AXIS 3 & AXIS 4 OF THE
RURAL DEVELOPMENT PLAN FOR
WALES 2007 - 2013
PROJECT APPLICATION GUIDANCE
Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
1.
GENERAL INFORMATION
Local Partnerships and Local Action Groups (LAGs) should only submit a project
application for successful projects following the Expression of Interest (EOI)
stage of the bidding process. Applications received by the Welsh Assembly
Government for any other project will be rejected.
If a project was successful at the EOI stage, Local Partnerships and LAGs have
been awarded with an agreement in principle. An agreement in principle does
not commit the Welsh Assembly Government to provide any funding to the Local
Partnership or LAG. Project Funding Letters will be issued to Local Partnerships
for projects that are successful at this stage of application process. Any
expenditure incurred by the Local Partnership or LAG before the date of a Project
Funding Letter will not be eligible for support under Axis 3 or Axis 4.
Local Partnerships should also be aware that no advance payments of Axis 3
funding will be made by the Welsh Assembly Government. LAGs requiring
advance payments under Axis 4 should have contacted the Welsh Assembly
Government prior to submitting their Business Plan to discuss their requirements.
Applications for advance payments under Axis 4 can not be considered by the
Welsh Assembly Government during the project application assessment.
Project applications are subject to a competitive bidding process as laid down in
Council Regulation (EC) No 1698/2005.
Local Partnerships and LAGs should submit completed project
applications in hard copy and electronically, by the 3rd September 2010.
Hard copies should be posted to:
Rural Programmes Team
Welsh Assembly Government
Third Floor
Ladywell House
Newtown
Powys
SY16 1JB
Electronic copies should be emailed to:
ruralprogrammes@wales.gsi.gov.uk
The Welsh Assembly Government will assess the project applications over the
period 6th September 2010 to 23rd November 2010. The Minister for Rural Affairs
will be notified of successful projects by 30 th November 2010. Project Funding
Letters will be issued to Local Partnerships and LAGs by 28th February 2011.
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Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
The project application will be assessed for the following (as required by the
control and governance regulations of CAP):








Reliability of the applicant
Eligibility of expenditure
Reasonableness of costs proposed
Specific project requirements e.g. permissions and consents
State Aid
Match Funding
Procurement
Outputs & Results
This document provides guidance to Local Partnerships and LAGs on the
requirements above and on how to complete the application form.
The Rural Relationship Managers working in the Rural Programmes Team of the
Welsh Assembly Government will provide advice and support to Local Partnerships
when completing their project application:
Local Authority Area
Anglesey
Carmarthenshire
Conwy
Denbighshire
Flintshire
Gwynedd
Ceredigion
Monmouthshire
Neath Port Talbot
Pembrokeshire
Swansea
Torfaen
Merthyr Tydfil
Powys
Wrexham
Bridgend
Caerphilly
Vale of Glamorgan
Contact Details
Buddug Turner
Welsh Assembly Government
Ladywell House, Newtown,
Powys, SY16 1JB
Tel: 01686 613310
Email: buddug.turner@wales.gsi.gov.uk
Ana Laing
Welsh Assembly Government
Rhodfa Padarn, Llanbadarn Fawr,
Aberystywth, SY23 3UR
Tel: 0300 062 2403
Email: ana.laing@wales.gsi.gov.uk
Elaine Jones
Welsh Assembly Government
Ladywell House, Newtown,
Powys, SY16 1JB
Tel: 01686 613356
Email: elaine.jones1@wales.gsi.gov.uk
Tracey Jones
Welsh Assembly Government
Ladywell House, Newtown,
Powys, SY16 1JB
Tel: 01686 613124
Email: tracey.jones3@wales.gsi.gov.uk
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Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
2.
ELIGIBILITY OF EXPENDITURE
As allowed by paragraph 2 of Article 71 of Council Regulation 1698/2005 (as
amended), expenditure is eligible for Axis 3 or Axis 4 support, if it has been
incurred on activities described in the EOI and project applications, and approved
by the Welsh Assembly Government.
In addition, Paragraph 3 of Article 71 states that:
‘The rules on eligibility of expenditure shall be set at national level, subject to
special conditions laid down by this Regulation for certain rural development
measures’
The Welsh Assembly Government has developed the following eligibility rules for
expenditure incurred on Axis 3 or Axis 4 projects. Where appropriate, the rules
are consistent with the Wales National Rules on Eligibility of Expenditure for the
2007 – 2013 Structural Funds Programme. This is to assist with consistency
across the European Programmes delivered in Wales.
2.1
ELIGIBLE PERIOD
Expenditure is eligible under Business Plan 2 if it has been actually incurred and
paid out between 1st March 2011 and 31st December 2013 on activities described
in the EOI and project application, and approved by the Welsh Assembly
Government.
All expenditure incurred prior to the date of a Project Funding Letter will be
considered ineligible.
2.3
VALUE ADDED TAX
Value Added Tax (VAT) which is recoverable, by whatever means, is ineligible,
even if it is not actually recovered by the Local Partnership or LAG. Nonrecoverable VAT can be included in the project application as an eligible cost.
Some activity under Axis 3 or Axis 4 may be for community benefit and not for
commercial gain. Despite being registered for VAT, organisations implementing
activities for community benefit can not recover VAT costs from HMRC; the costs
can be included in the project application as an eligible cost.
The Local Partnerships and LAGs will be required to supply confirmation that any
VAT costs claimed during implementation of the project are non-recoverable.
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Project Application Guidance
2.4
CAPITAL AND REVENUE EXPENDITURE
Project costs may include capital and revenue expenditure or a combination of
both. For administrative purposes project costs must be divided into capital and
revenue expenditure by financial year at application stage.
Capital expenditure is defined as:

