A report entitled ‘Ensuring Value for Money from Rural Development Grants Made Without Competition’ published by Audit Wales on June 30 has exposed the long-standing concerns of the Farmers’ Union of Wales (FUW) regarding RDP expenditure and accountability.
In 2013, it was announced that the Welsh Government would use the maximum pillar transfer rate of 15% from Pillar 1 direct farm payments into the Pillar 2 Rural Development Programme (RDP). This 15% transfer rate equates to around an additional 40 million pounds a year to the RDP and was higher than the transfer rate chosen by most other European countries.
In response to opposition from the agricultural industry towards the maximum transfer rate, the Welsh agricultural industry was assured that the RDP would deliver transformational change for the sector. However, the FUW was extremely concerned at the decision to scrap a dedicated RDP Monitoring Committee and bring the responsibility under a single EU Programme Monitoring Committee as this would undermine the scrutiny and monitoring of the Welsh RDP expenditure.
The Audit Wales report on the RDP contains many of the FUW’s concerns and states that key aspects of the design, operation and oversight of the Welsh Government’s Rural Development fund were not effective enough to ensure the £53 million of grant awards would deliver value for money. In addition, the report states that the Welsh Government had adopted an approach of granting funds without competition and, in some cases, without taking any alternative steps to ensure the projects would deliver value for money.
Similar concerns were raised in a Wales Audit Office report in 2018, which recommended that scrutiny arrangements for the management and delivery of the RDP be improved and that risk management arrangements for the RDP be clarified and documented.
During the formative stages of the current RDP, the FUW worked in partnership with other farming organisations to present a targeted RDP aimed at delivering a productive, profitable and progressive agricultural industry through carefully monitoring the outcomes of actions and interventions to avoid inappropriate reinvestment. The FUW is convinced that many of the shortcomings identified by the Auditor General in this latest report, and in the previous 2018 findings, would have been avoided had those recommendations been taken up.
The FUW is now urging Welsh Government to use the remaining RDP to take action to restore confidence and get money out to rural businesses, including through the derogations that have been introduced due to the Covid-19 pandemic.