LEADER Programme Full Application Appraisal · PDF fileLEADER Programme Full Application Appraisal Guidance . ... 5.4 LAG Decision Making Group ... Confirmation of Eligible Expenditure

LEADER Full Application Appraisal Guidance LEADER G6 v2.1 Effective Date: 06/01/16

LEADER Programme Full Application Appraisal Guidance

Page 2 of 54 LEADER Full Application Appraisal Guidance LEADER G6 V2.1 Effective Date: 06/01/16

1. ABBREVIATIONS USED IN THIS GUIDANCE NOTE ..................................................................... 4

2. GLOSSARY ..................................................................................................................................... 5

3. TABLE OF GUIDANCE DOCUMENTS, FORMS AND TEMPLATES .............................................. 7

4. GENERAL GUIDANCE FOR ASSESSORS ..................................................................................... 9

5. APPRAISAL, QUALITY CONTROL AND DECISION: RECOMMENDATION AND SIGNATURES 10

5.2 Appraisal ....................................................................................................................................... 10

5.3 RD Quality Check (QC) ................................................................................................................. 10

5.4 LAG Decision Making Group ....................................................................................................... 10

6 APPRAISAL EXECUTIVE SUMMARY ........................................................................................... 11

6.1 Application Details ....................................................................................................................... 11

6.2 Project Description ....................................................................................................................... 11

6.3 Project Summary .......................................................................................................................... 11

6.4 Applicant Business and Background .......................................................................................... 11

6.5 Timescales .................................................................................................................................... 12

6.6 Proposed Eligible Costs, Ineligible Costs and Claims ............................................................... 12

A Eligibility of Costs ................................................................................................................... 13

B Eligibility of Quotes................................................................................................................. 14

Fraud checks: additional points to review ....................................................................................... 15

Use of QS valuations instead of quotes .......................................................................................... 18

How have concerns been addressed? ............................................................................................ 18

Confirmation of Eligible Expenditure ............................................................................................... 18

6.7 Grant Amount, Grant rate and Project Funding ......................................................................... 19

6.7.1 Amount of grant requested and grant rate requested are appropriate ..................................... 19

6.7.2 Sufficient private funding package is in place. ......................................................................... 20

6.8 Proposed Outputs and Milestones .............................................................................................. 21

6.9 Appraisal Score Summary ........................................................................................................... 21

6.10 Key Project Strengths .............................................................................................................. 21

6.11 Key Project Weaknesses .......................................................................................................... 21


6.12 Project Specific Conditions...................................................................................................... 21

6.13 Appraisal Conclusion and Recommendation ......................................................................... 22

7 SCORING & ASSESSMENT .......................................................................................................... 22

7.1 Strategic Fit ................................................................................................................................... 23

7.1.1 Fit with Local LEADER Priorities ............................................................................................. 23

7.1.2 Jobs & Growth ........................................................................................................................ 24

7.2 Need for the Project ...................................................................................................................... 25

7.2.1 Rationale for Funding Request & Deadweight ......................................................................... 25

7.2.2 Understanding of Target Market .............................................................................................. 28

7.2.3 Proposed Design and/or Equipment ........................................................................................ 29

7.3 Financial Performance ................................................................................................................. 30

7.3.1 Solvency and Financial Performance of the Underlying Business ........................................... 30

7.3.2 Demand Projections and Ability to Supply ............................................................................... 33

7.3.3 Financial Projections ............................................................................................................... 35

7.4 Value for money and impact of the project on other businesses .............................................. 37

7.4.1 Jobs and Skills ........................................................................................................................ 37

7.4.2 Other Direct Outputs ............................................................................................................... 38

7.4.3 Wider Outcomes ..................................................................................................................... 39

7.4.4 Competition and Displacement ............................................................................................... 40

7.4.5 Gross Value Added ................................................................................................................. 46

What is Gross Value Added (GVA)? ............................................................................................... 46

The Required Data Input ................................................................................................................. 47

Calculation Results for GVA and GVA per FTE .............................................................................. 47

7.5 Project Sustainability ................................................................................................................... 48

7.5.1 Environmental Sustainability and Equality and Diversity Impacts ........................................... 48

7.5.2 Exit Strategy, Future Delivery, Monitoring and Evaluation ....................................................... 49

7.6 Delivery Approach ........................................................................................................................ 50

7.6.1 Project Delivery ....................................................................................................................... 50

Project Team .................................................................................................................................. 50

Recording and reporting ................................................................................................................. 51

Reliability of the applicant ............................................................................................................... 51

7.7 Risk ................................................................................................................................................ 53

7.7.1 Risk Assessment .................................................................................................................... 53


1. Abbreviations used in this Guidance Note

CAP Common Agricultural Policy

Defra Department of Environment Food & Rural Affairs

DM Decision Maker

DORA Database of RDP Applications (further details on DORA; refer to the DORA Guidance Note found on the RD area of the guidance hub).

EAFRD European Agricultural Fund for Rural Development

EC European Commission

EU European Union

FA LEADER Full Application

LEADER LEADER Programme

OA Outline Application

QC Quality Check

RDP Rural Development Programme

RD Rural Development directorate

RPA Rural Payments Agency

SEI Socio Economic Inspections


2. Glossary

Definition of the key terms used in this Guidance Note, and specific to this context, are set out below.

Term Description

Accountable Body The administrative and financial lead with the ability to administer public funds and who is responsible for the satisfactory operation of the Local Action Group.

Applicant An individual submitting a LEADER Programme Application.

Applicant Handbook A public document designed to help an Applicant in the development of a LEADER Outline and Full Application.

Appraiser A member of the Accountable Body or LAG responsible for undertaking an independent appraisal of due diligence on a LEADER Full Application.

Auditor A RPA officer or statutorily empowered third party (RPA, Certifying Body, European Commission or European Court of Auditors) responsible for performing compliance and fairness checks on contracted projects under the LEADER scheme.

Call for Activity A written invitation for Applicants to submit proposals against a published specification.

Decision Maker A member of the Accountable Body with sufficient authority to make fundamental decisions, not including project approval

DORA (Database of RDPE Applications)

A RD management and reporting tool used by RDP Managing Authority, RPA and LAG Accountable Bodies

Grant Funding Agreement

Legally binding contract between the Accountable Body and the Applicant setting out involvement, conditions and other implied and applied terms in the delivery of a project under the LEADER scheme.

LAG Local Action Group. The Local Action Group who have delegated authority to approve or reject LEADER Applications for funding.

LAG Decision Making Group

An agreed group of LAG members who make funding decisions on Full Applications and if applicable make decisions on Outline Applications. This could be a sub-set of the full LAG, or the full LAG itself, depending on each LEADER group’s set up.

LAG Manager A member of the Accountable Body (but can be another person) who is responsible for managing the delivery of the LEADER programme on behalf of the LAG.

LAG Officer A member of the LEADER project team employed by the Accountable Body responsible for LEADER delivery on behalf of the LAG.

Operation The term used by the European Commission to refer to each of the discrete activities that is covered by a funding agreement. ‘Operation’ is usually synonymous with ‘project’ but in some cases an operation may include a number of projects within it.


RD Quality Check A check undertaken by a person within RD to ensure that the processes have been completed as detailed in this Operational Manual.

Relationship Manager

Member of the Rural Development directorate who is the LAG’s point of contact in the RPA.

Sponsor A person who provides support, guidance and advice to help the Applicant submit a LEADER Outline Application. They also undertake day to day relationship management.


3. Table of guidance documents, forms and templates

Guidance

Guidance / Factsheet name ID

LEADER Handbook for Applicants LEADER G1

LEADER Outline Application Process LEADER G2

LEADER Outline Application Appraisal Guidance LEADER G3

LEADER Programme Full Application Process LEADER G4

LEADER Programme Full Application Eligibility & Completeness Guidance

LEADER G5

LEADER Programme Full Appraisal Guidance LEADER G6

RDP State Aid Guidance RDP Form 002

Forms

Form name ID

LEADER Outline Application Form LEADER form 001

LEADER Outline Application Eligibility & Completeness Check Form

LEADER form 002

LEADER Outline Application Process Checklist LEADER form 003

LEADER Outline Application Appraisal Form LEADER form 004

LEADER Outline Application Quality Check Form LEADER form 005

LEADER Full Application Form LEADER form 006

LEADER Full Application Annexes LEADER form 006a

LEADER Full Application Process Checklist LEADER form 007

LEADER Full Application Eligibility & Completeness Form LEADER form 008

LEADER Full Appraisal Form LEADER form 009

LEADER Full Appraisal spreadsheet LEADER form 009a

LEADER Full Application RD QC Form LEADER form 10

National forms

LEADER Division of Duty Matrix LEADER form 011


Templates

Template name ID

OA Automatic Receipt Email LEADER Template 1

Unacceptable Format Email LEADER Template 2

Incomplete or Not in Call Window Email LEADER Template 3

OA Progress Email LEADER Template 4

Hard Copy File Label LEADER Template 5

Rejection Letter at OA Stage LEADER Template 6

Invitation to Full Application Letter LEADER Template 7

Extension to Full Application Deadline Response Email LEADER Template 8

Project withdrawal notification letter LEADER Template 9

Full Application not accepted, no previous endorsement LEADER Template 10

Electronic Full Application receipt email LEADER Template 11

Endorsement withdrawn – late application LEADER Template 12

Acknowledgement of a Hard Copy Full Application email LEADER Template 13

Full Application not signed request email LEADER Template 14

Full Application incomplete LEADER Template 15

Full Application Ineligible LEADER Template 16

Full Application Rejection Letter LEADER Template 17


4. General Guidance for Assessors

In order to complete a Full Application appraisal the appraiser needs to complete the FA Appraisal Form 009 and the FA Appraisal spreadsheet 009a. Guidance on how to complete the spreadsheet is in section 6.6 and section 7.3 of this document.

The LEADER Programme Full Application Appraisal (form 009) consists of three sections:

Appraisal, Quality Control and Decision: Recommendation and Signatures

The front sheet of the form is intended to capture, in one location, the outcome of the appraisal, quality check and the final decision of the LAG Decision Making Group.

Appraisal Executive Summary

The Appraisal Executive Summary is intended to aid the decision making process of the Local Action Group by providing an overview of the proposed project, applicant, a summary of the appraisal analysis and a recommendation.

The information in this section should be as concise as possible, highlighting key information which LAG members may wish to consider in greater detail by examining the in-depth analysis in the Scoring & Assessment section.

Scoring & Assement

The appraisal process requires the application of a combination of the Appraisers judgement, scoring and recommendations.

Appraisal text should be provided to assess, analyse and draw conclusions on the how well the information provided by the applicant meets each criteria. The scoring boxes standardise the comments to some degree.

