The Rural Development Programme

04 July 2000

The Assembly's independent auditor, Mr John Dowdall, has today published a report on the Rural Development Programme. Focusing on the extent to which the taxpayer has received value for money from the programme, Northern Ireland's Comptroller and Auditor General reports that:

the programme is an important vehicle in the drive towards the economic and social revitalisation of deprived rural areas in Northern Ireland. However, while considerable progress has been made, the taxpayer has not received best value for money from every aspect of the programme
the nature and incidence of the weaknesses detected in the Department's project appraisal process give cause for concern. A pattern emerged in which the appraisal process either failed to detect the main risks, or to properly address them
most of the major regeneration projects examined by the Audit Office had experienced difficulties, with the benefits to date being less than anticipated
a major strength of the programme has been the extent to which it has succeeded in developing rural community networks and partnerships within rural areas
there is a need for structural rationalisation and greater co-ordination between the range of bodies involved in the programme.

Background

The Rural Development Programme seeks to establish community groups in deprived rural areas and to develop their business and planning skills. The aim is to equip groups to undertake regeneration projects in their areas. The Department of Agriculture and Rural Development regards rural regeneration as a long-term initiative, at the leading edge of Government thinking on innovation and higher risk development. Over the nine-year period to March 1999, a total of £51 million was spent under the rural development programme, including substantial funding from the European Union and the International Fund for Ireland.

The Audit Office looked at rural community development, examined the appraisal, monitoring and performance of a sample of major regeneration projects and assessed the overall effectiveness of the programme. The examination included a detailed review of 15 major projects, which had received some £19 million assistance.

Main Findings

On Rural Community Development (Part 2 of the Report)

the programme has succeeded in establishing rural community development in a number of areas where it had been underdeveloped or non-existent and has provided a wide range of support to rural communities since 1991. There is evidence, however, that some rural dwellers, such as farmers and the long-term unemployed, are not sufficiently represented within community groups (paragraph 2.29)

On Project Appraisal (Part 3 of the Report)

the absence of comprehensive and clearly documented procedures for the appraisal, monitoring and evaluation of regeneration projects, during the first seven years of the programme, was a serious shortcoming (paragraph 3.9 to 3.10)
the nature and incidence of the weaknesses detected by the Audit Office in the Department's appraisal process give cause for concern. A pattern emerged in which the appraisal process either failed to detect the main risks involved in projects, or to properly address those risks. In a number of cases, it appeared that the appraisal process had little bearing on the Department's decision as to whether or not to provide assistance (paragraph 3.38).
the Audit Office acknowledges the innovative nature of the programme and that the Department has been working in disadvantaged areas from a very low level of previous activity. However, in its opinion, many of the shortcomings in the appraisal process arose because the Department's selective financial assistance scheme was not implemented in a planned and structured fashion (paragraph 3.39)

On Project Monitoring and Performance (Part 4 of the Report)

serious shortcomings in financial control were identified in seven of the 11 sample projects which had been trading for over a year. The Audit Office expresses concern over the risk to public funds that has resulted and considers that the weaknesses raise doubts as to the adequacy of the Department's project implementation and monitoring procedures (paragraphs 4.8 and 4.9)
of the 11 projects in the Audit Office sample which had been trading for more than one year, all had experienced some form of difficulty and had fallen short of their projected performance. In seven of these projects, 15 separate offers of additional funding totalling £1.94 million had been required. Also, seven of the eight projects which had secured an IFI loan had difficulties in meeting repayment obligations and had been granted a moratorium on the repayment of interest (paragraphs 4.15 to 4.19)

On the Effectiveness of the Programme (Part 5 of the Report)

the Department has been slow to put in place, a comprehensive management information system that would provide the regular flow of key information necessary for an ongoing monitoring and assessment of the economic and social performance of the programme (paragraph 5.5)
a major strength of the programme has been the extent to which it has succeeded in developing rural community networks and partnerships within rural areas. This has brought various public, private, voluntary and community-based bodies together, to tackle rural deprivation. A review commissioned by the Department estimated the value of volunteering within the programme at some £500,000 per year (paragraphs 5.11 to 5.14)
at December 1998, some 244 jobs had been created and another 18 existing jobs safeguarded, by regeneration projects. However, there has been no analysis of the durability of employment created or the quality of jobs supported - for example, whether jobs were full or part-time, casual or seasonal and the degree of social inclusion (paragraphs 5.20 and 5.21)
the Audit Office considered that the job creation impact of the programme has been expensive with the average cost per job in the 15 sample projects ranging from £44,690 to £699,415. The overall average cost per job was £102,886. In the Department's view, the cost per job under RDP was balanced by the positive social, environmental and political impacts of the projects (paragraphs 5.23 to 5.26)
the results of a survey, conducted by the Audit Office, of a number of the main representative bodies involved with rural regeneration, support the view that the programme has succeeded in engaging many local communities in the regeneration process and is providing valuable support. However, there is a very strong message that the delivery mechanisms need to be re-structured and that some aspects of support - such as guidance and training - need to be improved (paragraphs 5.31 and 5.32).