Expenditure incurred on purchasing, constructing or improving assets. An
asset is an item that’s value will not depreciate to nil within 12 months of
purchase, and which is not intended to be sold before the end of its useful
life.
Revenue expenditure is defined as:

Expenditure related to implementing the project which results in the
provision of goods and/or services, or which directly provides support to
the end beneficiary.
The following section identifies types of project costs which could be included as
eligible expenditure, if incurred on Axis 3 or Axis 4 activities. This list is not
exhaustive.
2.4.1 CAPITAL PROJECT COSTS
Preliminary Expenditure
Preliminary expenditure for capital projects may include expenditure such as the
costs of site investigation works, site surveys, environmental appraisals, cost
benefit analysis, feasibility studies, project design, preparation of tender
documents and procurement. Local Partnerships and LAGs must provide a
rationale for the basis of costs in the application form. The costs must be
incurred during the approved project period i.e. from the start date to the end
date as per the Project Funding Letter issued to the Local Partnership or LAG.
Professional Fees
Professional fees, including project management and supervision costs, are
eligible. Fees for external consultants are eligible, where it can be demonstrated
that they have been incurred as a result of a procurement exercise or where best
value can be demonstrated. Local Partnerships and LAGs must provide a
rationale for the basis of costs in the application form. Fees that have been
subject to an approved tender process should be included at the market rate
resulting from that exercise, provided the exercise was undertaken in the
previous 3 years.
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Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
Purchase of Land and Property
The purchase of land and property is an eligible cost of implementing an Axis 3
or Axis 4 project, provided that:

the land or property value applied for as eligible costs does not represent
more than 10% of the total eligible cost of the project ‘in exceptional and
duly justified cases, a higher percentage can be fixed for operations
concerning environmental conservation’;

the land is not for the purposes of agriculture, forestry or fisheries;

there is be direct link with the objectives of the project;

a certificate from an independent qualified valuer or duly authorised official
body confirms that the purchase price does not exceed the market value;

property purchased should not have received, within the previous 5 years,
a national or EU grant which would result in a duplication of grant aid
Environmental conservation projects
For environmental conservation projects the land costs are not limited to 10% of
the total eligible expenditure. However the following conditions apply:

there must be direct link between the land purchase and the objectives of
the project;

where land costs exceed 10% of the total eligible expenditure, the cost will
need to be agreed by the Welsh Assembly Government;

the land will be used for the purposes intended by the project application
for a time determined by the Welsh Assembly Government;

a certificate from an independent qualified valuer or duly authorised official
body confirms that the purchase price does not exceed the market value;

the land must be not for the purposes of agriculture, forestry or fisheries;
Site Preparation
Eligible expenditure can include site investigation, site clearance and site
servicing including preliminaries as detailed in the Bill of Quantities. Site
decontamination can be funded where it forms an essential part of a wider project
delivering an eligible economic benefit. Local Partnerships and LAGs must
provide a rationale for the basis of costs in the application form.
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Project Application Guidance
Contract Works
Eligible expenditure can include execution of the building contract, internal
services, environmental works, specialist treatments, security provision and
signage including acknowledgement of the Axis 3 or Axis 4 contribution to the
project. The inclusion of contingency sums in building contracts will be subject to
a detailed assessment by the Welsh Assembly Government. Local Partnerships
and LAGs must provide a rationale for the basis of costs in the application form.
Purchase of Equipment
The purchase of equipment is eligible providing that there is a clear link with the
delivery of the project. In the case of moveable equipment there must be an
assurance that the equipment is for the sole use of the project. Local
Partnerships and LAGs must provide a rationale for the basis of costs in the
application form.
Local Partnerships and LAGs must ensure that equipment purchased with Axis 3
or Axis 4 funding, whether owned by the Local Partnership or LAG or owned by a
3rd party, is properly safeguarded. Equipment must be used for the purposes
intended by the application for a minimum of 5 years from the date of the final
payment, or 5 years from the date of the Project Funding Letter, whichever is the
later. All equipment must be properly procured.
In cases where items of equipment have been purchased with Axis 3 or Axis 4
funding, an inventory must be retained for audit purposes.
Equipment with an asset life of less than one year can be regarded as revenue
cost (see revenue definition on page 4).
Discounts given on the purchase of items of equipment cannot be included
as levered funding.
Purchase of Second-Hand Equipment
The purchase cost of second-hand equipment is eligible provided that:

the item has not previously been purchased with the aid of national or
European grants;

the price of the equipment does not exceed its market value and is less
than the cost of similar new equipment; and

the equipment is technically appropriate and complies with any relevant
legislation (e.g. health and safety).
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Project Application Guidance
The calculation of the eligible expenditure relating to the purchase of secondhand equipment should be based on its current value.
Second-hand equipment with an asset life of less than one year can be regarded
as revenue cost (see revenue definition on page 4).
Local Partnerships and LAGs must provide a rationale for the basis of costs in
the application form.
2.4.2 REVENUE PROJECT COSTS
Salary Costs
Staffing costs are eligible for personnel directly engaged in project delivery,
whether full or part time. Local Partnerships and LAGs must provide a rationale
for the basis of costs in the application form. Staff costs include gross salary,
employers’ national insurance contributions and may include employers’ pension
costs where there is an established pension scheme which applies to all staff.
Reasonable costs arising from the contract of employment including expected
increases in grade or pay scales can be included as eligible costs in the
application.
Staff costs of personnel engaged in delivery of the Axis 3 or Axis 4 project and
other activities delivered by the Local Partnership and LAGs should be calculated
using an appropriate apportionment method.
The example below is to assist Local Partnerships and LAGs when completing
their application only. Local Partnerships and LAGs should identify the most
appropriate method of apportioning the staff costs and provide a rationale for the
basis of the costs in the application form.
Example - Staff Time
This method calculates the cost of a member of staff that is involved in the
delivery of more than one project/programme.
This example calculates the cost of a full time staff member who has 21 days
annual leave and works 8 hours a day.
Total salary for the year is £20,000 (including employers NI contributions &
superannuation or pension costs for the project period).
Total eligible project hours are 30hrs/week for 10 weeks:
5 working days x 52 weeks
Less Leave
260
(21)
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Project Application Guidance
Less Public Holidays
Total working days =
(8)
231 days
231 days x 8 hours a day
1,848 hrs
£20,000 divided by 1,848 hours
£10.82/hr
30hrs x 10 weeks
300 hrs
300 x £10.82
£3,246
Core-funded posts in an organisation are not eligible and should not be
included – unless the core funding is to be used as levered funding, in
which case there should be a letter of secondment to the project, and a
finite term for the secondment should be defined in line with the delivery of
the project. This will then be an actual cost in the project and must be
evidenced accordingly.
Staff recruitment costs may be eligible.
Relocation expenditure may be considered eligible expenditure where they are
evidenced and reasonable in the opinion of Welsh Assembly Government.
Sick or Maternity Pay
Sick or maternity pay may be eligible if it is in line with the organisation’s staff
policy or contained within the individual’s contract of employment. Statutory sick
pay or statutory maternity pay recovered from HMRC, even if it is not actually
recovered by the Local Partnership or LAG, is ineligible. The value should be off
set against the value of staff costs applied for. Local Partnerships and LAGs
must provide a rationale for the basis of costs in the application form.
Costs relating to the provision of temporary staff to cover for staff on long-term
sick leave or maternity leave during implementation, may be considered eligible
project costs, however, no additional Axis 3 or Axis 4 funding will be provided by
the Welsh Assembly Government. These costs will be considered on a case by
case basis by the Welsh Assembly Government through the project amendment
process.
Redundancy Expenditure
Redundancy expenditure may be considered eligible where there is a
requirement to pay under Employment Law. Local Partnerships and LAGs must
provide a rationale for the basis of costs in the application form.
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Project Application Guidance
Travel & Subsistence Costs
Travel & Subsistence costs can be considered eligible where they relate only to
the delivery of the project and are considered reasonable by the Welsh Assembly
Government. Local Partnerships and LAGs must provide a rationale for the basis
of costs in the application form.
Daily allowances and accommodation costs will need to be in line with the
employing organisation’s standard policy in respect of subsistence. The Welsh
Assembly Government will consider these costs during the project assessment to
ensure reasonableness.
Mileage rates should be in line with the statutory rates set by the Approved
Mileage Allowance Payments Scheme1 – these rates can be accessed via the
following hyperlink:

Use of vehicle: mileage rates from 6 April 2002 –
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47702.htm
Staff Training Costs
The cost of staff training in connection with project activity can be included in the
application, although it is expected that all organisations who submit an
application are in a position to deliver the project. Staff training costs for training
that relates to the acquisition of specialist knowledge to enable them to effectively
deliver the Axis 3 or Axis 4 project should only be applied for. The cost of
providing a provision of training for staff personnel development is ineligible.
Local Partnerships and LAGs must provide a rationale for the basis of costs in
the application form.
Staff Bonuses & Incentives:

The following are ineligible:
o
o
o
o
o
o

Tax-free bonus payments or other allowances
Golden handshakes
Exceptional or extraordinary provision of pension rights
Bonus payments
Loans
Company cars
The following are eligible where they are taxable:
o Childcare or crèche payments
1
This is consistent with Structural Funds
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Project Application Guidance
Professional/Consultancy Fees and Sub-Contractors Charges
Expenditure for work carried out by a consultant or sub-contractor is eligible if the
work is essential to the delivery of the project and the costs are, in the Welsh
Assembly Government’s opinion, reasonable. Local Partnerships and LAGs
must provide a rationale for the basis of costs in the application form. Where
consultancy fees and contractors charges have been subject to an approved
tender process, the market rate resulting from that exercise may be included in
the application provided the original tender is no more than 3 years old.
Consultancy fees could include legal, technical, accountancy and audit services
which are required for the delivery of the project.
All consultancy fees and sub-contractors costs must be properly procured in
accordance with good practice and relevant procurement rules and regulations.
Information and Communication Technology
Expenditure on ICT (including hardware, software, website costs, licences,
support, and consumables) may be eligible where it can be demonstrated that its
use is required for the effective delivery of the Axis 3 or Axis 4 project.
Overheads
Overheads borne by the Local Partnerships or LAGs in the delivery of a project
are eligible expenditure.
In order to calculate overheads Local Partnerships and LAGs must identify which
costs may specifically relate to the delivery of the project from the list below:












Rent
Rates
Stationery/Printing/Postage
Telephone/Fax/Internet Connections
Heat/Light/Water
Photocopying Costs
Office Furniture
Office Refreshments
Room Hire/Catering
Office Repairs & Maintenance (inc. cleaning)
Insurance2
Mobile Phone Costs
2
Insurance of buildings, contents and for public indemnity are eligible provided it can be clearly demonstrated that these
are directly related to the delivery of the project
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Project Application Guidance
Local Partnerships and LAGs should then apportion the costs identified from the
list above between the Axis 3 or Axis 4 project and other activities of the Local
Partnership and LAG through an appropriate method. The use of notional
charges or applying a standard or general apportionment rate is not permissible.
The apportionment methods used should be appropriate to the type of
expenditure e.g. rent, rates, heat/light/water costs could be calculated by
apportioning the actual bills by the area/space occupied by the project.
The examples of apportionment methods below are to assist Local Partnerships
and LAGs when completing their application only. Local Partnerships and LAGs
should identify the most appropriate method of the apportioning the costs listed
above and provide a rationale for the basis of the costs in the application form.
Examples of calculations:
Overheads
Stationery
Photocopier
Overhead Costs in period
Total area/workspace
Cost of stationery in period
Total No. of staff
Cost of Photocopier in
period
Total copies in period
X
Area occupied by eligible
RDP project Staff
X
No. of eligible RDP project
Staff
X
No. of eligible RDP project
Copies
Apportionment Methodology Example:
Area/Workspace
If a project has exclusive use of the space/area the invoice relates to, the cost
can be allocated to the project in full.
The examples below demonstrate calculations for the apportionment of overhead
costs for the delivery of more than one project/programme over a given period.
Example 1
Calculate the cost of heating for the workspace/area used by project A1 which
equates to 2,000sq ft out of a total of 10,000sq ft. in the building/office. Heating
Invoice net figure £5,000
Project space of 2,000 divided by total space of 10,000 x 100 =
Total to allocate to project A1=
20% of cost
£1,000
Example 2
Calculate the cost of heating for the workspace/area used by project A2 which
equates to 2,000sq ft out of a total of 10,000sq ft. in the building/office. The
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Project Application Guidance
project utilises the space for 9 weeks out of the 12 weeks invoiced. Heating
Invoice net figure £5,000
9 weeks divided by total 12 weeks x 100 =
The project utilised 20% of the work space for 75% of the time
20% x 75% =
Total to allocate to project A2 =
75%
15% of cost
£750
Marketing and Promotion
Eligible expenditure can include costs related to appropriate and proportionate
aspects of marketing specific to a project on, for example, design and production
of marketing materials, facilitation of appropriate conferences and seminars, and
targeted advertising campaigns.
Expenditure related to the EU requirements to effectively publicise and provide
information on projects and Programmes is eligible.
Project Evaluation Fees
Costs for independent project evaluations will be eligible if the work is essential to
the project and / or a condition of grant
Leasing
Expenditure incurred in relation to leasing is eligible providing the following
criteria are met:

The use of the equipment, premises or land relates directly to, and is
necessary for, the delivery of the project,

The Local Partnership or LAG provides a cost benefit analysis for leasing
the asset as opposed to purchasing the asset;

The maximum amount eligible shall not exceed the market value of the
asset leased;

For land and property leasing, a lease agreement signed by both parties,
whose term exceeds the project end date by a minimum of 5 years is
supplied at application3;

For land and property leasing, land or property is not for the purposes of
agriculture, forestry or fisheries;
3
This is to ensure that the land/property can be used for the purposes intended by the project application for a minimum
of 5 years after the end of the project
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Project Application Guidance

Where the leasing contract exceeds the project timeframe, only the
proportion of the lease relating to the timescale of the project is eligible;

Costs connected with the leasing contract, including tax, lessor’s margin,
interest refinancing costs, overheads, service charges and insurance
charges are not eligible expenditure;

Where the leasing expenditure does not relate exclusively to the Axis 3 or
Axis 4 funded project, costs must be apportioned appropriately.
Participants/Beneficiary Travel & Subsistence Costs
Participant/Beneficiary travel costs directly related to, and essential for, the
effective delivery of the project may be eligible.
Participant/Beneficiary costs for caring for children or other dependents
Costs for caring for participants/beneficiary's, who are essential for the delivery of
the project, children/dependants while the participant/beneficiary is involved in
the project may be eligible.
3.
INELIGIBLE EXPENDITURE
The following costs are agreed as being ineligible for support under Axis 3 or
Axis 4:
This list is not exhaustive and will be refined from time to time.

Costs incurred by a project prior to the date of the project funding letter

interest on debt (other than expenditure on interest subsidies to reduce the
cost of borrowing for businesses under an approved State Aid scheme)

bank charges on accounts (except where it is necessary to set up a
separate account(s) for the project where the cost for opening and
administering the account(s) is eligible)

costs of guarantees provided by a bank or other financial institution

charges for financial transactions, foreign exchange commissions and
losses, and other purely financial expenses

loan charges

interest or service charges – arising on leases and hire purchase
arrangements
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Project Application Guidance
4.

costs resulting from the deferral of payments to creditors

costs involved in winding up a company

bad debts arising from loans to employees, proprietors, partners, directors,
guarantors or shareholders

fines, financial penalties and expenses of litigation

staff costs that are not directly attributable to project delivery

training that is mandatory under statutory provision

payment for gifts and donations

entertainment costs

repairs and maintenance unless directly related to project delivery

stand alone civic sculpture

stand alone car parks

stand alone costs of works being carried out as a statutory requirement

notional costs

payments for activity of a direct political nature

dividends for shareholders

costs incurred by individuals in setting up and contributing towards private
pension schemes, or the setting up of such schemes by organisations in
receipt of structural funds

payments for unfunded pensions

discounts
LEVERED FUNDING
The maximum Axis 3 or Axis 4 contribution will be 80% of the total eligible project
costs. Local Partnerships and LAGs must secure the remaining 20% against
individual projects.
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Project Application Guidance
Levered Funding can be cash or in kind contributions from the public, private or
third sectors.
In kind contributions are services, items or products donated to the project by an
individual or organisation where no cash transaction took place. All in kind
contributions must relate to the delivery of a project (further guidance on in kind
levered funding is provided on page 17).
For administrative purposes, public, private and third sectors are as follows:
Public sector
These include any organisations which are part of, or under the control of, central
or local government. This includes:

the Welsh Assembly Government;

Local Authorities;

the public education sector (including higher and further education);

Assembly Government Sponsored Bodies;