The detailed appraisal contained within the Scoring and Assessment section will feed into the Executive Summary and should therefore be completed first.

Please note that any issues and/or questions which have been raised with the applicant during the appraisal should be recorded in Annex 2 at the back of the Full Application Appraisal Form (009). It is important to record both the queries and the outcome in order for the appraisal to clearly show that the most up-to date information has been used within the appraisal, and that issues have been dealt with. Record where the response has been saved in the file so that others can quickly locate the additional information received.

The Appraiser will also need to review the Eligibility & Completeness Check (form 008) completed by the Sponsor.


5. Appraisal, Quality Control and Decision: Recommendation and Signatures

The front sheet of the Appraisal form 009 (section 1) is used to capture the outcome of the appraisal, quality check and the final decision of the LAG Decision Making Group in one easily referenced location.

5.2 Appraisal

Section 1.1 should capture the Appraiser’s recommendation.

The Appraiser should add the following information once they have completed their appraisal of the project:

Name

Appraisal recommendation

Read, sign and date the conflict of interest declaration.

5.3 RD Quality Check (QC)

Section 1.2 should capture the outcome of the Rural Development Quality Check.

To ensure that the completed QC form (LEADER form 010) is returned to the Appraiser as quickly as possible; a scanned copy of the form will be returned electronically and should be added to the project file.

The Appraiser is therefore responsible for adding the following information to the front of the form:

Name & Job Title of RDT Quality Checker

Outcome of QC

Date QC completed

5.4 LAG Decision Making Group

Section 1.3 should capture the recommendation of the LAG Decision Making Group.

Detailed minutes of each meeting should still be recorded, including declaration of conflicts of interest, and should then be added to the file of each project considered by the group.


6 Appraisal Executive Summary

The Executive Summary (section 2) is intended to aid the decision making process of the LAG by providing a concise overview of the project, applicant, the appraisal analysis and the Appraiser’s final recommendation. It should be completed after completing the Scoring and Assessment section.

LAG members will use the information in the Executive Summary as a starting point to identify which aspects of the application and full appraisal/scoring require additional consideration/scrutiny.

6.1 Application Details

Complete the table provided at section 2.1.

The Appraiser must ensure that project details match those summarised on the Application Form (006), the Eligibility and Completeness form (008) and those entered on DORA.

6.2 Project Description

Provide a clear, concise project description at section 2.2 which can be used in the grant funding agreement, any publicity information and on DORA. The description should briefly state what the project is, and what the applicant is going to use the grant funding to do.

6.3 Project Summary

The project summary (section 2.3) should expand on the information provided in the Project Description.

Consider the following:

Has the project been clearly defined by the applicant?

Is it easy to understand what is being proposed?

What exactly will the grant funding be spent on?

What is the location of the project?

Are the timescales for the project realistic?

What are the objectives of the proposal and are they clear, realistic, detailed and appropriate to the project?

Is there a logical rationale that flows from the objectives to the activities and outputs?

Who will benefit from the activities?

Is the information which has been provided by the applicant sufficiently detailed? What, if any, clarification has been required?

6.4 Applicant Business and Background

Provide a concise description at section 2.4 which summarises the background of the applicant business and identifies why the business wishes to undertake this project.

Identify the following within the response:

The name of the applicant business and individual who is responsible for the project;

Details of any other businesses / individuals involved in the application;


The activity of the applicant business;

A historical context for the business by describing the structure and identifying what stage it is in establishment (E.g. is this a new business or will a new business be created? Does it have a company registration number? Is it VAT registered…?)

The business size and number of employees,

How and why the proposed project has come about and who is involved in its development and proposed delivery?

The key reasons why the business wishes to undertake the proposed project.

6.5 Timescales

Complete the table provided at section 2.5 with the key dates identified in the application.

Consider whether the dates proposed by the applicant seem realistic and propose revised timescales if applicable.

6.6 Proposed Eligible Costs, Ineligible Costs and Claims

The appraiser’s commentary at section 2.6 should confirm:

whether or not all costs/items applied for are eligible

whether the quotes and preferred suppliers are acceptable

Insert the ‘Project Cost Summary’ table from tab four (‘Costs and Claims’) of the LEADER Full Application Appraisal Spreadsheet (form 009a)

Remember to check that within the proposed claim schedule the final claim grant amount is a minimum of 15% of the total grant award.

Please note that a copy of the LEADER Full Application Appraisal Spreadsheet (form 009a) should be provided as an annex to the Appraisal Form.

The Appraiser should address any concerns raised in the application eligibility and completeness check. Check that the information has been copied across correctly from the Application Annexes spreadsheet 006a (Annex B, Project Cost & Quotes) into the Full Application Appraisal Spreadsheet (form 009a) Tab 1, Costs & Quote. Initial checks will have been completed by the Sponsor as part of the ECR on the Quote Check checklist tab in the Full Application Appraisal Spreadsheet (form 009a) Tab 1, Costs & Quote. (Form 009a). Review the completed Quote Check checklist for each item of expenditure, with the relevant quotes, and any additional evidence to provide assurance that the expenditure and quotes are acceptable. On Tab 1, Costs & Quotes (Columns O:Q) confirm for each item that the review has been carried out and whether these have been assessed as acceptable and compliant


Eligibility of Costs Reviewed & Confirmed

Eligibility of Quotes Reviewed & Confirmed

Lowest Quote selected? If the answer to any is “no” provide a brief explanation in column R, and fuller commentary in the appraisal.

A summary of these findings can be added to the Appraisal Document (Hide columns D:N) Copy the table columns C, O, P Q

A Eligibility of Costs

1. For each of the items listed in the application consider whether the item is eligible under the

Applicant Handbook. If there are concerns please consult your local RD Relationship Manager. .

o Eligible items: what is the reasoning and what assessment has been carried out to verify the eligibility of the item?

o Ineligible items: what is the reasoning and what assessment has been carried out to confirm the item is ineligible.

2. Are there any concerns about over specification or uncompetitive pricing? The quotes

for the items included in the application need to be assessed to ensure that the specifications and capabilities are appropriate to the project. Check that they are not excessive in terms of scale, scope, capability and price in relation to their use and requirement for the project.

a. For any of the quotes submitted, has the supplier included items in the quote that are not required for / relevant to the project and should be removed? If yes, how has this been addressed?

b. For any of the quotes submitted, has the applicant submitted quotes for the highest possible specification of item (e.g. gold plating)? If yes, has the applicant explained what it does and why it is better than a standard specification? Is this required to meet the needs of the project? Is their reasoning acceptable?

c. For any of the quotes submitted, does the quote appear expensive in comparison with other similar items/quotes? Have the costs been overinflated for the purposes of the grant? If yes, how has this been addressed?

d. Do any of the costs need removing? Can the item/s be included in the grant? Why is this acceptable? Where concerns have been raised discuss this with the local RPA contact if necessary to ensure a nationally consistent approach as to how to proceed.

e. Do any of the quotes show unusual price patterns? For example do eligible items

appear to be priced disproportionately higher than ineligible items?

f. Are the prices consistent between all three quotes?

g. Do all three quotes show identical amounts for individual items?


Some of this information may be found in responses to other questions, e.g. Project Design and Rationale for Funding.

The Appraiser should use their judgment in assessing the issues and reaching a conclusion.

3. Issues / concerns / conditions

If there are any other concerns around the eligibility / appropriateness of costs, what are they and how has these been addressed?

Are offer letter conditions required?

Can a grant still be offered?

Are concerns of such a scale that the project should be recommended for refusal?

B Eligibility of Quotes

Quotes –consider whether sufficient and acceptable quotes have been provided for each item. 4. For the item, do the quotes submitted meet the criteria in the Applicant Handbook (see

below)? Where not, explain why. Can / have the issues been resolved? Can the item remain as eligible expenditure and why? See guidance below.

All quotes/tenders must following the guidelines set out in the Applicant Handbook. They must include:

a detailed and itemised breakdown of costs

the supplier’s address, telephone number and a contact name

the VAT number (if the supplier is VAT registered and VAT is charged on the quote)

the supplier’s company registration number (if they are a limited company).

comparable with each other in terms of quality, size, quantity, units and specification

from the last 6 months and still valid at the time of application

made out to the same business address as on the application form. The applicant should make sure any online quotes should use this address.

The quotes/tenders must be:

comparable with each other in terms of quality, size, quantity, units and specification

from different suppliers that trade as standalone businesses and are not linked through shared ownership

from a business that is independent from the applicant or their business.

Where applicants include references to a catalogue listing, these should be supported by a print-out or photocopy which includes:

the date on which it was printed or copied

the item description and the price

the name of the company or catalogue

the page number or webpage.


Where a tender has been issued, has the guidance in the Applicant Handbook been followed? Comment on the tenders submitted and their eligibility. 5. For the item, have the appropriate number of quotes/tenders been provided in accordance

with the table below? Where not, explain why. Explain whether this is satisfactory and why. Can / have the issues been resolved? Can the item remain as eligible expenditure and why? See guidance below.

The quote/tender requirements are:

£500 or less 2 quotes or references to 2 catalogue listings

£501 to £1,500 3 quotes or references to 3 catalogue listings

£1,501 to £50,000 3 quotes or 3 formal tenders

£50,001 or more 3 formal competitive tenders (These are viewed as quotes that suppliers put together within an identified timeframe and that follow a detailed and itemised specification provided by the applicant).

If the Appraiser has any concerns around quotes from a limited company they should complete checks on Companies House to check the company is operating and not a sham. Print copies of internet searches and add these to the project file to evidence the checks undertaken.

Fraud checks: additional points to review

When completing the checks detailed above on the quotes, be mindful of the guidance below and document the checks undertaken. Where any of these points are triggered, look into the detail more closely and record what has been done to resolve the issue. Where the issue cannot be resolved, document the findings in the appraisal and refer the matter to the local RPA contact for further guidance. When reviewing the three quotes for an item consider whether they appear genuine. Check for occurrences where all three or two out of the three have:

Similar typographic errors

Similar errors in name/address of beneficiary

Similar logos and font type / size

Wrong brand or model names – check the brand / model websites to verify they are

genuine

Wrong country of origin - check the brand / model websites to verify they are genuine

Appraisers should also be mindful of whether the supplier businesses are genuine. A quote from a fictitious or invented company may demonstrate the following traits.


Simplistic layout of stationery, no logo

Standard font/simplistic stamp

Name of contact person not mentioned

A generic email account (yahoo, gmail, etc.)

