Jessica Sellick examines the national framework for the LEADER method of delivering Rural Development Programme (RDP) funding.

With the requirements and expectations for the next programming period (2014 to 2020) now being set, will the new round of LEADER funding deliver projects that address local priorities or will people be stifled by regulatory and operational requirements coming down from the EU? Jessica Sellick investigates.

The EU's Common Agricultural Policy (CAP) is a system of agricultural subsidies and programmes. It covers farming, environmental measures and rural development and is the EU's single largest common policy; accounting for more than 40% of the EU budget. There are 2 'pillars': Pillar 1 provides direct payments to farmers and market control measures and Pillar 2 promotes rural development. Under Pillar 2, a minimum of 5% of each member state's rural development programmes are expected to be used to support the LEADER approach.

Launched in 1991, LEADER is an established approach for delivering Rural Development Programme (RDP) funding at a local level. It is underpinned by seven key features which must all come together for LEADER to be successful: (i) area based Local Development Strategies, (ii) bottom-up elaboration and implementation strategies, (iii) local public-private partnerships/Local Action Groups, (iv) integrated/multi-sectoral actions, (v) innovation, (vi) cooperation, and (vii) networking. Over the last 23 years LEADER has evolved under each programme cycle - at the outset (1991-1993) the Programme involved 217 European regions and was limited to disadvantaged rural areas. It has subsequently been expanded to cover all types of rural areas. In its fourth programming period (2007-2013), it encompassed some 2,200 rural territories in 27 Member States; providing funding towards business support, tourism, training and skills, community facilities and agricultural diversification. Taken as a collective, LEADER is viewed as an approach which mobilises local resources in ways that do not happen with traditional 'top down' approaches – with people using LEADER funding to make the best of their assets and development opportunities.

On 11 April 2014, Defra published 'A National Delivery Framework (NDF) for LEADER 2014-2020'. This document sets out the requirements and expectations for the next programming period and includes: (a) information about how to prepare a LEADER application and what the selection process will involve, (b) the roles and responsibilities of those involved with LEADER and (c) relevant regulatory and operational requirements. The NDF also explains the policy priorities and measures that Local Development Strategies (LDS) are expected to meet along with some project examples. A LDS is a document created by a Local Action Group (LAG) and wider partnership that describes what LEADER aims to achieve in a given area. It is the LDS which Defra will assess as part of the competitive application process to receive the next round of LEADER. What does the NDF tell us about how the next LEADER Programme will be implemented? I offer three points.

Firstly, projects funded under the new LEADER Programme (2014-2020) will need to focus on delivering jobs and growth. In terms of overall expenditure, Defra expects 70% of all projects funded under LEADER will directly support the rural economy (e.g. through creating and developing micro and small sized rural businesses). The remaining 30% of projects will also need to demonstrate that they are contributing to improving the rural economy. There are 6 overarching priorities that the new Programme is intended to support, they are: (1) increasing farm productivity, (2) micro and small enterprise and farm diversification, (3) rural tourism, (4) rural services, (5) cultural and heritage activity, and (6) forestry productivity.

Under the previous Programme cycle (between 2007 and January 2013), 3,834 projects were supported across 64 LAG areas. These projects varied from community growing and village furniture reuse schemes to new tourism actions and micro-business support. In many instances LEADER made a real difference to local economies. For example, Cumbria Woodlands received support from Solway, Border & Eden and Cumbria Fells & Dales LAGs and delivered 37.5 full time equivalent jobs, generated £694,270 GVA directly and agglomeration and wider community benefits around woodland management. However, in other LEADER areas LAGs were only able to fund social and community projects (e.g. village renewal schemes, conservation of rural heritage).

For the new Programme, this means LAGs that have already funded rural economy activities will have to think carefully about how to continue to provide support to micro and small enterprises (where are the gaps? How can you build upon learning and good practice from 2007-2013?); and for other LAGs which have not had an economic focus before, how can they deliver outputs and outcomes such as jobs and business support?

With this overall focus on jobs and growth all LAGs will need to consider how their activities align to those of other bodies such as Local Enterprise Partnerships (LEP), Local Authorities, Rural Growth Network Pilot areas, Rural and Farming Networks etc. Indeed, the NDF calls for all LDS's to complement the activities of the relevant LEP/s and for the LEP/s to endorse LEADER applications in the form of a supporting letter. LEADER partnerships are also being encouraged to seek expert advice and support from local Forestry Commission staff and NFU county advisors. Additionally, the NDF expects the contents of LDS's to align with related EU schemes including the European Structural Investment Funds (ESIF) Growth Programme and the Farming & Forestry Productivity Scheme (FFPS).

Will the new Programme provide a basis on which to think again about economic policy in rural areas or will LEADER funding be seen as inconsequential and sidelined by these other bodies and activities?

With the focus now on growth, will the next round of LEADER be responsive? Under the 2007-2013 Programme, in Cumbria LEADER funding supported the 'Flood Debris Recovery Grant Scheme'. The Scheme provided grants to farmers affected by the November 2009 flood event in Cockermouth, enabling them to pay to remove debris from their land so as to bring it back into agricultural production.

More recently, it has been suggested that support could be made available to establish a large-scale storage depot to hold feed, bedding and supplies and handle distribution for farmers affected by the floods in the south of England in 2013/2014; building upon successful initiatives such as Forage Aid.

