADER programme is evaluated.

Management of the LEADER Programme

The Department of Agriculture, Food and Forestry

The Department succeeded in a relatively short period in establishing a suitable and reasonably efficient system of administration and has been economical in the use of staff and other resources in the management of the LEADER programme.

However, we found that there was inadequate inspection of some groups. Since there is almost total delegation of decision making, regular inspections are essential.

All the funds allocated to groups have been committed but it seems that not all the projects which received funding commitments will have been completed by the 31 December 1994 deadline. However, the Department has assured us that 90 per cent or more of the available public funding will be used by groups.

Many project proposals could have been better analysed by groups before commitments to funding were given. Assessments in some cases were informal and did not involve production of reports.

Some groups appear to have had difficulty in finding suitably qualified persons to inspect projects. In a number of cases, inspection reports were informal and lacking in detail, or were not recorded on file.

Cost overruns occurred on some projects, perhaps due to inadequate analysis at the approval stage.

There were deficiencies in relation to vouching of expenditure on a number of projects.

Overlap with Other Schemes

The LEADER programme provides assistance for activities which may also be subvented under schemes operated by other agencies. These include industrial development agencies, tourism development agencies, FÁS, County Enterprise Boards and Area Based Partnerships. This leads to:

  • risk of duplication of assistance
  • actual administrative overlaps with consequent cost implications.

While some LEADER projects were found to have benefited from public funding from other agencies, there was no evidence in the cases examined that the combined rate of assistance on any project exceeded the maximum limit under the scheme with the most favourable terms.

Overlaps with other schemes, and the administrative difficulties at group level referred to above, raise the question of whether purely technical and administrative aspects of area-based initiatives like LEADER might be administered better on an agency basis by mainline or other area-based organisations, while leaving the key roles of animation, initiation, decision-making and evaluation at local level.

Evaluating the Effectiveness of LEADER

The Department has the responsibility to evaluate the effectiveness of the LEADER programme and to put in place systems, procedures and practices to enable it to do so.

The evaluation sought to measure the economic impact of the programme in terms of:

  • rate of return on the project investment and
  • employment levels.

The rate of return measure could not be calculated because of inadequacies in the project databases assembled by most groups.

Employment creation was used by the evaluator as the main indicator of economic achievement of the LEADER programme. The main conclusions about employment creation drawn by the evaluator were:

Groups claimed that the number of persons employed up to 31 December 1993 attributed to LEADER projects totalled 2,558, of which almost 60 per cent were employed on a part-time or seasonal basis. It was estimated that this was equivalent to 1,445 full-time jobs.

Internal inconsistencies and problems of definition in the job creation figures claimed by groups suggested that a more accurate level of employment attributable to LEADER would be nearer to 800 full-time jobs than the 1,445 claimed.

Broadly equivalent results were achieved in terms of claimed employment by groups spending, on average, 51 per cent of project funding on rural tourism, compared with an average of 20 per cent spent on small enterprise projects.

The evaluator found that there is a risk that project assisted by LEADER groups might proceed anyway without grant aid. This raises the question of whether the aid could be better targeted and of its value as an inducement to entrepreneurs. In a limited survey, nearly 40 per cent of promoters said their projects would have gone ahead without grant assistance.

The evaluator identified a further risk that projects assisted may displace existing viable economic activity, particularly outside the target region.

For further information about the report contents, please contact:

John Buckley

Tel: +353 1 679 3122

Fax: +353 1 679 3288

e-mail: John_Buckley@audgen.irlgov.ie

Publication Details

VFM Report No. 1: The LEADER Programme

ISBN 0-7076-1521-6

Price ?5

Government Publications Sales Office

Sun Alliance House

Molesworth Street

Dublin 2

Tel: +353 1 661 3111

Fax: +353 1 475 2760


The contents of this page were last updated on 26/09/03