LEADER approach: high administrative and operational costs

Subject: LEADER approach: high administrative and operational costs

According to the Court of Auditors’ report No 10/2022 published on Wednesday 6 July 2022, there is no evidence that the benefits of the LEADER programme, an EU rural development policy programme, outweigh its costs and risks. Under the LEADER approach (community-led local development), the EU provided up to EUR 9.2 billion in funding over the 2014-2020 period for projects in rural, urban and coastal areas. However, according to the Court, the LEADER approach comes with high administrative and operational costs. The European Commission itself said that at the end of 2020 the costs amounted to more than EUR 1 billion (one quarter of total expenditure). The Court also found that the project application and approval process (involving up to eight steps) was too complicated and slow.

In view of the above, can the Commission say:

1. Whether it agrees the administrative and management costs of the LEADER approach should be reduced?

2. What measures it will take to speed up the process for approving rural development projects?

Answer given by Mr Wojciechowski on behalf of the European Commission (16 August 2022)

1. The term ‘administrative and operational costs’ covers operating costs, personnel costs, training, public relations and costs of monitoring and evaluation of the strategy, animation and exchange between local stakeholders, as well as support of potential beneficiaries in developing operations and preparing applications. The Commission therefore views them as investments in human and social capital at the local level.

They are capped at a maximum of 25% of the total public expenditure of the community-led local development strategy but the Member States are free to set a lower limit. Economies of scale operate depending on the overall budget of the strategy and population and size of the area. The majority of funding for projects is disbursed later in the programming cycle due to a lead in time.

The Commission considers the ceiling as appropriate.

2. The implementation of community-led local development is a shared management responsibility between the Commission and the Member States. Best practices are shared in the European Network for Rural Development, financed by the Commission.

For the period 2023-2027, the Commission encourages Member States to make use of simplified costs options and focus the role of local action groups on the core tasks. In addition, the new delivery model of the common agricultural policy (CAP), based on results, should diminish the administrative burden and allow Member States to make full use of the potential of Leader and community-led local development.