Secondly, it is expected that the new Programme should cover all of (or more of) rural England – thereby increasing coverage from 52.5% under the 2007-2013 Programme. In practice, this means increasing LEADER population thresholds and/or increasing the number of LAGs. The NDF sets out how prospective LEADER groups should define their geographical coverage –based upon Census Output Areas and having a population of 10,000 to 150,000 inhabitants.

Defining a LEADER area will need to take account of: (i) research being undertaken by the University of Sheffield to identify 'rural hub towns'; these are settlements with a population of over 10,000 which may be eligible for inclusion in a LEADER area. It is likely that these hub towns can be included and referenced in a LDS but their population not counted in the overall population coverage figure for a given area, thus reducing the likelihood of LEADER areas including towns and built up areas for the sake of getting to the 150,000 threshold. Defra will be publishing the findings of this research at the end of April/beginning of May 2014. (ii) To achieve coherent LEADER areas where population density is an issue – and to make administrative savings – Defra is seeking permission from the European Commission to actually increase the upper limit from 150,000 to 200,000 inhabitants. Again, Defra will inform LEADER groups of the Commission's decision as soon as it has been made.

On 17 April Defra released a guide explaining how to use NOMIS to determine the rural-urban classification and population for Output Areas for potential LEADER areas. The step-by-step guide is intended to show how defining your LEADER area can be easily done, without any specific mapping or statistical expertise. For example, using the 'usual resident population' measure in NOMIS allows you to view a map of the area by selecting a local authority district from a drop down list. However, if a potential LEADER area straddles local authority boundaries you need to do this separately for each local authority covered. You then have to click on a map to zoom in and select areas –distinguishing them from lots of areas and finding their code. For some LEADER groups this is further complicated by changing ward and Local Authority boundaries.

While 15% of the funding available will be allocated on a per rural head basis, 85% will be adjusted according to population density, sparsity and productivity using Gross Value Added (GVA) data. It is not clear from the NDF if an area defined as sparse with low GVA will receive a higher funding allocation compared to an area that is less sparse and with greater opportunities for delivering jobs and growth.

If more rural areas are covered under the new Programme and less money overall is available to allocate to each area – and amid looking at lots of squiddles on a map to define a given LEADER area – how can we make sure LEADER groups have adequate financial resources? Prospective LEADER groups are required to define their area and submit a map and Excel sheet to Defra on or before Friday 23 May.

Thirdly, how will the new Programme be administered? Under the 2007-2013 Programme cycle many LAG members, programme staff and project applicants found the administration to be unduly burdensome and complex. Whether the application was a £3,000 community project or £300,000 business project, the same procedures had to be followed regardless of how low/high risk the project actually was. Some applicants struggled to cash flow their projects as LEADER funding is paid in arrears, whilst others experienced difficulties seeking match funding and/or completing the claims paperwork.

The NDF indicates how Defra is considering the use of simplified cost options for small projects. This includes a desire to work with individual LEADER groups to further scope ideas for a small scale grant or 'umbrella project' type proposals. The NDF also explains how each LDS will need to identify an Accountable Body and a LAG and what their respective roles and functions are as well as the role the Rural Payments Agency (RPA) in administering payments, inspecting and auditing accounts. The NDF further contains a 'behavioural code of conduct' which all successful LEADER groups are expected to adhere to.

The European regulation underpinning LEADER allows up to 25% of a LAG's funds to be spent on Management and Administration (M&A) costs. M&A includes project animation and development activity – with the amount of support provided to potential applicants often correlated to the delivery of high quality projects. Yet Defra will not consider LEADER applications asking for more than 18% for M&A; suggesting this cap will enable a greater proportion of LEADER funds to reach projects.

The pressures placed upon LEADER groups under the 2007-2013 Programme to focus upon spend and targets rather than outcomes undoubtedly affected the projects which came forward and received funding. The NDF provides an anticipated financial profile for 2014-2020. Here, expenditure is more evenly spread across the Programme; with Defra recommending LEADER groups identify projects early on so as 'to get off to a good start if your LDS is approved'. Will the next Programme be less about spend and more about funding projects at the appropriate time for them? How does Defra's expenditure profile link to the activities of other bodies such as LEPs?

From focusing on jobs on growth to defining a LEADER area and developing a LDS; the points above open up discussions around what rural development is and what European funding should be used for. We are at a critical juncture for LEADER with the publication of the NDF published and more guidance emerging. Prospective LEADER groups have until 23 May to define their geographic coverage and 5 September to submit a full LDS – watch this space.
A National Delivery Framework for LEADER 2014-2020
Using NOMIS to determine Rural-Urban Classification and Population for Output Areas for potential LEADER areas

Jessica is a researcher/project manager at Rose Regeneration; an economic development business working with communities, Government and business to help them achieve their full potential. She was part of the team that undertook a National Review of LEADER for Defra, has independently evaluated 11 LEADER Programmes (8 in England, 2 in Scotland and 1 in Wales) and was a member of Defra's CAP Stakeholder Reform Group. Jessica is currently supporting 6 existing LEADER partnerships and 2 new groups during Transition. She is also providing Local Authorities with resources to measure their 'Social Return on Investment' and Local Enterprise Partnerships (LEPs) with rural data and evidence. Jessica can be contacted by email [email protected] or telephone 01522 521211. Website: www.roseregeneration.co.uk Twitter: @RoseRegen