Only mobile telephone number given

Telephone number not in country of establishment

No physical address, only P.O. box

Non-existent post-code or mismatch post-code/city

Company exists but does not trade in the area required

Anomalies in relation to the place / location of the applicant

Where issues are found, the Appraiser should use the following to help check the supplier

details are acceptable and document the findings within the appraisal.

Internet-search for the company concerned to ensure the company is operating and

not a sham or has been dissolved (e.g. Companies House and company Check

Look for Business websites

Check for plausibility of telephone numbers and address details

Google street view

Check if other businesses are established at same address

6. For the item, are there any links between the applicant and the preferred supplier? It is

expected that the suppliers will be independent from the applicant and their business.

When considering any possible links between the applicant and the supplier the Appraiser should bear in mind the guidance points below. Where any of these points are triggered, look into the detail more closely and document the checks which have been carried out to resolve the issue. Where the issue cannot be resolved, document the findings in the appraisal and refer the matter to the local RPA contact for further guidance.

Has the linked company already received EAFRD investment funding?

Is the equipment in the grant application required to complement equipment of

another project?

Is the same person involved in several linked companies?

Are the owners/managers of the supplier or applicant business spouses or family

members?

Are the employees of one company, owners/ managers of another company?

Are the same consultant/advisors involved in several EAFRD projects?

Are there identical or highly similar feasibility studies or business plans with other

projects?

Are companies giving each other guarantees for co-financing?

Are the same natural or legal persons shareholders of linked companies?

Does the owner/manager of one company have power of attorney for bank account of

another company?


If there are no links, what has been checked to confirm there are no concerns? Explain what information has been reviewed and print copies of any internet searches completed and save on the project file. If there are links, the applicant must have made an exceptional and justified case for why they are proposing to use a supplier that is in some way connected to them or their business and the Appraiser should clearly state why this is considered reasonable. If a justified case has not been made, remove the quote and use the quotes from the independent suppliers only. Follow the guidance above regarding less than 3 acceptable quotes. This may lead to the item becoming ineligible, depending on the acceptability of the other quotes. Where in exceptional cases it is proposed to accept the ‘connected’ supplier quote, discuss this with the local RPA contact to ensure a nationally consistent approach to handling this is taken.

7. It is expected that for every eligible cost included in a grant offer, it must be supported by

three eligible quotes.

Where only one or two satisfactory quotes have been provided and/or the explanation provided by the Applicant for this in the application is unclear or unsatisfactory, the Applicant should be asked in the first instance to submit an additional quote. If a third quote is not forthcoming or is still unacceptable, then the Appraiser should document the reasons why we do not have three acceptable quotes. Where the reasoning is unsatisfactory, the item should be removed from the grant. If the Appraiser proposes to support the item, the Appraiser must justify why the item is still being considered for grant aid without three eligible quotes and how the cost represents value for money. Evidence must also be on file to support and substantiate the assessment undertaken. The Appraiser must also alert the Decision Maker of the issue.

8. For the item, has the lowest quote been selected as the preferred supplier?

a. If no, has a more expensive quote been selected as the preferred supplier with sufficient justification provided? Is the justification acceptable and why?

b. Where insufficient justification is provided for choice of a more expensive supplier can the item remain as eligible expenditure but only to the value of the cheapest quote? What is the reasoning for this?

It is expected that the applicant should always select the lowest quote as the preferred supplier, to get best value on the market. Only in very exceptional circumstances should a higher quote be considered, and only where adequate and detailed justification is given by the applicant as to why the lowest quote has not been chosen. The Appraiser must review this and provide a full case for accepting a higher quote. If acceptable justification cannot be provided, the cost should be reduced to the value of the lowest quote. Important note: Reasons such as location of the supplier, having used a particular supplier in the past or inclusion of service or maintenance are NOT acceptable justifications for not using the lowest quote.

9. For the item, is the applicant proposing to purchase second hand equipment? Have they

provided the necessary evidence/information and confirm how this is satisfactory?


Where an applicant proposes to purchase a piece of second hand equipment, they should provide the following written confirmation and information from the supplier (as set out in the Applicant Handbook and Full Application guidance).

a) Original proof of purchase b) a declaration stating its origin and confirm that at no point during the previous seven

years has it been purchased with public funding c) Evidence the price of the equipment does not exceed the cost of similar new

equipment (comparable quotes) d) Confirmation it meets health and safety legislation e) Confirmation it has 5 years useful life remaining from the date of the final grant

payment.

If this information has not been received and cannot be clarified the quote should be removed from consideration for the grant. Please explain in the appraisal where issues have arisen with the quote and why the quote has been noted as unsatisfactory. Follow the guidance above regarding less than 3 acceptable quotes.

Use of QS valuations instead of quotes

10. Whilst we can accept QS reports completed by a qualified QS where there are appropriate reasons, there are points to bear in mind:

Prior to claim they will need to show that the tender process has been completed and at least three quotes/tenders received

The funding contract will need to set out costs as per QS report but subject to completion of the tender process

Eligible costs within the contract will be the maximum upon which grant can be claimed, i.e. they cannot go up once tenders are in – this is obviously for our budget management reasons;

In relation to the above the eligible cost can however come down. Post-tender and prior to grant claim the applicant will need to identify the chosen supplier and cost. Where this is not the cheapest, justification must be given.

How have concerns been addressed?

If there are any other concerns around the quotes and suppliers, what are they and how have they been addressed? Are offer letter conditions required? Can a grant be offered? If it is not possible to confirm value for money of the item and quote, the item should be removed as ineligible.


Do items need to be removed as ineligible?

Confirmation of Eligible Expenditure

On concluding the Costs & Quotes eligibility checks at A & B above, the Appraiser should confirm the eligible expenditure that they are recommending, Complete the Expenditure table


on the “Costs & Claims (contract)” tab (B27:M46) of form 009a). This is prepopulated with the application request, but the figures should be amended to reflect the Appraiser’s recommendation.

Any ineligible costs identified by either the applicant or the Appraiser, which are fundamental to the project proceeding are to be added to the Non-grant items table and considered as part of the wider funding package at D below.

In the Project Cost Summary table at the top of the page select appropriate budget sub-headings and over-type these in D6:D18 (options for 8 different sub-headings).

In B27:B46 select the appropriate budget sub-heading for each line of Expenditure, this will be summarised in the Project Cost Summary table, which can be copied and pasted into the appraisal form.

Does the removal of any ineligible expenditure profile reduce the eligible grant amount below the minimum threshold? Does the reduced amount still represent good value and leave a deliverable project? What is the justification for the recommendation?

For the costs proposed as ineligible and to be removed from the eligible expenditure profile, does this affect the funding package? – will a condition be required that on signature of the offer letter they must evidence sufficient funds to cover the full cost of these costs?

The outcome of the assessment of eligible costs, eligibility of quotes, fraud checks and confirmation of eligible expenditure must be recorded on DORA in the ‘Administrative Checks’ section. Detailed instructions are in section S - Appraisal Recommendation and QC/QA (Full Application) of the DORA User Manual.

6.7 Grant Amount, Grant rate and Project Funding

Complete the table provided at section 2.7 of the appraisal form with the project costs and grant amount detailed in the application. The appraiser’s commentary should confirm that the amount of grant requested and grant rates requested are appropriate and that a sufficient funding package is in place.

.

Record the recommendation in this table (E.g. based on the appraisal it may be necessary to recommend that a lower amount of grant is awarded).

6.7.1 Amount of grant requested and grant rate requested are appropriate

Once all the quotes have been assessed the Appraiser must also examine the requested grant and answer the following:

Has the applicant adequately explained how the grant request has been calculated and is this reasonable?

Does appraisal indicate that the appropriate grant and intervention rate has been requested both in terms of value for money and eligibility? If not why not?

The Appraiser can recommend a lower amount of grant or intervention rate. A clear explanation should be provided why this is being proposed.


If the Appraiser is recommending reduced grant from that requested the reasons for this must be clearly stated and consideration must be given to whether the private funding package will be able to absorb the increase in required private match.

Will a condition be required for the applicant to evidence that additional match has been sourced?

The grant should be calculated to the penny using exact figures from the quotes. Costs should not be rounded to the nearest pound.

The intervention rate should ideally be a whole number, e.g. 40%. If necessary, where the total eligible costs are reduced, the resulting grant rate may well need to be less than a whole number , then, the intervention rate can be calculated to 2 decimal places as a maximum, e.g. 25.16% although this should be avoided where at all possible.

The Appraiser must ensure that the recommended grant amount is less than or equal to the requested grant amount. The recommended grant amount must not exceed the requested amount.

It is a requirement that the final claim is a minimum of 15% of the total offer amount. Appraisers should ensure that the proposed claim schedule allows for this.

De minimis – To calculate the eligible grant amount where De minimis applies use the European Commission budget website for the current exchange rate:

http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm

6.7.2 Sufficient private funding package is in place.

If there are concerns around the funding package what are these concerns and how should these be addressed?:

Is there insufficient long term finance to cover the match?

Is there insufficient short term finance to bankroll the grant or cash flow the business? Can the applicant manage the grant being paid in arrears? Are there any issues to be aware of?

Are elements of the package not private match – another grant fund or public funding? Are they eligible?

Have the sources of match funding been confirmed and are they appropriate?

Are private funding agreements vague?


Can concerns be overcome by special conditions?

State clearly in this section:

what the application grant request is

what has been removed as ineligible and why

http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm


what the final recommended grant amount and intervention rate is and why

what match funding is in place and if additional funds will need to be found, how much.

6.8 Proposed Outputs and Milestones

Double check that the dates identified in tab six (‘Indicators and Milestones’) of the LEADER Full Application Appraisal Spreadsheet (form 009a) align with the dates provided for achieving project outputs in tab seven (‘RDP Outputs’).

Insert the ‘RDP Outputs’ table from tab seven of Form 009a into section 2.8 of the appraisal form.

Consider whether the outputs proposed by the applicant seem realistic and/or appropriate. If revised outputs are proposed by the Appraiser, this should be noted in the comments below the inserted table and captured in the project specific conditions.

6.9 Appraisal Score Summary

Complete the appraisal score summary on Full Appraisal Spreadsheet (form 009a) tab eight Score, based upon the detailed assessment conducted in section three of the appraisal.

Copy and paste the table into section 2.9 of the appraisal form.

6.10 Key Project Strengths

Provide a summary of key project strengths identified in the appraisal at section 2.10. This information may be presented in bullet point format.

6.11 Key Project Weaknesses

Provide a summary of key project weaknesses identified in the appraisal into section 2.11. This information may be presented in bullet point format.

6.12 Project Specific Conditions

List all the project specific conditions that have been identified during the appraisal in section 2.12.

Project specific conditions should be included in the grant offer letter to help address issues / concerns that have arisen.

