The economic impact of LEADER in England

7/29/2019 The economic impact of LEADER in England

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The economic impact of LEADER in England

Gary Bosworth, Ivan Annibal, Terry Carroll,

Liz Price, Jessica Sellick & John Shepherd

Regional Science Association, Cambridge August 20th -22nd, 2013


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Focus for Research

The analysis focuses on the extent to which

LEADER has enabled activity that would

otherwise not have been possible and the

scale of resultant local multiplier effects.

(A separate paper at the European Rural Sociologyconference considered governance and wider rural

development objectives)


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The LEADER

Philosophy


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1

LEADER I (199193)

217 LAGs,442m budget

Confined to objective 1 areas

Pilot programme themed around area partnership networking

2

LEADER II (199499)

906 LAGs (21 in England),1,755m budget

Extended to include Objective 5b areas

Measures available: skills, innovation and transnational co-operation

3

LEADER+ (200006) 893 LAGs, rising to 1,143 in 2004 (25 in England),2,105m budget

Extended to any rural areas

Structured around 3 actions heavily focused on innovative pilot schemes and both local andtransnational networking and cooperation

4

LEADER Approach (2007-13)

LEADER is mainstreamed within the overall EU rural development policy 2,308 LAGS (64 in England),5,500m funding from within the overall rural development

finances received by member states under EAFRD


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Rural enterprise support needs

Rural enterprises can be more resilient (Anderson et al 2010), have higher

growth rates (Keble and Tyler 1995) and support wider communitywellbeing (Bosworth 2012)

Agarwal et al. (2009) discovered that higher productivity in rural firms

depended largely upon three sets of factors: enterprise and investment;

accessibility and road structure; skills and education.

Broadly speaking, these make up innovative capacity (Stephens andPartridge, 2011, p458), which tends to be stronger in more urban areas,

and is seen to be critical for the success of entrepreneurship programmes.

All endogenous in nature highlighting the need for locally-based

interventions regional economies cannot be manipulated by

interventions that assume the same drivers will lead to the same

outcomes in different areas (Kitson et al. 2004)


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Delivering micro-enterprise support Lower population and business densities in rural areas make it more

expensive to deliver business and training support than to comparableurban firms (Bennett and Errington, 1995; Smallbone et al, 2003).

However, if the aims of intervention take into account non-economic

outcomes, approaches such as LEADER become more potent.

Previous evaluations of LEADER have indicated that Value for Money in

terms of business support has been relatively low (Ekosgen, 2010) and jobcreation rates were modest (Ekosgen, 2011).

On the positive side, reports emphasised the importance of LEADER in

diversifying farm enterprises (Carnegie UK, 2010), supporting new value

chains (Metis et al., 2010) and providing community facilities (Ekosgen,

2010).

Furthermore, the deadweight was much lower than the government

benchmarks indicated that a lot of projects were supported that would not

otherwise have happened (Ekosgen, 2011).


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Rural Entrepreneurship characteristics

Risk takingfinancial, social, uninsurable

Innovation including creativity and

technology adoption

Perceptiveness alertness to opportunities

and the vision to make them happen

Personal motivation independence, drive,profit orientation, social motive?



Methodology

A review of literature and other LEADERevaluations

Questionnaire sent to a range of rural

stakeholders - generating 549 responses Interviews with a combined total of 83 key

stakeholders and beneficiaries in selected LAGs

Two workshops to test our findings with keypersonnel in LEADER policy and delivery roles.



Typology of LAGs

The basic criteria for sampling case study LAGs comprise:(a) topography

(b) RDPE Axes and Measures

(c) the proportion of programme budget spent

With the detailed boundaries for the LAG areas this was also

the first time that other data could be mapped at this level

this included population, rural settlement, IMD 2010, state of

the economy (JSA data etc) and economic structure basedupon IDBR data.



Solway

Cumbria

Shropshire

WorcestershireHerefordshire

East Cornwall

Clay Country

West Cornwall

North Lincolnshire

Coastal Action Zone

Lindsey Action Zone

Wash Fens

Northumberland Uplands

North Pennine Dales

West Kent

Kent Downs and Marshes

Surrey Hill



Summary of findings LEADER is arguably unique in terms of the diversity of projects funded and

impacts:

- Recruiting and developing volunteers, often exceeding contractual targets

- Job creation in microenterprises and public sector organisations, again withmany having already created or expecting to create more jobs than contracted.

- Funding in the tourism sector helps to overcome seasonal unemployment

- Building valuable connections within the local economy, including schools,

policy organisations and wider local communities- Facilitating innovative partnerships and business models

- Restoration of old/redundant buildings

- Investing in environmental friendly methods

- Supporting the rural visitor economy

- Providing skills, training and apprenticeships Each of beneficiaries also recognised that they either would not have been able

to deliver the project or that it would have been on a smaller scale or takenconsiderably longer without the support that they received.


