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ANNEX 6
ELIGIBILITY & FUNDING

1 Grant Recipients

The following are entitled to apply for funding:

• selected Local Action Groups for administration costs and possible umbrella projects.
• properly constituted organisations and social enterprises
• private individuals where sponsored by public bodies, clubs and societies
• business partnerships and capital companies
• public agencies
• collaborations between groups and individuals listed above in an appropriately legally constituted form.

All applications for LEADER funding must be to implement measures and projects within the scope of a selected Local Development Strategy.

2 Type, scope and rate of funding support

2.1 Type of funding support

Support for projects is provided by LAGs in the form of grant awards. These awards can either be for individual projects including training, and also for "umbrella type" collective projects either run by the LAG itself or by another organisation.

2.2 Funding rates

LEADER funding to the LAGs from the Scottish Executive will match monies committed by LAG partners. Additional funding, either through cash or in-kind contributions, for projects can be made from private means (beneficiary's own contribution, commercial business funding, or from private and public funding sources). The success of bids for LEADER funding will depend on the level of commitment and additional funds levered in.

Awards of LEADER funds should not normally exceed 50% of eligible costs, apart from trans-regional and trans-national projects where 70% of eligible costs can be funded. Any funding awards exceeding these levels should be offset by lower awards elsewhere.

3 Grant requirements

3.1 General provisions

• projects and measures should demonstrate that they are sustainable over the long term (eg, through their financial plan or business concept). Revenue-generating projects must demonstrate their profitability. While this may appear somewhat in contradiction to the innovative spirit of LEADER, the expectation must be for projects to be successful and capable of being sustainable in their own right. An innovative approach with high risk might be adopted and approved but should still show an element of sustainability
• in principle projects may not commence before approval of funding. In individual cases the approving authority may allow projects to start early, but that may not be taken as a guarantee of funding being approved
• projects involving the production, processing and marketing of products listed in Annex I of the EU Treaty not being funded through Rural Development Contracts or Process & Marketing Grants Scheme are eligible provided they meet the various strategic outcomes and regulations
• measures involving qualification costs in accordance with the Council Regulation on European Structural Funds are funded solely through the ESF framework
• funding of community projects on Forestry and other forms of land management will be eligible provided they demonstrate wider community benefits and are not a direct replacement of Rural Development Contract grants. If a beneficiary applied for support for a project through RDC and this has been rejected, the same project should not be reconsidered for support from LEADER

4 Costs eligible for funding support

4.1 Implementation of the Strategy of a selected LAG

• costs incurred building capacity in the LAG with partners and LAG staff,
• costs incurred in establishing an administration process, equipment, and resources to manage the work of the LAG,
• raising awareness of Leader methodology through publicity
• staff costs
• staff training
• pro-active monitoring and evaluation

4.2 Implementation of the projects of a selected LAG

• costs incurred in implementation of projects (including project design, staff costs attributable to the project, and initial marketing and publicity)
• costs of marketing and publicity by the Local Action Group

4.3 Partnership working (across regions or countries)

• costs of preparing collaborative projects
• costs of implementing joint projects (including project design, staff costs attributable to the project, and initial marketing and publicity)

4.4 Management of Local Action Groups

• staff costs (including travel and expenses costs for LAG members)
• management costs of running the Group
• training and qualification costs incurred by the Group's management.

5 Funding restrictions

• projects with grant eligible costs of less than £1000 should not be funded
• existing core staff costs will be prohibited, must be project specific
• the following expenditure is not eligible for grant funding: consumables, running costs including telephone charges, rent or lease payments, operating costs, interest charges, leasing payments, etc
• funding will not be granted for the initial compilation of a Local Development Strategy but may be made available for major revisions to said strategy following an evaluation
• no funding will be granted for activities which are statutory obligations of regional corporate bodies ( SEPA, SNH etc)
• prize money is not eligible for funding
• for events organised as part of the publicity programme of the Local Action Group only the first or initial event is eligible for funding
• professional fees for architectural, landscape design and engineering services can only be funded up to a maximum level of 10% of the total building costs. Up to an additional 5% may be granted for projects with a particularly intensive planning element, e.g. work on protected buildings or technically complex projects
• within the context of collaboration, the costs of land and buildings which are to be used as part of a trans-regional or trans-national joint venture can only be funded with Scottish LEADER resources if they are situated within Scotland. Scottish budgetary funds can be used for the co-financing of trans-regional or trans-national projects situated outside Scotland, provided the Scottish Executive can determine their use

6 Multiple funding of Projects

Simultaneous funding of projects from LEADER funds and other public funding sources is only permitted where either State Aid approval has been approved by the European Commission, or where the different funding sources are being applied for differing purposes (State Aid rules). This only applies where the project could lead to market distortion. Projects funded by EAFRD must not be funded from other European sources.

Project funding should consist of a minimum of LEADER funds matched by local public funding. In addition private and additional public funding can be levered in. The total amount of all public grant support may not exceed 95% of the LEADER project eligible costs. If this 95% limit is exceeded, any reductions in funding will be made in the LEADER support. This would be waived in instances where the beneficiary is a public body.

7 Other provisions

• there is no statutory right to receive funding. Funding is subject to available budgetary provision and adequate resources from the EU
• the support of the EU must be explicitly acknowledged in awards of grant
• where LEADER support involves grant-funding for building projects and land purchase it is expected that the project will deliver the originally funded intention for 10 years after its completion, and for 5 years after completion or delivery for all other types of tangible items
• appropriate protection should be put in place against potential claims for reclamation or restitution (this rests with the locally accredited accountable body)
• A Service Level Agreement will be signed by the LAG and the Scottish Executive clearly setting out what is expected.

8 In-Kind Contribution

Measures involving in-kind contributions of a public or private beneficiary, namely the provision of goods or services, for which no cash payment is made, may be eligible expenditure provided that the following conditions are fulfilled:

• the contributions consist in the provision of land or buildings, equipment or raw materials, research or professional work or unpaid voluntary work
• the contributions are not made in respect of financial engineering in relation to venture capital funds, guarantee funds or loan funds
• the value of the contributions can be independently assessed and verified

In the case of provision of land or buildings, the value shall be certified by an independent qualified valuer or duly authorised official body. In the case of unpaid voluntary work, the value of that work shall be determined taking into account the time spent and the hourly and daily rate of remuneration for equivalent work, where relevant on the basis of an ex-ante established system of standard costing, provided that the control system provides reasonable assurance that the work has been carried out.

Public expenditure co-financed by the EAFRD, contributing to an operation which includes contributions in kind shall not exceed the total eligible expenditure, excluding contributions in kind, at the end of the operation.

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