Any recommended conditions must:

Be enforceable and legal; and

Reasonable; and

Build / enforce value for money; or

Reinforce eligibility requirements

All conditions should be presented in a standard format, starting ‘The Beneficiary shall’.


Each condition must identify the action; the evidence required and the date by which activity should be completed. Project specific conditions should be monitored and reported to the LAG and Accountable Body.

6.13 Appraisal Conclusion and Recommendation

At section 2.13 provide the overall recommendation for the project based on the appraisal. Choose one of the following recommendation categories:

Approve as per grant request subject to any special conditions; or

Approve at same grant rate but based on lower eligible costs; or

Approve at lower grant rate subject to any special conditions; or

Reject due to eligibility; or

Reject as a result of the full appraisal. In the rationale accompanying the recommendation comment on the following:

Whether the project could go ahead on its proposed scale, quality, timing without LEADER Programme funding;

The quality of outputs for the amount of grant invested to determine the additionality the LEADER Programme funding will deliver;

The deliverability of the project;

The soundness of the proposed financial package;

The recommended grant/costs in comparison to the grant/costs requested;

The timescales for the project and any differences between application and appraisal;

Whether this project represents good/best value for money;

Eligibility.

Once the Executive Summary has been completed, the Appraiser should add their detail to the ‘Appraisal, Quality Control and Decision: Recommendation and Signatures’ at the front of the form.

7 Scoring & Assessment

Before beginning the Scoring and Assessment of a project, the Appraiser should review the ‘Eligibility & Completeness check’ (form 008) completed by the Sponsor.

The Eligibility & Completeness form is used to ensure that all of the information required to complete a full appraisal assessment has been submitted by the applicant and that basic eligibility checks have been undertaken.


If the form is incomplete and/or information is missing from the project folder (and this has not been clearly noted with an appropriate explanation) the file should be returned to the Sponsor for completion.

Once the Appraiser is content that the Eligibility & Completeness form has been completed and the FA is eligible then they can proceed with the Appraisal of the FA.

7.1 Strategic Fit

Section 3.1 looks at how the project meets the strategic aims of the programme in two ways:

Fit with Local Priorities. How well the project delivers against one or more of the LEADER group’s priorities.

Jobs & Growth. The extent to which the project will contribute to jobs and/or growth within the LEADER area.

Each section should be appraised and scored individually.

7.1.1 Fit with Local LEADER Priorities

When assessing the fit with the priorities identified in the Local Development Strategy, please see response to the questions 7(a-c) and 8.1(a) of the FA form and use the scoring guidance overleaf.

In the comments consider the following:

If applicable - does the proposal fit the call for activity criteria?

Do the proposed activities contribute to the delivery of the Local Development Strategy? Identify which priorities?

Does the proposal fit with the LEADER Delivery Plan? Is there the budget available to fund the project?

Does the project compliment or duplicate other activities already taking place in the programme area?

Scoring Criteria Score

The activity proposed does not contribute to the priorities identified in the Local Development Strategy.

0

Recommend Rejection

There is poor fit with the priorities identified in the Local Development Strategy.

1


The activity proposed may contribute to the priorities identified in the Local Development Strategy.

2

The activity proposed contributes to the priorities identified in the Local Development Strategy, but requires further explanation as to how this will be achieved.

3

The proposed activity clearly contributes to delivery of the priorities identified in the Local Development Strategy.

4

7.1.2 Jobs & Growth

The increased focus on jobs and growth requires all LEADER projects to contribute to the local rural economy. When assessing the contribution the project makes towards the achievement of jobs and growth, please see responses to question 8.1(b) and 8.1(c) of the FA form and use the scoring guidance below.

In the comments at section 3.1.2 of the appraisal form consider the following:

Do the proposed activities contribute directly to the achievement of jobs/growth? (E.g. through the creation and development of a micro or small sized rural businesses).

Do the proposed activities make an indirect contribution? (E.g. by contributing to improving the local rural economy increasing visitors to a particular area or providing an essential rural service)


The project makes no attempt to articulate how it contributes to the jobs and growth agenda.

0

The project makes a poor/tenuous case for its contribution to the jobs and growth agenda and there is no evidence of indirect job or growth creation.

1

It is not overly clear how this project will deliver direct job creation and growth of the applicant business; however some attempt has been made to describe this.

The project does support indirect jobs and growth

2


It is clear how this project will deliver either direct job creation or growth of the applicant business.

3

The project will create both direct jobs and growth in the applicant business . 4

7.2 Need for the Project

7.2.1 Rationale for Funding Request & Deadweight

A primary consideration of the appraisal process is the rationale for intervention:

Why the project will not go ahead on its proposed scale, quality, timing etc. without grant intervention.

How will the project enhance economic outputs?

This area is notoriously weak in most applications and the analysis of funding options can be unconvincing. There should be a strong argument made which convinces the Appraiser that the need for LEADER funding is clear and that other options have been considered .

It is important to consider the reasonableness of the applicant’s explanation for why funding is required. This may not simply be in relation to a funding gap (where there are insufficient funds available to deliver the project), but could also take into account other considerations such as reducing the risk to the business, or enhancing the outputs and outcomes which will be achieved.

Whilst the applicant’s need for grant is an appropriate question to consider we can only look at this against the information made available to us - monies could be held under different names and accounts that are not connected to the project and that we are unaware of (not withstanding information made available on linked businesses).

Therefore the following four key questions that should feed into the appraisal of this section 3.2.1 relate to the rationale for grant investment and what would be delivered regardless of grant (deadweight).

Please see response to questions 8.2 (a-f) of the FA form.

WHICH alternative options available to the business have been considered and identified within the application? (For example, alternative project designs, funding packages, premises and location, timescales)

Provide a summary of the options analysis which has been carried out by the applicant.

Consider whether this is appropriate and proportionate for the project


Consider whether the quality of the options analysis is sufficient to justify preferred option selected.

HOW would the project progress differently without grant funding?

Would it not happen at all?

Would it happen but on a slower timescale?

Would it happen but on a reduced specification

Would it remain the same?

Is it clear that additional activity/outputs/results/benefits will be delivered with the grant funding?

WHY would the project progress differently without grant funding? Is a funding gap evidenced?

Applications should assess whether a funding gap exists to justify the request for grant funding..

Examples:

The proposal uses all private sector funds available to the applicant.

In this situation is there written confirmation from the bank that they are unwilling to loan further funds or that funds are subject to grant approval? Are there loan rejection letters?

The applicant has access to further private sector funds but identifies that there is too much risk with the project to merit private funding of 100%.

Is there clear professional advice from the accountant that they should not expose the business to further financial commitment to the project? Rather than a simple statement to their client does this provide a detailed financial analysis looking at areas such as liquidity and returns?

Further private sector funds are available to the business but are allocated to other projects/wider project costs that are ineligible for grant.

Has information been provided to evidence that these funds are already committed / needed or that the wider project costs are integral to the proposal?

Deadweight - how would the proposed direct outputs be affected without grant funding?

Deadweight’ refers to outcomes which would have occurred without intervention. The scale of deadweight can be estimated by assessing what would have happened to the project with varying levels of intervention.

The application should provide clear evidence as to how the outputs would change without grant funding. The scale of the differences should be assessed against the scale of the grant request and level of projected outputs with grant funding.


Example scenarios would be:

None of the projected outputs would be delivered;

Some of the projected outputs would be delivered over a longer timescale;

Some of the projected outputs would be delivered over the same/similar timescale;

All of the projected outputs would be delivered but over a longer timescale;

All of the projected outputs would be delivered over a similar timescale but commitments to business investment proposals outside of the proposal would be scaled back or shelved;

Use the assessment of these questions to write up the narrative to insert into section 3.2.1 of the FA Appraisal form 009 and then determine which is the most appropriate score.


The application identifies that the project would progress as proposed with or without grant funding (high deadweight).

0

Recommend Rejection

The rationale for the grant request is weak as information within the submission indicates that the applicant has sufficient funds available to cover the whole project as proposed and more than half the outputs would be delivered without grant funding.

1

How the project would be different in terms of timescale and/or scale without the requested level of grant funding is identified and around half the outputs would be delivered without grant funding (medium deadweight).

2

A funding gap is identified with a clear description of the impact made by the grant funding: How the project would be different in terms of timescale and/or scale without the requested level of grant funding is identified and less than half of the outputs would be delivered without the funding (low deadweight).

3

None or very few of the outputs would be delivered without the funding (no deadweight) because the applicant has clearly evidenced that either there is insufficient funds available to them or that the risk/return is such that the project is too risky to fund without grant or that repayment of loans at commercial rates would put the business at risk.

4


7.2.2 Understanding of Target Market

The appraisal should consider the applicants understanding of the market and customers they propose to sell their product or service to. Please see question 8.2 (e) and refer to supporting documentation provided with the FA form. Please note that applications for grant for projects which do not have a product or service to sell (eg Farm Productivity priorities a) and b)) should award a score of 2.5 as this criteria is not relevant to that type of project.


Does the application demonstrate a clear understanding of the direction and trends of the overall market in which their proposed product or service fits?

Has the applicant clearly defined the market failure / does the project address this?

Do they demonstrate understanding of different segments within their market?

Do they identify their current and target market - customer demographic, geography etc.?

Do they identify how their product will fit with this demographic – pricing strategy etc.?

Where the proposal involves expansion/alteration of an existing business have existing customers been surveyed and results used to inform the project design?


No evidence of market need is presented. 0

Some evidence for market need is presented but the size of the impact and the probability of achieving this impact is not considered or quantified.

The Applicant has attempted to describe its current and target markets; however, these are not clear in all areas of product, price category, geography and demographic.

Existing (or potential future) customers have not been surveyed.

1

The market need for the potential output is clearly stated.

The Applicant has provided a description of its current and target markets which is relatively clear by way of product, price category geography and demographic.

Existing (or potential future) customers have been surveyed but detail of the survey (questions, survey population etc.) is lacking or the quality of the survey is limited.

2

The Applicant has clearly defined the market need and how the proposed product fits within this market.

The Applicant has provided a description of its current and target markets which is quantified and realistic.

Existing (or potential future) customers have been surveyed and detail of the survey is provided and indicates a survey of sufficient quality by way of what has been

3


asked and who has been asked. Results of the survey are provided.

The proposal indicates understanding of the broader potential of the product in the longer term.

The Applicant has given a clear qualitative and quantitative assessment of the market need and how their product fits with this market need.

The Applicant has provided a description of its current and target markets which is realistic and has demonstrated a significant impact in the product/services offered or supported.

