The long-awaited special report of the European Court of Auditors on LEADER and CLLD has been published. The overall message from the ECA is that “LEADER and community-led local development facilitates local engagement but additional benefits still not sufficiently demonstrated”.
We present below the Executive Summary and the Conclusions and Recommendations and plan to offer a review of the report shortly.
To see the full report click below:
I The EU introduced the LEADER programme in 1991 as a bottom-up initiative to support the development of disadvantaged rural regions through projects addressing local needs. Since 2014, the EU has used the LEADER approach (known as community-led local development) for several EU funding streams in rural, urban and coastal areas.
II The main characteristic of the LEADER approach is the application of participatory and bottom-up methods to involve local communities in project development and decision-making processes. Local action groups, made up of partners from the public, private and civil society manage activities. In the 2014-2020 period, the EU planned to provide funding of up to €9.2 billion for LEADER and community-led local development.
III The LEADER approach involves extra costs and risks compared to mainstream (top-down) EU spending programmes. Additional costs arise from setting up and running local action groups’ administrative structures. Additional risks are created by the lengthy procedures, extra administrative requirements for project owners, and potential conflicts of interests.
IV Some of these extra costs and risks are justified if local action groups deliver additional benefits compared to mainstream (top-down) EU spending programmes. The Commission’s guidance suggests that these benefits manifest themselves in improved social capital, improved local governance and enhanced results from projects.
V Our audit covers the 2014-2020 EU funding period. We examined whether the LEADER approach delivered benefits that justified its additional costs and risks, in particular compared to mainstream (top-down) EU spending programmes. To assess that we examined whether it facilitated local engagement and resulted in projects with demonstrable benefits in terms of local governance, improved social capital and enhanced results. We also checked whether the introduction of the new multi-fund approach resulted in better coordination of local development support.
VI This audit also follows-up on our 2010 special report on LEADER assessing whether the Commission addressed the weaknesses identified. Through this report, we aim to provide insights and timely recommendations for the ongoing Commission’s evaluation of the LEADER approach.
VII More than a decade after our 2010 special report on LEADER, our audit shows that improvements have taken place in some areas and that the LEADER approach facilitates local engagement. However, there is little evidence that the benefits of the LEADER approach outweigh the costs and risks it incurs.
VIII While most Member States applied pertinent procedures to select and approve local action groups, some applied less demanding quality standards when selecting local development strategies. We found that one Member State did not include quality criteria in its selection process. The project application and approval process was complicated (involving up to eight steps) and included extra administrative requirements for project owners compared to mainstream spending programmes. Public authorities no longer dominated project selection bodies (as we had found in 2010), but these were frequently not representative of the local community or gender-balanced.
IX We found that local action groups selected projects that were in line with the broad objectives set in their local development strategies. Some Member States and local action groups used LEADER to fund statutory tasks of national, regional or municipal authorities or other activities for which other specific EU and national funding programmes existed.
X While two out of six of our 2010 recommendations had been addressed, we found that the Commission’s monitoring and evaluation framework has still not provided evidence of LEADER’s additional benefits. In our 2018 opinion on Commission proposals for the new common agricultural policy, we stressed that the Commission should follow the ‘evaluate first’ principle when revising existing legislation. The Commission is in the process of evaluating the benefits of LEADER.
XI In view of the additional costs and risks compared to other funding models and the continued lack of demonstrable benefits, we recommend that the Commission should evaluate the costs and benefits of LEADER and assess the community-led local development.
Conclusions and recommendations
76 Our audit examined whether the LEADER approach delivered benefits that justified its additional costs and risks, in particular compared to mainstream (top-down) EU spending programmes.
77 More than a decade after our last special report on LEADER, we found that improvements have taken place in some areas and that LEADER creates structures that facilitate local engagement. However, the LEADER approach involves higher administrative and running costs, slow approval processes and did not result in projects with demonstrable additional benefits. Overall, we conclude that there is little evidence that the benefits of the LEADER approach outweigh the costs and risks it incurs.
78 LEADER, because of its participative approach, incurs high administrative and running costs. The EU Regulation caps these costs at 25 %. In the 2014-2020 programming period, Member States planned to spend 17 % on administrative and running costs. These costs include facilitating the implementation of the local development strategy and helping potential beneficiaries to develop projects. According to Commission reporting, as at the end of 2020, these costs amounted to €1.04 billion (24 % of total spending at that stage, which is within the limits of the Regulation). The share of such costs compared to project spending tends to decrease over the programming period cycle.
79 We found that local action groups succeeded in promoting local engagement when developing their local development strategies, which constitutes an improvement on the situation we found more than a decade ago. Most Member States covered by our audit applied pertinent procedures to select and approve local action groups based on these strategies, but some applied less demanding quality standards when selecting local development strategies. We found that one Member State did not include quality criteria in its selection process This would have allowed focusing on the best local development strategies.
80 We found that the project application and approval process was complicated and included extra administrative requirements for project owners compared to mainstream spending programmes. This contributed to a situation where at the time of the audit, Member States had completed and paid for relatively few projects (39 %). We also found that LEADER project selection criteria were, in most cases, quite general, which allowed local action groups to select a broad range of projects.
81 The project selection process was no longer formally dominated by public authorities (as we had found in 2010) and local action groups succeeded in facilitating local engagement. We found in 2021, however, that most of the local action groups were not gender-balanced and young people were under-represented. This creates the risk of decision-making bodies not considering their views and interests in the decision-making process.
82 While some of our 2010 recommendations had been addressed, we found that the Commission’s monitoring and evaluation framework has still not provided evidence of LEADER’s additional benefits compared to mainstream funding. Experts consider that some parts of these benefits – i.e. social capital and local governance – are difficult to demonstrate. In our 2018 opinion on Commission proposals for the new common agricultural policy, we stressed that the Commission should follow the ‘evaluate first’ principle when revising existing legislation. The Commission started evaluating the benefits of LEADER.
83 Our analysis of LEADER projects showed that they addressed the broad general objectives set in the local development strategies. However, we found projects that are specifically addressed by non-LEADER rural development measures, and through other EU spending programmes. Some Member States and local action groups used LEADER to fund projects that typically are statutory tasks of national, regional or municipal authorities.
84 The multi-fund approach was a new feature for the 2014-2020 programming period, introduced to better coordinate local development support and to reinforce the links between rural, urban and fisheries areas. Overall, we found that the multi-fund approach, in its current form, increases complexity for funding local development projects.
Recommendation 1 – Comprehensively evaluate the costs and benefits of LEADER
The Commission should comprehensively evaluate both the costs and benefits. This evaluation for LEADER should cover (points a-e):
a. The application of a selection process of local action groups that allocates money on quality local development strategies;
b. Actions to reduce costs and administrative complexities (e.g. extra administrative burden for project owners, long selection procedures);
c. The extent to which decision-making bodies are representative, including by age, gender and other target groups;
d.The extent to which LEADER funded projects bring additional benefits compared to non-LEADER projects and
e. the extent to which LEADER funds are used to fund the statutory tasks of EU, national, regional or local bodies.
Target implementation date: 2023
Recommendation 2 – assess the Community-Led Local Development approach
When assessing the effectiveness and efficiency of the Community-Led Local Development, the Commission should cover to the extent possible the elements outlined in points (a) to (e) of recommendation 1.
Target implementation date: 2025 (for the 2014-2020 ex post evaluations)