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Beneficiaries views on LEADER

Microenterprise

Public Sector/

Community

Group

Social

EnterpriseMEAN

LAG Support 4.91 4.60 5.00 4.84

Forms 3.82 3.20 3.75 3.59

Overall Process 4.05 2.65 3.00 3.23


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Attitudes and motivation

Ive always been anti-grant, thought it was a waste

of taxpayers money going to the wrong people Itwas a lot of effort for the amount of money but Iwould do it again

It is a learning process it can be challenging for a

creative thinking entrepreneur

Morale boostingsomeone cares about smallbusinesses

Where entrepreneurs did consider funding, therewas often a trade off between the value of the grantand the time invested in applying.


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Awareness of LEADER Application and communication methods vary between LAGs

Many beneficiaries became aware through existing policy networks or direct

approaches from the LEADER team, this arguably made it more difficult for

businesses to gain access.

- We have a good relation with *the District Council+, the economicdevelopment side at leastshe told us about it and started it off (countrypark, Lincolnshire)

- We were referred on to LEADER through other links with the Council(community shop, Herefordshire)

- Mr A was aware of the Leader programme and was/is a member of theWest Kent LAG (farmers joint venture, Kent)

- I had previously approached the Leader staff at Cornwall Development

Company about something else, and kept in touch with them. Theyapproached me to see if we had a project (pottery, Cornwall)

In Kent, a range of sources including the Produce in Kent organisation, land

agents, farmer networks and the National Trust were all mentioned


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Larger scale example - Lakeland Eggs

Good practice on animal welfare

Energy generation They will be carbon neutral by the end of the year.They plant trees for chickens to roam in, and also use them for wood chip

Education will have delivered 400-500 training days from a target of 80

days

Local food supply chain working with 50 farms in Cumbria out of 3-4,000

Without LEADER funding, we would have been a good egg factory but not

leading edge. They have won two national business awards for business

innovation and business in the community and as a result people want to

be seen to be working with them.

Were being noticed because we do things differently

Innovations include marketing and communications e.g. trace your egg,

robotic packing, solar power, rainwater harvesting, geothermal heating

Their scale of packing supports local farmers to access national suppliers


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Innovation

Collaboration raised credibility and profile overseas which in

turn raised confidence and aspirations (Lavender growers) Wood-fuel cluster

Showcase for new technology

Transformed a Charitable Trust (with village hall mentality)

into a financially viable limited company. Needed a robustbusiness plan and support for staff/volunteers to adapt to the

demands of operating a modern and versatile public facility

in a competitive commercial environment

New community enterprises and alternative business modelssupported to become sustainable


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Perceptiveness

Engaging in LEADER raises opportunity evaluation and

business planning skills . Its not simple or straightforward but it made you think in a

positive way edifying and educational

A farm shop operator rethought the whole business

strategy...confidence to employ a new full time member ofstaff...now has new plans for green energy production on the

farm

Building business networks including public sector

organisations raises exposure to new opportunities May be self-selecting of perceptive business owners though?


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Economic impacts The grants were instrumental...it is unlikely that other sources of

funding would have been so flexible or supportive Weve taken on 2 new staff who work 4 days a week. Before, we had

to use freelancers and apprentices. We couldnt have done thisproject without Leader funding...weve needed the extension for acouple of years and just couldnt fund it...it would have taken us much

longer to get the finance in place, another couple of years at least. You get more value in rural areas creating one or two jobs makes a

difference whereas that money wouldve been lost in a bigger town

Volunteering and training raise human capital in the local economyand often contracted targets are exceeded

These may not be examples of large-scale risk taking, but bringingforward development during recession and making a difference inlocal communities are significant impacts from the programme anddo we really want risky entrepreneurship in smaller rural economies?


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Barriers to success

Delays in the system one applicant became ineligible as theygrew beyond 10 FTEs during the application process

Trade off between time to apply and comply vs financial

income. Especially challenging for those not familiar with

public sector methods and jargon

Arrears payments

Evaluation does not capture all of the value, especially value

generated beyond the funding period.

Displacement effects e.g. too many microbreweries funded The need for 3 quotes


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Concluding thoughts

Awareness of LEADER among businesses is patchy

While LEADER funding has made a difference to many microenterprises, itoften brought forward planned developments rather than stimulating new

activity but once engaged, new opportunities emerged and business

outlooks changed.

Impact is small in terms of jobs created and GVA but it can make a

significant difference to very local areas.

The administrative burden is off-putting for many businesses, especially if

they are unfamiliar with grants and policy processes.

Where rigorously enforced, specific rules also created problems for

beneficiaries. More efforts should be taken to generate local multipliers and avoid

displacement effects


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Thank you

any

questions?

The report can be downloaded

from Defras website:

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Documents

The economic impact of LEADER in England