Existing (or potential future) customers have been surveyed and detail of the survey is provided and indicates a survey of sufficient quality by way of what has been asked and who has been asked. Results of the survey are provided and clearly accounted for within the project design.

The proposal indicates clear understanding of the broader potential of the product in the longer term

4

7.2.3 Proposed Design and/or Equipment

Appraise the rationale for the applicants proposed design/ and or equipment. Please see question 8.2 (d) and refer to supporting documentation provided with the FA form.


Is it clear that appropriate research has been undertaken into the proposed building design or equipment specification?

Does the proposed design/model build on evidence of best practice and what works most effectively for the target group?

Have research visits been undertaken to other businesses, has there been discussion with other businesses about what designs work and what don’t?

Have industry specific consultants been used in the specification design?

Have trade events been attended?

Are industry publications referred to?

For example - has a tourism project demonstrated consideration of layout for visitor flow?


No rationale for the proposed design or equipment is presented. 0

It is not clear why the proposed design or equipment has been identified as most appropriate to the project.

1


The application sets out clear reasons behind the choice of proposed design or equipment.

2

The application identifies alternative designs/equipment have been considered, identifies the reasons behind the choice and sets out the type and timing of research undertaken.

3

The application identifies and compares alternative designs/equipment, identifies the final reasons behind the choice.

The type and timing of research undertaken is identified together with information gleaned from the research and how this has informed the specification of the project.

4

7.3 Financial Performance

7.3.1 Solvency and Financial Performance of the Underlying Business

Where the project will be undertaken within an existing business the full (profit and loss, balance sheet and notes) underlying accounts for the last three years (or two years for grant requests below £35k) should be assessed alongside the full accounts of any linked businesses. If the applicant business is part of a Group of companies (where the applicant company may be a parent or a subsidiary) the consolidated Group accounts should be assessed. To complete section 3.3.1 the Appraiser will first need to complete the Full Appraisal Spreadsheet (form 009a) Accounts Analysis tab 3, using information from the applicant business accounts. Additional guidance is included on the spreadsheet to explain each of the sections and what trends to look for. The information in this spreadsheet will be used to answer the questions below. Print the completed spreadsheet and include it as an annexe to the completed appraisal. The Appraiser should assess the financial track record of the business considering how well the business has been managed and its sustainability. A business that has healthy finances will be in a stronger position to commit to and deliver a project. If the business is under financial pressure and this is the main driver for the project or the accounts indicate a large unaccounted for cash surplus, or there are issues identified with linked businesses this should be identified here. The appraiser is NOT assessing need for public funding in this section but the applicant’s financial capacity to deliver the project. Any queries identified in this section relating to the applicant’s finances and their grant request should be accounted for and assessed in Rationale for Grant Funding. The appraiser MUST consider the financial health of the underlying business and this should be done through use of the accounts assessment spreadsheet key financial ratios to enable consideration of the points set out below. The appraiser should review the full accounts


submitted, including the notes (usually at the back) and where provided, the report from the auditor or accountant given within the accounts (usually at the front). The results of ratios from the spreadsheet do not need to be inserted in the Appraisal but should be used as part of the appraiser’s assessment and comments. Within the assessment the Appraiser should address the following points: Turnover and profitability:

a) Is turnover growing or falling? Has the business explained any significant increase or decrease in turnover?

b) Is the business making a profit or a loss (before taxation)? c) How does the level of profit/loss in the latest/current year compare to previous years? d) Is the business making sufficient profit to cover the level of investment in the project? e) Is profitability improving or declining? Are there any obvious reasons for this trend? f) What is the level of grant requested as a % of turnover in the latest/current year? g) Are profit margins high or low? Improving or declining? h) Do drawings/Directors remunerations or dividends appear reasonable compared to the

level of profit /cash balances / size of investment in the project? Balance sheet and solvency/liquidity:

a) Does the business have a large amount of cash at bank or in hand? Has the business explained this?

b) Are there any transactions/loans with businesses related through common ownership? c) Does the business have an overdraft facility? Is it increasing or decreasing? What is the

level of overall borrowing with the business? d) What is the net worth of the business? Is it increasing or decreasing? e) Is the gearing ratio high or increasing? f) If the net worth of the business is negative (net liabilities) does this raise any concerns in

relation to delivery of the project or financial risk? The appraiser should draw a conclusion on the overall financial performance of the business and its capacity to bank roll the project during its delivery. For example, if the business is making a loss, how will this impact on the delivery of the project? Does the business have a substantial amount of external borrowing already in place? Does it have sufficient cash to cover its immediate outgoings through working capital? Does it appear to be financially sound? Does the financial risk of undertaking the project appear acceptable? Also comment on the status of the business:

a) Has the organisation recently changed ownership? b) Has the organisation recently changed its legal status e.g. partnership to limited

company? c) Has any change in the status of the business impacted upon the finances reflected in the

accounts? d) Has the applicant satisfactorily explained any changes to its legal status and identified

what, if any, impact this might have on their capacity to undertake the project?


Where the proposal is for a new business with less than three years of full business accounts, or a grant request of less than £35k) use the accounts that have been provided for one or two years of activity to assess this criteria and score accordingly. Where the proposal is for a new start up business and the applicant does not have full business accounts for the last three years, instead the applicant is expected to provide either:

draft accounts the latest tax returns management accounts or an opening statement from the applicant’s accountant that includes expected income and

operating expenses

Consider the capacity of the start-up business to deliver the project from the information provided and score the application using the most appropriate statement the matrix below which relate specifically on to new start-up businesses. From the information provided it will not be possible to enter the data into the Accounts tab of the Appraisal Spreadsheet. Instead review the information the applicant has provided to consider the financial situation of the applicant business, its assets, its income and expenditure (actual or proposed), its borrowings (actual or proposed) and draw a conclusion within the appraisal as to how well the information demonstrates the applicant’s financial capacity to deliver the project. Explain how the conclusion has been reached and what steps need to be put in place to assist the management and monitoring of the project. The appraisal will also need to carefully consider the capabilities and financial aptitude of the applicant in the ‘Deliverability’ section.


The applicant business has made a loss in all of the last three financial years (or two years for grants below £35k) AND The business has a negative balance sheet (net liabilities / negative assets) AND The financial risk is considered to be so high that it puts the project and business at substantial risk of failure. New start-up businesses only: The financial risk is considered to be so high that it puts the project and business at substantial risk of failure.

0

Recommend rejection

The business is either at breakeven or making a loss in the last one or two of three financial years (or one of the last two years from grant requests below £35k) , profits are not sufficient to cover re-investment, the balance sheet shows gradual erosion of the net worth and liquidity of the business is poor. As a consequence there is a high degree of financial risk presented to the proposed project. New start-up businesses only: The information provided is weak and insufficient to demonstrate how the project and business can be delivered successfully. The information presents a high degree of financial risk presented to the proposed project.

1


The business is profitable in at least two of the last three years (or one year out of last two years for grant requests below £35k) ; however this is only sufficient to cover reinvestment as measured by depreciation and drawings for the partners or salary and dividends for the directors. The balance sheet shows net worth increasing albeit only marginally. Liquidity of the business is limited but adequate. New start-up businesses only: The information provided is sufficient, although not detailed. It can be seen how the applicant intends to deliver the project and business with the given resources and the proposal appears acceptable. The information presents a medium degree of financial risk presented to the proposed project.

2

The business is showing a good level of profit over the last three years (or two years for grant requests below £35k) sufficient to cover depreciation and drawings and leave a surplus. Net worth is increasing. The accounts raise no concerns over liquidity. New start-up businesses only: The information provided clearly sets out the applicant’s current financial capacity and how the project and business will be delivered. The applicant explains its current financial position and its plans for the future. The information presents a low degree financial risk presented to the propose project.

3

The business is very profitable over the last three years (or two years for grant requests below £35k). Profits are sufficient to cover a sustainable level of reinvestment in the business and drawings leaving a healthy surplus. Net worth is increasing. Liquidity is very good. New start-up businesses only: The information provided is detailed and comprehensive and evidences the current financial position of the applicant. The application demonstrates that the applicant finances have been thoroughly considered in order to minimise risks to business and project delivery.

4

7.3.2 Demand Projections and Ability to Supply

Please see responses to questions 8.2 (d), 8.2 (e) 8.2 (f) 8.3 (f), 8.3 (g) and 8.3 (h) of the FA form.

The comments at section 3.3.2 should address the following:

Has the applicant clearly identified a demand?

This will largely relate to market demand for the proposed product/service:

Do the demand projections fit with the target market identified? For example is the size of their target demographic quantified through the use of local evidence bases?

How has the projected level of uptake been identified? For example has a farm shop looked at other shops serving a similar demographic in terms of average footfall and spend per customer?


Does the business have agreements with input suppliers in place /suitable negotiations underway? For example a food processor proposing a new locally branded meat product - do they have a sufficient number of farmers within the relevant ‘local’ geography producing to the right quality?

Does the business have forward orders / letters of intent?

Is there support from relevant organisations such as Tourism Partnerships if a tourism project?

Do demand projections correlate with financial projections

Has the applicant provided, where applicable, details of the marketing plan and proposed publicity for the project

Please note: for farm productivity projects please assign a notional score of 2.5 as the applicant is not asked to complete these questions on the full application form.


Demand projections are not quantified, indicators are not identified or are insufficiently explained and unclear

0

Demand projections conflict with the target market(s) information.

How the business will supply the demand projections is unclear.

There is limited information on how the applicant will address promotion, advertising and marketing, and it is considered that this is a relevant requirement of the project. The marketing channels have not been clearly defined.

1

Demand projections are quantified and explained at headline level but lack detail. For example, it is not possible to identify whether seasonal fluctuations are accounted for and where peaks and troughs in demand appear.

Demand projections align with the target market(s) identified.

Ability to supply to the headline figures are identified.

The applicant has briefly discussed the current marketing activity of the business (or planned activity for new businesses) but this is not clearly related to this project.

Brief indication is given that there is a marketing plan, but the nature of the publicity to be carried out is not fully explained and supporting information and timescales are not detailed. Roles, activities and timescales have not been defined.

2

Demand projections are quantified, explained and broken down into appropriate sub headings and across appropriate timescales. The applicants have accounted for seasonal and product specific fluctuations.

Demand projections align with the target market(s) identified in section7.2.2 above.

It is clear that the applicants have considered how the business will supply increasing and fluctuating demand.

3


Current business marketing activities (or planned activity for new businesses) are discussed, demonstrating its impact and how it is also appropriate for this project. Publicity for the project outcome is explained, with timescales for activity proposed.

It is indicated that success of marketing activity will be monitored, reviewed and altered as necessary. Details of the roles and activities that members of the team will be responsible for are provided.

