Hogan’s Vision for Local Development Companies is Flawed

ildn_theme_logoCopy of letter Published in the Letter to the Editor Section of the Sunday Independent, 19th May 2013

Madam – We wish to correct a number of serious inaccuracies in the article by John Drennan (Sunday Independent, May 12, 2013) regarding the operation of LEADER and the Local Development Companies.

We are independent not-for-profit companies – not state companies, as described in the article. Local Development Companies consist of voluntary board members and operate to government-recommended salary scales, including those of the CEOs.

Furthermore, administration expenditure by our companies is capped by both the EU and IrishGovernment and all companies are required to operate within these caps without exception.

In the LEADER Programme for example, our administration levels are below those of similar public sector bodies and the local authorities. It is also totally inaccurate to suggest the Local Development Companies are spending “scandalous sums” on administration and that significant administration costs are diverting resources away from frontline services.

The reality is that Local Development Companies are always seeking on-going efficiencies across all areas of operations to ensure frontline services continue to be delivered.

As for being companies that provide “small grants to small enterprises, community projects and rural development”, the reality is very different. Under LEADER, our companies can provide development aid of up to €500,000 to strategic community-development projects and up to €200,000 to flagship private-sector projects with the department’s approval.

The minister recently announced the release of €90m to Local Development Companies to support projects already approved in principle by our companies.

Minister Phil Hogan‘s controversial ‘alignment’ policy seeks to bring all of the programmes and functions of the Local Development Companies under the remit of the local authority structure. This policy, which would take away the independence of successful and cost-efficient Local Development Companies, is increasingly being recognised as fundamentally flawed – as illustrated by the recent open letter from 22 leading academics in the sector.

It is time for the Government to drop the ‘spin’ and engage in a real debate and agreement about the future of the Local Development Companies.

John Walsh,
Acting Chairman,
Irish Local Development Network


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