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DRAFT RURAL DEVELOPMENT REGULATION
ANALYSIS OF RESPONSES TO CONSULTATION

CHAPTER 7 - RESPONSES TO LEADER APPROACH (articles 60-66)

LEADER+ is currently financed by EU Structural Funds and is designed to help rural representatives and stakeholders consider the long-term potential of their local region. Encouraging the implementation of high-quality and original strategies for sustainable development, it encourages a bottom-up, territorial and integrated approach to pursue local development in rural areas.

The Commission proposed a significantly strengthened role for LEADER within rural development programmes for the next financial perspective, and proposed that each programme should contain a LEADER axis (the funding of which covers the main 3 axes) to finance:

• the implementation of the local development strategies of local action groups built on the three rural development axes;

• the operating costs of local action groups;

• the co-operation projects between local action groups;

• experimental and pilot approaches; and

• capacity building necessary for the preparation of local development strategies.

The proposal retained all of the features of the current EU LEADER+ programme. It would also allow local action groups to fund the types of activity eligible under the current LEADER+ Programme, though support for rural businesses would be limited to micro businesses (less than 10 employees and turnover less than €2m per year).

The draft regulation required at least 7% of Community support per programme would need to be spent on this 'axis' (this is a confusing terminology, as it implies that LEADER is a separate support mechanism, which may not be the case), as the proposal stands, and 3% of overall EU funding (excluding modulation) will be kept in reserve to the allocated in 2012 and 2013 to the Member States with the best-performing LEADER axes. The criteria for the allocation of this amount is yet to be decided. The measures proposed were;

• Should LEADER form a separate (4 ^th) axis or be integrated within the 3 main axes?

• Should LEADER be limited to one or more of the proposed axes?

There was a fairly even split here with 10 responses in favour of a separate axis, and 9 against. Interestingly local authorities were largely in favour of the proposal. The arguments for having a separate axis were based on the premise that it would ensure funding is ring fenced and could not be hived off (Argyll and Bute Council) and that simply mainstreaming would effectively mean the disappearance of the LEADER framework (COSLA). The strongest argument in favour probably came from Midlothian Council, who saw clear advantages, "Axis 111 could then concentrate on diversification on and off farm with the 4 ^th axis concentrating on Quality of Life issues." This view was echoed by Tyne and Esk Local Action Group and Scottish Borders LAG.

The Council for Scottish Archaeology typified arguments against, saying that if LEADER is being used to implement local rural development strategies it should form an element in all axes. A similar view was expressed by Scottish Estates Business Group, that integration of LEADER axes within each programme should encourage and support wider uptake.

There was general agreement that if LEADER did not form a separate axis, it would fit best with Axis 111. (Ros Halley, responding as an individual, but manager of Dumfries and Galloway LAG felt that even as a discrete axis it could be used as a cross-cutting strand, with involvement in all 3 axes) There was also a view, shared by Scottish Natural Heritage, Argyll and Bute Council, Scottish Borders Council, South of Scotland Alliance and East Lothian Council among others, that added value could also be given to Axes 1 and 11. South of Scotland Alliance suggested that FBDS might be able to include more innovative actions using the LEADER LAG management mould.

• Is the restriction of support to micro-businesses (rather than e.g. small businesses too) appropriate?

The views expressed here were evenly divided, with 8 responses for and 8 against. Midlothian and East Lothian Councils took a more pragmatic approach, Midlothian arguing that support should be available to micro and small businesses, but with emphasis being directed at micro, and East Lothian taking the view that micro businesses should be prioritised, but in certain circumstances aid should be given to SMEs. Other responses were took a firmer line. Arguments in favour largely centred on the premise that there were plenty other measures through EU Regional Policy which focussed on small businesses. This was the view shared by COSLA, Aberdeenshire Council and Argyll and Bute Council. British Horse Society put forward the view that if support were extended to small businesses there was a danger that volunteer led projects could be squeezed out. Arguments against were more varied. Scottish Agricultural Organisation Society took the view that proposing a restriction on the size of an organisation could inhibit the growth and contribution of organisations to rural development. The Institute of Chartered Foresters believed that support should also be given to small businesses, as they were more stable than micro businesses, an important factor in rural areas where employment opportunities are limited. Scottish Natural Heritage suggested that turnover, rather than staff numbers, would be a more appropriate cut off mechanism.

• Should a performance reserve be set for the LEADER axis? If so, how should it operate?

The balance here was strongly against introducing a performance reserve. Interestingly, those in favour were the organisations most closely involved with the implementation of the current LEADER programme (Midlothian Council, Tyne Esk LAG, Scottish Borders LAG and Ros Halley of Dumfries and Galloway LAG). Their view was that a performance reserve offered a real opportunity to make the best of what LEADER has to offer. In contrast to this Highland Council felt that a performance reserve may lead to an increase in the number of projects but would not necessarily secure quality LEADER projects. Scottish Estates Business Group argued that support should be based on outcomes, not the most number of projects. They also believed that holding back funds could lead to allocations being made not on merit, but on historic precedence. The Council for Scottish Archaeology saw a performance reserve as a possible disincentive to countries that have not developed successful LEADER programmes. Historic Scotland did not believe it would be an effective incentive, and also queried whether it would be necessary, as long as minimum standards applied and adequate monitoring arrangements were in place. Finally South of Scotland Alliance saw some possible incentive to increase the quality of programmes, but required more detail before committing itself.

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