Demand projections are quantified, explained and broken down into appropriate sub headings and across appropriate timescales. The applicants have clearly accounted for seasonal and product specific fluctuations.

Demand projections align with the target market(s) identified in section 7.2.2 above.

It is clear that the applicants have considered how the business will supply increasing and fluctuating demand and a good relationship with existing and/or proposed suppliers is demonstrated.

Current marketing activity of the business (or planned marketing activities for new businesses) is discussed along with explanations as to how this has developed over time having measured the success of the marketing carried out. Current marketing channels are explained with analysis of which of these are appropriate for this project. Publicity for the project outcome is clearly and fully explained, with realistic and achievable timescales for activity proposed. It is clear how the marketing activity will be monitored and how this information will be used to develop and increase the effectiveness of the marketing activity.

4

7.3.3 Financial Projections

Applicants need to supply monthly cash flow projections covering the project development period (LEADER Full Application Form Annexes 006a, Annex A and narrative at question 8.3) of the FA form) and the Appraiser will need to consider these to determine whether the business has sufficient capacity to cash flow the project. Even a project which is not generating any revenue should consider how they will cover the costs of the project development until the grant is reclaimed. Any concerns relating to insufficient cash flow should also be dealt with in project costs and funding package.

Projects will also need to supply financial projections following the financial year of the business for the period three years following the completion of the project.

The assumptions used in preparing the financial forecasts should be appropriate and detailed and relate to the market research and identified market opportunity. The Appraiser needs to take a view as to how realistic the forecasts for the growth of the business are both in light of the overall economic climate prevailing and the likely prospects for the sector in which the project is positioned.


No information on the assumptions used in the financial forecasts is given so 0


no confidence in the robustness of the financial projections.

Little information on the assumptions used in the financial forecasts is given. The forecasts are not supported by /contradict the market research and market demand information.

(If applicable), there is no discussion of sustainability of revenue costs.

1

Key financial assumptions are given along with some reasoning as to how they have been arrived at.

Other assumptions are not detailed and therefore it is not clear how robust the financial forecasts are.

The assumptions used are supported by the market research and market demand information in the application.

The overall forecasts appear feasible and there is some confidence in the robustness of the financial projections.

(If applicable), indication that ongoing revenue costs will be covered by the business, but only limited detail given.

2

Key financial assumptions are given along with detailed and sound reasoning as to how they have been arrived at.

Other assumptions are detailed and it is clear how robust the financial forecasts are.


Financial projections appear both robust and achievable.

There is some discussion on sensitivity analysis and conclusions given.

(If applicable), There is discussion on how any revenue costs will be sustained after the period of funding.

3

Key financial assumptions are given along with detailed and sound reasoning as to how they have been arrived at.

Other assumptions are detailed and it is clear that the financial forecasts are robust.


Financial projections appear achievable.

There is detailed discussion on sensitivity analysis with additional forecasts submitted and conclusions given which support both the request for grant and the viability of the project at reduced output from the project.

(If applicable), there is clear and concise discussion supported with evidence on how any revenue costs will be sustained after the period of funding.

4


7.4 Value for money and impact of the project on other businesses

Section 3.4 of the FA Appraisal Form 009 considers whether the project represents value for money is terms of the outputs achieved per £ of grant. It also considers potential displacement effects.

The application should provide a breakdown of output targets in accordance with the guidance provided in the Outline Application endorsement letter.

Answer the following two questions:

Are the outputs and milestones specific, measurable, achievable, realistic and time-specific (SMART)?

Have accurate baseline figures been given for the outputs proposed which illustrate the growth intended?

Fill out the Outputs and Indicators and Milestones tables in the Full Application Appraisal Spreadsheet (form 009a) using the answers given in questions 8.4 (f) and 8.4 (g) in the FA form and Tab C (outputs) on Form 006a which is completed by the applicant , setting out the outputs to be delivered, the intended start and end dates, intermediate milestones and reporting dates.

7.4.1 Jobs (and associated Skill levels)

When assessing the degree to which the project contributes to the jobs and skill level within the LEADER area it may be helpful to consider the following:

Does the proposal create new jobs?

What is the quality (or skill level) of the jobs being created by the project?

What is the approach of the business to training and development?

Do the dates for the creation of the jobs appear realistic and achievable?

Please see responses to question 8.4 (f) and 8.4 (g) of the FA form and the FA Annex.

Please note that if the project will not create any new jobs then this section should be scored a zero.


The jobs created by the project are not clearly defined, and there is no indication of the quality of these jobs.

0

Where the number of jobs created is defined the project appears to create a lower number of jobs than for similar projects.

1

The jobs created by the project are clearly defined.

The number and skill level of the jobs is similar to those for other projects in this theme.

The grant cost per job created appears high compared to other projects and

2


against the benchmark of £25k of grant per FTE .


The number and skill level of the jobs is similar to those for other projects in this theme or may be more in number and / or of a higher average skill level. The grant per FTE job created is similar to that of other projects and around the benchmark of £25k of grant per FTE job created.

3


The number and / or skill level of the jobs is higher than those for other projects in this theme.

The grant cost per FTE job created is below that for similar projects and less than £25k.

4

7.4.2 Other Direct Outputs

Projects should clearly demonstrate outcomes and outputs. Appraisers should assess the number, quality and level of the other direct outputs from the project and where available refer to the value of these compared to similar theme projects. Examples of other direct outputs might be increase in turnover, increase in production of juice, woodchip, day visitors, overnight stays etc.

In determining whether outputs are direct or not , Appraisers should consider whether the outputs are results of activities that can be clearly stated or measured and which relate in some way to the outcomes desired Those outputs we wish to include as targets within funding contracts should be appraised in this section. Targets should be SMART:

Specific;

Measurable;

Achievable;

Realistic ; and

Time-bound.

Appraisers should assess how the outputs have been calculated and if this has been explained satisfactorily.

When reviewing the outputs, verify the baseline situation so that outputs as a result of the project can be measured.


Outputs from the project are not clear or do not appear appropriate to the scale and activity of the project (either too few or too many).

0


Outputs are defined; however, there is no or little evidence to support them. 1

Outputs from the project are clear and appear appropriate to the scale and activity of the project.

The declared outputs are supported by information in the application.

The outputs are limited and grant cost per output unit appears high compared to other projects.

2

Outputs from the project are clearly defined and information in the application supports that they are appropriate to the scale and activity of the project.


The number and grant cost per output unit is similar to other projects.

3

Outputs from the project are clearly defined and information in the application supports and evidences that they are appropriate to the scale and activity of the project.


The number of outputs is above that for similar projects.

The grant cost per output unit is below that for similar projects

4

7.4.3 Wider Outcomes

Many projects will have wider outcomes/ multiplier effects, delivering indirect outputs and benefits to the rural/local economy or relevant economic sector. Whilst these cannot be measured directly and monitored as part of the project outputs, the Appraiser should assess the level of wider outcomes and multiplier benefits created by the project.

Multiplier effects - further economic activity (jobs, expenditure or income) associated with additional local income, local supplier purchases and longer-term development effects as a result of increased investment.

Example wider outcomes to consider include informal collaboration (formal collaboration should be a direct output) and innovation.

An example multiplier effect may be job creation within a business that will benefit from increased demand by the applicant business. In this situation they may have provided written support that this project will benefit their business and lead to xxx new jobs, however, we are not contracting with this business and should not therefore consider this job creation as a direct output.

Wider benefits should not be included in a Grant Funding Agreement Letter as an output within the Outputs and Milestones table. The Appraiser may wish to request a short report or other appropriate evidence to explain the wider benefits achieved and provide meaningful and useful monitoring data. A request for information to demonstrate the achievement of a wider benefit should be as a Project Specific Condition within the Grant Funding Agreement and must be clear, time specific and achievable.



No wider outcome or multiplier benefits are declared for the project 0

Wider outcomes or multiplier benefits are not clearly defined or considered and do not appear to be of high value.

1

Wider outcomes and / or multiplier benefits are declared and these appear appropriate to the project.

Number and type are similar to other projects for this theme.

2

Wider outcomes and / or multiplier benefits are declared and there is discussion justifying how these are appropriate in scale and value to the project.

Number and type are considered to be above those for other projects for this theme.

3

Wider outcomes and / or multiplier benefits are declared and there is discussion justifying how these are appropriate in scale and value to the project.

Number and type are considered to be well above those for other projects for this theme and there is some evidence/ support for these, for example, the increase in orders to a business supplying into the project will provide further job creation and turnover in that business

4

7.4.4 Competition and Displacement

All appraisals must assess displacement, regardless of the size or type of project. Displacement is the degree to which an activity promoted by government policy (in this case grant aid) is offset by reductions in activity elsewhere. A modest degree of displacement may be acceptable, but more substantial displacement may constitute grounds to refuse an application for assistance where for example, a proposal appears likely to succeed largely by diverting business from other firms or service providers locally. The ability to confidently attribute displacement to the intervention is a crucial issue as providing assistance may result in a legal challenge by competitors whose businesses are threatened. Thus it is generally important to identify the potential for displacement and assess its impact. The assessment should focus on displacement within the source area – initially the LAG or LEP area but equally valid would be the consideration at the regional level. If there are likely to be important displacement effects elsewhere in the UK, these should also be identified and appraised.


Displacement may occur in the product, service or factor markets in which the applicant operates. For example, in a product or service market, assisting a firm to develop its business may cause a reduction in the business of other companies in the same sector; or development of community facilities may lead to a reduction in the use of other similar facilities in the surrounding area. This is unlikely to occur in sectors where demand outstrips supply such increasing the offer around food products, but it may do in terms of the market responding latterly, to demand for products such as wood-fuel when supply locally is close to capacity.

Also displacement could be at input supply level where the business that has applied to us for grant aid could take such a high degree of input as to impact on other business by reducing ready availability of supply, potentially increasing the cost of that material to other businesses for them to maintain current output levels. Therefore the impact of increased demand created by the new project, on price of raw materials is an important consideration.

Displacement in the Labour Market A single RDP investment may not have the potential to create displacement in the labour market however where the investment is in a sector that is dependent on a specific skill set, our intervention could lead to displacement in other parts of the sector.

Substitution is a particular form of displacement in the labour market which may need to be considered in exceptional cases. It is the extent to which those who gain from a policy do so at the expense of an equivalent loss to others in the labour market. This may occur when a firm substitutes one activity for another similar activity to take advantage of government assistance. For example, if an incentive is given to employ long term unemployed workers, then a firm may substitute an applicant who is in long term unemployment for another applicant who is not, leading to no overall increase in employment. Some substitution may be acceptable when the totality of a proposal is taken into account. In some cases it may even be desirable. Taking the previous example, redistribution of jobs may contribute to a specific policy aim, such as getting more of the long-term unemployed to work.