UK Government Departments and their Agencies;

any not-for-profit companies set up by a part of local or central
government for the purposes of delivering a part of their services or
exercising their powers;

companies which involve partnership between the public sector (e.g. Local
Authorities) and the private sector, where the private sector share-holding
is less than 50%
Private sector

companies which have the intention of making profits and where those
profits could be distributed; and

companies which are partnerships between a private (i.e. profit-distributing
company as set out above) and a public sector body, and where the
share-holding of the private sector is 50% or more)
Third sector

non-governmental organisations which are value-driven and which
principally reinvest their surpluses to further social, environmental or
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Project Application Guidance
cultural objectives. It includes voluntary and community organisations,
charities and trusts, social enterprises, co-operatives and mutuals.
Resources identified as levered funding on the application form must be
supported by a signed statement of commitment from the funding body
that the resources are available. Project applications submitted without
confirmation of the (minimum of) 20% levered funding will be rejected.
For the avoidance of doubt, the Local Partnership or LAG should supply with the
project application a signed confirmation from the funding body, specifying the
Axis 3 or Axis 4 project name, the value of funding to be contributed and a
statement that the funds are readily available. The Local Partnerships and LAGs
should ensure that funding bodies have the ability to provide the funding and
should request further documentary evidence if necessary e.g. a bank statement.
Levered funding that can not be confirmed (as described above) at application
stage must be underwritten. Funding bodies, other than Local Authorities, that
underwrite levered funding must provide supporting documentary evidence to
demonstrate their ability to provide the funding if necessary.
The Local Partnership and LAGs should supply with the project application
signed confirmation from the funding body that they are underwriting the levered
funding, specifying the Axis 3 or Axis 4 project name, the value of funding to be
contributed and a statement that the funds are readily available. The signed
confirmation should also state where the funds will ultimately come from 4.
4.1
IN KIND LEVERED FUNDING
Article 54 of Commission Regulation (EC) No 1974/2006 states:
1. For measures involving investments in kind, contributions of a public or
private beneficiary, namely the provision of goods or services for which no
cash payment supported by invoices or equivalent documents is made,
may be eligible expenditure provided that the following conditions are
fulfilled:
(a) the contributions consist in the provision of land or real estate,
equipment or raw materials, research or professional work or unpaid
voluntary work;
(b) the contributions are not made in respect of financial engineering
actions referred to in Article 50;
(c) the value of the contributions can be independently assessed and
verified.
4
This is to ensure that the 15% calculation for the running costs for the Local Partnership and 20% calculation for the
running costs for the LAG are applied to the correct type of contributions i.e. public sector contributions
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In the case of provision of land or real estate, the value shall be certified
by an independent qualified expert or duly authorised official body.
In the case of unpaid voluntary work, the value of that work shall be
determined taking into account the time spent and the hourly and daily
rate of remuneration for equivalent work, where relevant on the basis of
ex-ante established system of standard costing, provided that the control
system provides reasonable assurance that the work has been carried out.
2. Public expenditure co-financed by the EAFRD, contributing to an
operation which includes contributions in kind shall not exceed the total
eligible expenditure, excluding contributions in kind, at the end of the
operation
In kind contributions are services, items or products donated to the project by an
individual or organisation where no cash transaction took place. All in kind
contributions must be eligible, actual, evidenced and essential to the delivery of a
project. In kind contributions are eligible under Axis 3 and Axis 4 provided the
following criteria are met:
Land and Real Estate
Page 5 of this guidance refers to the eligibility of the purchasing of land and
property. Local Partnerships and LAGs should note that the 10% limit on land
and property is not applicable to in kind land and property contributions.
In addition to the criteria set out on page 5, the following points are also relevant
when land / property are used as in kind match funding:

the certificate confirming the value of the land / property, as referred to on
page 5, should be based on the market value at the time of the
commitment of the contribution. This will be determined on the
coincidence of the following:
o dated evidence of the contribution of the land / building to the
project from the owner;
o dated certificate confirming the value of the land / building

The valuer’s certificate shall confirm that any building used for the
purposes of in kind levered funding conforms to national regulations or
where it does not, highlight these areas and confirm that rectification is
foreseen under the project. Rectification costs (i.e. site clearance /
decontamination / preparation) are also potentially eligible as in kind
levered funding if they are directly related to project delivery and covered
on page 5.
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Equipment and Raw Materials
Pages 6 and 7 refer to the eligibility of equipment and second hand equipment
under Axis 3 and Axis 4. In addition to that criteria the following points are also
relevant when equipment and materials are used as in kind levered funding:

evidence must be maintained on the value of the amount committed as in
kind levered funding. This may be in the form of a published price list or
catalogue showing the equipment or materials or, for more bespoke items,
valuation from an independent qualified valuer.
Research or Professional Work
The following points are relevant when research or professional work is used as
in kind levered funding:

The sponsor must maintain evidence that the value of the services
provided equals the amount claimed as in kind levered funding:
o A published tariff or rate list for the service provided should be
available;
o Evidence should be available to prove that these figures are
competitive with competitor prices;
o Timesheets or other records of the time contributed need to be
maintained if the cost uses this basis.
Discounted sales of equipment and the discounted provision of services or
advice are ineligible.
Unpaid Voluntary Work
In the case of unpaid voluntary work5 essential for the delivery of the Axis 3 or
Axis 4 project, the value of the work is determined taking into account the amount
of time spent and the normal hourly or daily rate for the work carried out
Additionally:

Amounts claimed for this activity must be claimed at a rate commensurate
with the nature of the work undertaken and not based on the usual salary
or wage rate of the volunteer. If a volunteer does the same or similar
duties as paid staff, the rate allowed for the volunteer will be the salary
rate of the paid employee. In the absence of a comparative salary rate,
5
Costs for staff deployed by an organisation on a project count as actual levered funding (evidenced by salaries) not in
kind levered funding
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acceptable rates are included on page 20. The rates outlined on page
20 for the use of unpaid work as in kind levered funding should not
be exceeded for any project.

The inclusion of costs of more specialist and technical roles as in-kind
match-funding would need to be agreed with WEFO before the activity
commenced. The project would be expected to keep clearly documented
justification for the specialist and for the agreed salary rate used for the
purposes of in-kind match-funding.

Time sheets should be maintained to support the hours claimed towards
the project and should be signed by the volunteer and employer. An
example of an appropriate time-sheet is included in Annex II.

Only persons acting in a wholly voluntary capacity will be eligible. Where
an employee of the project performs additional ‘voluntary’ duties these will
not be eligible as in-kind match-funding.
Project Assessment and Risk
Projects where there are significant amounts of in kind levered funding may be
vulnerable to cash-flow difficulties should the amount or timing of in kind activity
vary. Sponsors should also ensure that they provide a full audit trail for annual
audits.
Calculation of Grant
The Axis 3 or Axis 4 contribution to a project will not exceed the total eligible
expenditure minus the in kind contribution. For example:
(a)
(b)
(c)
Total eligible costs
In kind contribution
Actual expenditure incurred
£396,000
£213,000
£183,000 (a – b)
Maximum Axis 3 or Axis 4 grant is £183,000
In kind contributions must always have a corresponding project cost i.e. in the
project financial tables; the in kind cost will appear on the expenditure side and
will be exactly balanced by a corresponding in kind levered funding figure.
Capital project costs should only be matched by in kind levered funding that
relates to capital, and equally revenue costs only by revenue in kind levered
funding.
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AGREED NOTIONAL COSTS TO BE USED AS ACCEPTABLE RATES FOR
VOLUNTARY WORK
Job Title
SOC6 Code
Project Manager
Project Researcher
Project Coordinator
Trainer
Project Administrator
Self Employed (sole trader/partnership)
Unskilled Labour (22 years of age plus)
Unskilled Labour (18 – 21 inclusive)
Unskilled Labour (under the age of 18*)
1121
2329
3539
3563
4150
-
Hourly Annual
Rate (£) Rate (£)
20.25
42,015
15.48
29,568
13.48
26,366
12.61
24,510
9.37
18,504
10.67
5.80
4.83
3.57
-
*under the age of 18 and no longer of compulsory school age i.e. a person is no
longer of compulsory school age after the last Friday of June of the school year in
which their 16th Birthday occurs
5.
INCOME/REVENUE GENERATION
Income/revenue generated by a project during the period in which the project
receives funding from Axis 3 or Axis 4, should reduce the financial assistance
awarded via Axis 3 or Axis 4.
Examples of income/revenue generation are (this list is not exhaustive):