Appraisal assessment

Address the following series of questions to gain a clearer picture of the potential displacement impact the project will have on other local businesses in the sector and whether there is a need to consider the national level impact on the sector or the impact of supplies to the sector.

Appraisers must answer each question set out in the table below, assessing and checking the information received from the Applicant. Please see response to question 8.4 (a) in the Full Application form. Explain the checks undertaken to verify this information as part of the Appraisal.

Appraisers should also:

Make use of own/team local/national knowledge of the area and associated businesses to act as a quick check on whether the most obvious facts have been identified in the application.

Use any known specialist skills/knowledge in the wider LAG and including database checks for previous funds awarded to similar projects in the area of influence.


Check any independent support submitted with application to demonstrate need for the service/product and whether this reasonable.

Carry out a simple internet search to confirm the information provided by the applicant is thorough, reasonable, accurate and covers an appropriate radius.

The Appraiser should test the information provided by the Applicant, using the tools identified above to draw a conclusion as to whether the information given in the Application satisfactorily supports the Applicant’s statement on displacement. Any research undertaken should be referenced in the appraisal, e.g. a website link, and where appropriate also printed and saved to the project file and annexed to the appraisal. The appraisal must explain the checks undertaken to verify the information provided by the Applicant and explain the conclusion that has been drawn as to the risk of displacement from the project.

1. Who are the applicant's competitors within the locale, the region and nationally?

Are there other firms producing similar products, or other voluntary groups or community service providers producing similar facilities/services?

2. Is the market growing, shrinking or stable; and what share of the business is the applicant likely to take?

Will the investment lead to a net reduction in activity for those others described above?

3. Is the applicant's proposal likely to have a significant impact on the business of competitors?

Will it damage the competitors’ viability or threaten closure?

As above, the impact of the investment may be that competitors operating in the same market lose business as a result and subsequently impact on their ability to continue in business at their current level.

4. Are there likely to be any important displacement effects elsewhere in the UK?

There may be no local impact with only one or two similar businesses of this scale in the UK however the impact on demand for raw materials or specialist labour could lead to additional costs for competitors or impede their ability to maintain their market nationally.

A consideration of the likely national impact is important particularly where there are limitations on materials and other specialist inputs to the business.

5. What is the position with capacity in the market currently?

Is there excess capacity in the market already and is that in a form where it is likely to persist – such as specialist structural arrangements around supply for existing activity or where there is infrastructure investment limited to the activity.

6. Will the investment lead to an Where output rises to between 40 and 100% of


increase in market output that is significant?

Is the share of the market to be served by the project greater than would otherwise have been served by other existing suppliers combined?

current output without any clear indication that it will be met by a corresponding increase in demand. It is likely to have a significant impact where there are other businesses undertaking this activity or supplying this particular market.

7. Is the capacity that will be displaced as a result of this new project, relatively new or already more efficient?

We need to consider recent investment elsewhere that led to a step change in capacity, which is still current best practice or new technology.

A. Expressing the Displacement Impact

Once the questions above have been answered, consider the impact of displacement using the scoring matrix at the bottom of the Displacement section guidance. Consider displacement impact at each geographic area level: ‘Local’ Up to local authority level given most Rural LA areas are large but the county

influence is still a market driver, particularly in terms of destination management. ‘RDD Area’ Such as SW, NE etc. ‘National’ England or where relevant, wider UK with careful consideration of the impact of

investment in close proximity to Scotland and Wales also. There may be no impact locally as there is currently no activity of this nature locally but at the national or regional level it could lead to a high level of displacement. This has been defined as:- Higher impacts or the considerations/recommendation of rejection will occur where there is an increasing impact of displacement on the number of firms impacted or increasing extent of impact across larger geographies. The following example tries to combine the impact of displacement in terms of business and geography. Propose an overall displacement impact rating / score for the project. Explain how the conclusion has been reached. Example: £900k Investment in Charlie’s Milk Drying Unit Pine Tree Farm Milk Drying Unit is a £2.5m investment seeking £900k of RDP funding. It is the only one of its kind in the north of England. The applicant has evidenced high local market demand for this investment given that there is one other plant in the country – in Hampshire that currently takes 50% of the identified potential capacity. It is anticipated that the new plant will lead to 20% of the customers currently supplying the Hampshire plant moving to Pine Tree, leading to a reduction in business equivalent to 40% of the available market. However given the capacity evidenced by Pine Tree, and the evidence that the Hampshire plant plan a new investment in their capability within 3 years, there is a strong likelihood that there is enough medium to long term business for both to meet demand.


Working through the guide below, this example would score highly for having no local or regional impact but because there would be a national impact as a result of the investment albeit short term, the overall score should be medium. B. Final Recommendation

The table beneath indicates where if the risk of displacement is too great, where the project should be considered or recommended for rejection. Appraisers must follow this matrix when drawing conclusions and explain their rationale for the conclusion that has been drawn in this section.

Description of Displacement Impact

Finding of the Appraiser

At the Local Level (within LAG Area)

At the Regional Level (within RPA Area)

At the National Level (England)

‘None’ No other firms or demand will be affected by the intervention

Low Impact/High Scoring



‘Low’ There are expected to be some displacement effects as a result of the intervention, although only to a limited extent


Medium Impact/Medium Scoring


‘Medium’ Approximately half of the activity could be displaced by the intervention


High Impact/Low Scoring

High Impact/Low Scoring

‘High’ A high level of displacement is expected to arise as a result of the intervention

High Impact /Low Scoring Consider Rejection


Very High Impact /Low Scoring Recommend Rejection

‘Complete Displacement’

All activity will be displaced as a result of this intervention. For example the relocation of activity with no new net benefits.




Considerations at Assessment 1. What in fact, would have occurred without the expenditure?


2. Will happen with the minimum grant aid that we could offer? Consider the displacement impact and the multiplier effect of the investment.

3. What will happen if we offer in full, the grant aid requested? Again, consider the displacement impact and the multiplier effect of the investment.

4. What is the difference between 1 and 2 above and between 2 and 3 above?


(Reflecting Level of Displacement)

It is clear that the project focuses on diversion of customers from existing businesses, it has not identified a gap in market provision, a growing market or additional customer spend that it will meet. From the checks undertaken, the project is likely to have a complete or near complete displacement as a result of the intervention, or all activity will be displaced as a result of this project.

0 (Complete

Displacement, with automatic reject

recommendation)

Limited attempts have been made to assess the competition within the market. The applicant has provided very limited evidence to justify statements made. And/or It is highly likely that the project focuses on diversion of customers from existing businesses, no gap in market provision, a growing market or additional customer spend has been identified by the business. The applicant understands the market but how and why their own offer will generate new/different custom is not substantiated or proven. Very limited evidence has been provided by the applicant to support their case. From the checks undertaken, the project is likely to displace a high percentage of activity in the market as a result of the intervention. Reflecting a high displacement impact.

1 (High)

It is clear that the applicant understands who their competitors are, what their offer is but how and why their own offer will generate new/different custom is not substantiated or proven. Limited evidence has been provided by the applicant to support their case. From the checks undertaken, the project is likely to displace approximately half of the activity in the market as a result of the intervention. Reflecting a medium displacement impact.

2 (Medium)

It is clear that the applicant understands who their competitors are, what their offer is and why their own offer largely depends on new custom to the market. Market surveys have been undertaken in relation to the proposal and

3 (Low Impact)


indicate a gap in market provision. From the checks undertaken, there are expected to be some displacement effects as a result of the intervention, although only to a limited extent. A low displacement impact.

It is clear that the applicant understands who their competitors are, what their offer is and why the viability of their own offer largely depends on new custom to the market. Market surveys have been undertaken in relation to the proposal and indicate a gap in market provision. Analysis of survey results has been completed, quantifies the gap in provision and supports a market gap at least equal to the level of demand to which the project is intended to supply. Key competitors have been contacted and any concerns raised within responses dealt with in the design of the proposal and /or support from key competitors is provided. From the checks undertaken, there are no other businesses or demand that will be affected by the intervention that would represent a displacement impact.

4 (No Impact)

7.4.5 Gross Value Added

Whilst GVA is not calculated at the Appraisal stage it may be an output which is required to be captured after the project has completed. This will depend on the type of project and whether the grant is leading to the growth of the business. Therefore the appraiser needs to consider whether GVA is an appropriate output, as a condition requiring the applicant to submit accounts after completion of the project may be required.

What is Gross Value Added (GVA)?

Gross Added Value is the chosen method of measuring the increase in economic activity of projects. Under the UK National Accounts, GVA is defined as: `the value generated by any unit engaged in production (of goods and services)...’ It is measured at basic prices, i.e. it excludes taxes on products (such as Value Added Tax).

Step 1: In the Full Application Appraisal Spreadsheet (form 009a) there is the GVA calculation template to complete.

Step 2: Insert the requested data into the yellow shaded boxes only (further guidance below).

Step 3: Record the resulting GVA figures in this section of the appraisal form with appraisal comments.


The Required Data Input

The template requires data input relating to two sets of information that should have been submitted with the application:

the historic accounts of the applicant business covering the last three years or two years for grant requests below £35k (this does not apply to start ups); and

The financial projections for the first three years following project completion.

The main components of the calculation are:

gross profit (i.e. sales/turnover minus direct /variable costs/ costs of sales and direct labour costs); and

direct labour costs (costs of those people who are directly making the product, providing the service)

Full-time equivalents (FTEs), one FTE defined in the Full Application Handbook as a minimum 30 hours per week. Any part time jobs should be expressed as a proportion of a FTE, e.g. 2 full time employees and one employee covering 15 hours a week equates to 2.5 FTE. If submitted historic accounts provide FTE figures use these for the last three years (or two years for grant requests below £35k); otherwise assume “Current Year” FTE figure applies to the most recent annual accounts.

The calculation relating to projections also requires the input of indirect costs aka fixed costs as well as other and exceptional items. The latter two (other and exceptional) may by their very nature include a wide range of costs. If such costs are included, an assessment should be made on a case-by-case basis as to whether they should be entered into the spreadsheet and therefore subtracted from the calculation of GVA. Please seek advice from a financial specialist if there is any uncertainty.

Calculation Results for GVA and GVA per FTE

Once the requested data has been inputted the template will automatically show the trend in GVA for the business overall and the increase in GVA per employee. Appraisers should make comment against both the change in GVA for the business and per employee.

Care should be taken in interpreting the Year 1 GVA change if there is a time gap between the most recent historic accounts and the start date of the Year 1 projection (for example, if data for the business’s current financial year has not been provided). The Appraiser’s comments on GVA should take account of the completion date of the project, and where possible the period when the full financial benefit of the project is achieved.

Historic accounting data will be taken from the applicant’s Profit and Loss Account, which has been drawn up on an accruals basis. The applicant’s financial projections are on a cash basis, and so there is the potential for a mismatch in the way GVA is being calculated. However, it is anticipated that the effect on the trend in GVA and GVA per head will not be significant. Please seek specialist advice if the spreadsheet outputs appear unusual.

Comparative data is not currently available by industry sector (Standard Industry Classification code), but if this becomes available comment should be make against the industry average GVA per employee and forecast percentage increase in GVA per employee.


7.5 Project Sustainability

Section 3.5 should take account of the applicant’s answers to the application form questions relating to project impacts on different equality groups (ethnicity, age, gender, disability) and the sustainability and environmental impacts.

7.5.1 Environmental Sustainability and Equality and Diversity Impacts

It is a requirement of the LEADER Programme for all projects to consider and address the cross cutting themes of environmental sustainability, and equality and diversity. See responses to questions at 8.5 of the FA form.

Comment on the following points:

Have all relevant environmental sustainability requirements been considered and are they reflected in the design and delivery of the project?

Is it easy to understand the environmental impacts associated with the project?

Is there a clear explanation as to how any negative environmental impacts will be avoided or minimised and is this realistic?

If the project intends to deliver any environmental indicators, are these in line with the LEADER Programme requirements and are the activities clearly defined, viable and measurable?

Consider how well the proposal meets the equality and diversity cross-cutting theme requirements to ensure that the project does not disadvantage anybody in terms of the protected characteristics under the Equality Act 2010 (ethnicity, race, age, gender, sexual orientation, gender reassignment, pregnancy & maternity, marital status or disability), and comment on the following points:

Have all relevant equality impacts been considered and are they reflected in the design and delivery of the project?

Is there a clear description of who will benefit from the project? Is this supported by any data/research?

Has an equality policy (where applicable to the business) been supplied and has the likely impact of the project on particular groups been identified?

Have appropriate steps been taken to address the likely adverse impact or encourage positive promotion?


No consideration has been given to environmental sustainability equality and diversity issues without explanation why they are not applicable to the project.

0

The points proposed very limited/brief and/or are not clearly defined or explained, or

One of the themes has been considered, but there is limited explanation /

1


exploration of the points listed. The other theme has not been considered.

Project Specific Conditions will be required to address the gaps in information.

Some consideration given to each of the cross cutting themes which appears relevant to the project but with few/limited points considered. Some but limited explanation/exploration of the points made but some awareness shown in relation to the project. Weaknesses might be addressed with Project Specific Conditions.

Or

One of the themes has been considered with some points raised and an element of discussion exploring how the points have been identified and addressed within the project and will be managed/mitigated. There is discussion of how one of the themes has been addressed within the project design. The other theme has been briefly considered with limited explanation / exploration. Weaknesses will need to be addressed with Project Specific Conditions.

No reference to research or evidence to support the case.

No future targets/objectives considered.

2

Cross cutting themes for both themes have been addressed with several points considered for each theme. There is discussion around the point exploring how they have been identified, addressed within the project and will be managed/mitigated. There is discussion of how the themes have been addressed within the project design.

Some reference to research/evidence is made but this is not fully explained/explored. Some future targets for action have been outlined, but these require more consideration to be SMART and fully deliverable objectives.

3

Both cross cutting themes have been fully considered with detailed discussion around their relevance to the project and how they have been incorporated within the project design. The application explains how any issues have/will be managed and mitigated. The discussion includes reference to evidence and research completed and/or the project includes SMART future targets/objectives for delivery.

4

7.5.2 Exit Strategy, Future Delivery, Monitoring and Evaluation

This section is not scored, however Appraisers will need to consider and comment on the following (refer to questions 8.5 (g) and of the FA form):

Has the applicant explained how the business will continue to deliver and improve its service/provision after the grant funding ends?

Has an exit plan been identified?


Has the applicant demonstrated how the project will continue the project objectives after the end of grant funding?

Has the applicant explained their monitoring and/or evaluation plan and timescales?

Does the information appear reasonable and deliverable?

Are any issues identified?

Are any project specific conditions related to this topic required

7.6 Delivery Approach

7.6.1 Project Delivery

Section 3.6.1 of the appraisal form assess the project management systems to be used and whether project roles and responsibilities have been assigned (see response to question 8.6 (a) of the FA Form). Successful delivery of the project will allow the business to develop in line with the milestones indicated. Therefore the project delivery team needs to be suitably experienced with delivery of the type of project being undertaken.

The successful operation of the project will depend on the day to day operation of the business and the people making up the ongoing business delivery team. Therefore the team responsible for the day to day management and operation of the business should have the skills and experience to make the business a success and achieve the forecast outputs and outcomes indicated in the application.

Where the applicant does not have a track record and experience of the delivery of this type of project they should demonstrate that use of a team with the appropriate experience and the means of managing the team will deliver the project on time.

For projects involving a new start up business strong consideration should be given to the capabilities and financial aptitude of the applicant.

For those few projects where there is a small amount of revenue support, the sustainability of the activity once the funding ceases should be clear.

Assess and comment on each of the points below:

Timescales

Is it clear how the project will operate over its lifetime?

Is the timetable of activities and milestones realistic?

Is the timetable for grant claims realistic?

Project Team

Is there a project-management track record to manage this sort of project during project development and post project implementation?


Is the project management structure and processes sufficient to demonstrate the project has capacity to meet the grant requirements?

Are there enough resources committed to the project?

Does the management team have clearly identified roles or not?

Have existing staff been identified appropriately within the project team and has the recruitment plan for new staff been explained?

Does the project team have the appropriate resources, expertise, skills, responsibility and experience?

Is the application consultant or applicant led – if the former is there any obvious risk that the applicant is not clear about what the consultant is proposing?

Recording and reporting

Has the applicant adequately demonstrated how they will calculate and verify outputs and ensure an audit trail is in place for them?

Has the applicant demonstrated that satisfactory financial management and control procedures are or will be in place for the project, including the process for compiling and authorising grant claims and who will be responsible for this?

Has the applicant adequately described the systems to be used and processes for filing key documents, checking and verifying invoices/payments and maintaining the financial audit trail?

Reliability of the applicant

Refer back to the key checks relating to the reliability of the applicant with reference to any previous co-financed operations undertaken since 2007. Please refer back to the Eligibility and Pre Appraisal Checks completed on the application and comment on any concerns.

New start businesses

Have all the points above have been fully addressed?

Are the systems and processes that have been set up appropriate and relevant?

Has the applicant sought and secured expertise and resources where they are lacking relevant knowledge, skills and experience?

Has the applicant demonstrated their capabilities and financial aptitude to deliver this project successfully?


There are critical concerns about the Applicant’s ability to deliver the project. 0


There are major concerns about the Applicant’s ability to deliver the project. For example:

The applicant has limited experience of delivery, the scale of the project is beyond this experience and no appropriate experience is to be brought in.

The application does not clearly explain who will be involved in the delivery of the project and how the resources and inputs will be managed.

There is a lack of clarity on the permissions and licences required for the project which are critical to the project going ahead as planned.

One or more of the business principles has a history of disqualification as a Director or insolvency and the application raises concerns that this history may have a negative impact on this project that cannot be overcome through contract conditions.

The applicant has limited experience of business management including associated financial management and the scale of the new business is beyond this experience.

The application does not clearly explain who will be involved in the day to day management of the business, and how the resources including staff and inputs will be managed.

1

There are some concerns about the ability of the Applicant to deliver the project. For instance:

The Applicant has some good experience of similar projects, or has some experience of smaller projects and has identified that additional resource and help will be required but there is limited information on the proposed ongoing management of the project and how it will be delivered to timescales and budget.

Key members of the project management team are identified and some indication of relevant skills and experience given but training of some staff may be required and this is not discussed in detail.

There is recognition of the necessary licences and permissions, but limited discussion and / or lack of clarity on when these will be obtained.

One or more of the business principles has a history of disqualification as a Director or insolvency but the application identifies how the circumstances surrounding this history have / will be overcome.

2

There are some limited minor concerns about the applicant ability to deliver the project. For example:

The Applicant has some experience of smaller projects and has sourced and secured additional resource and help.

Evidence that the necessary licences and permissions are not yet in place but they have been applied for .

The applicant has good experience of this type of business, including associated

3


financial management and it is clear that whilst challenging the proposal is within their capability, or

There is a timetable for the recruiting of new staff and the introduction of new resources to achieve the outputs and outcomes, although some detail is lacking.

Training requirements over the short term are identified and discussed.

There are no concerns about the Applicant’s ability to deliver the project. For example:

The applicant has good experience of similar projects including associated financial management and it is clear that the project is well within their capability.

Key members of the project management team (if applicable) are identified and are in place and detail of relevant skills and experience given.

The members of the project delivery team have worked together in the past and a formal structure such as regular site meeting is proposed and timetabled as part of the project delivery to ensure the progress of the project against timescales and budgets.

All licences and permissions are in place or full and reasoned explanation as to how these will be granted as the project progresses.

A clear understanding of the people, skills and resources required to achieve the outputs and outcomes is evident in the application.

Training and other staff development activities are identified and there is clear ongoing commitment to staff development to the benefit of the business.

4

7.7 Risk

7.7.1 Risk Assessment

Assess how well the applicant has considered and identified appropriate risks and issues associated with the project and how they propose to manage or mitigate them. See responses to questions at 8.9 of the FA form.

Applicants are required to identify the risks involved in the development of the project and ongoing business success and identify appropriate mitigation of these risks. This should inform the overall business plan and help to ensure the success of the project and ongoing business activity.


No information on the risks to the project is provided. 0


Some information on the risks to the project has been provided, however this is very weak and there is no real analysis. Mitigation has not been considered.

1

Risks are identified and there is some discussion of the potential impact of these risks. Some discussion on mitigation, but lacking detail and clarity.

2

Risks are identified along with clear discussion of the potential impact of these risks.

There is discussion of mitigation which is clear and appropriate with some discussion of appropriate options.

Supporting evidence is submitted showing the process used to identify risks.

3

Risks are identified, categorised and ranked.

Mitigation is clear, concise and appropriate to the risks identified.

Good supporting documentation and information showing approach to and process of identifying and mitigating the risks to the project.

4

Documents

LEADER Programme Full Application Appraisal · PDF fileLEADER Programme Full Application Appraisal Guidance . ... 5.4 LAG Decision Making Group ... Confirmation of Eligible Expenditure