sales of articles produced as a direct result of project activity

sales of services provided as a direct result of project activity

rental of training facilities funded by the project

receipts from the provision of other facilities funded by the project e.g.
rentals on accommodation
Income/revenue generation that is anticipated at application stage7 will reduce
the value of Axis 3 or Axis 4 funding awarded to the project and contribute
towards the (minimum of) 20% levered funding. Local Partnerships and LAGs
should calculate the value of the anticipated income/revenue and declare it on
the application form at section 8: Sources of Levered Funding. A rationale for the
basis of the calculation should be supplied with the application.
6
Standard Occupational Classification
(i.e. the Local Partnership or LAG have applied for expenditure that will generate income/revenue in the project
application e.g. expenditure to renovate a community hall so that it can be hired out to the local community for events etc.)
7
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Project Application Guidance
Income/revenue anticipated at application is not secured funding and must be
underwritten. Funding bodies, other than Local Authorities, that underwrite
anticipated income/revenue must provide supporting documentary evidence to
demonstrate their ability to provide the funding if necessary.
The Local Partnership and LAGs should supply with the project application
signed confirmation from the funding body that they are underwriting the
anticipated income/revenue, specifying the Axis 3 or Axis 4 project name, the
value of funding to be contributed and a statement that the funds are readily
available.
Income/revenue generation that is not anticipated at application stage but
generated by project activity should be declared to the Welsh Assembly
Government during project implementation. Income/revenue generation that is
not anticipated at application stage will either:
(a) be off set against the value of Axis 3 or Axis 4 funding awarded thus
reducing the assistance; or
(b) the Local Partnerships or LAG can increase the total project cost by the
value of income/revenue generated, allowing additional activity to be
undertaken. The value of assistance from Axis 3 or Axis 4 will remain
constant, but the grant rate will reduce.
Example of how (a) is applied
Project Funding at application:
Total Project Cost
£100,000
Axis 3 Contribution
£ 80,000
Secured Levered Funding Contribution £ 20,000
From sales of articles produced by project activity not anticipated at project
application, the Local Partnership generates £5,000 of income (supported by
documentary evidence that the income is declared in the projects accounts). The
income is declared to the Welsh Assembly Government.
Projects Funding will now be:
Total Project Cost
£100,000
Axis 3 Contribution
£ 75,000
Secured Levered Funding Contribution £ 25,000
Example of how (b) is applied
Project Funding at application:
Value
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Grant Rate
Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
Total Project Cost
£100,000
Axis 3 Contribution
£ 80,000
Secured Levered Funding Contribution £ 20,000
80%
20%
From the rental of training facilities not anticipated at project application, the
Local Partnership generates £10,000 of income (supported by documentary
evidence that the income is declared in the projects accounts). The Local
Partnerships submit a request to increase the total project cost by £10,000 and
use the income to renovate an additional part of the training facilities building.
The request is approved by the Welsh Assembly Government.
Projects Funding will now be:
Value
Total Project Cost
£110,000
Axis 3 Contribution
£ 80,000
Secured Levered Funding Contribution £ 30,000
6.
Grant Rate
72%
28%
OUTPUTS & RESULTS
Council Regulation (EC) No 1698/2005 specifies a single framework for
monitoring and evaluation of all Commission funded rural development
interventions across the EU known as the Common Monitoring Evaluation
Framework (CMEF). The CMEF establishes a set of common indicators which
should be used to record information. Guidance on the monitoring and
evaluation and performance indicators was provided to Local Partnerships and
LAGs with at the EOI stage. Local Partnerships and LAGs were required to
choose output and result indictors from the CMEF.
Recognising that the common indicators of the CMEF may not fully capture the
effects of programme, the CMEF allows for Member States to include additional
indicators if they conform to the requirements of the CMEF. This provides an
opportunity to integrate additional indicators that can capture other performance
information which the standard definitions may miss.
A number of additional performance indicators have therefore been added to the
monitoring framework for Wales.
For Axis 3 projects Local Partnerships must select additional indicators from the
Rural Development Plan for Wales 2007 – 2013 Performance Framework, in
addition to the outputs and results selected at the EOI stage, at project
application.
Given the innovative nature of Axis 4 activity, LAGs will initially undertake
engagement, capacity building and project development activities before
implementing pilot projects. As achievements are recorded through project
implementation following the initial activity, LAGs will be required to report on the
additional indicators quarterly in arrears. At project application stage, LAGs are
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not required to select any additional indicators other than those selected from the
CMEF at the EOI stage.
Contact the Welsh Assembly Government for a copy of the Rural Development
for Wales 2007 – 2013 Performance Framework.
7.
CROSS CUTTING THEMES
There are three cross cutting themes for the Rural Development Plan for Wales
2007 - 2013 as a whole. These are: young people from across the rural
community; organics, both production and produce; and energy efficiency.
These are discussed in pages 65 & 66 of Section 5 of the Rural Development
Plan for Wales 2007-13.
Young People
Given the demographic imbalance in rural areas it is essential that we invest in
our young people both in terms of vocational skills and wider life skills. For this
reason all the Axes include measures that either directly target young people or
have them as a designated target group.
Organics
In terms of organic production methods and produce, the environmental and
economic returns are a significant consideration for all the Axes and although the
key support will come from Axis 2 measures under the other Axes will also take
full advantage of the opportunities offered by this sector.
Energy Efficiency
It is essential that the Rural Development Plan for Wales meets its full potential in
delivering against renewable and energy efficiency targets and priorities. Two key
aspects of this are to improve energy efficiency and reduce the demand for
energy in rural communities and businesses. For this reason the sustainability
and energy footprint of projects will be taken into consideration during
assessment. In the case of Axis 3 & Axis 4 LEADER this requirement is built into
the environmental sustainability guidance and the information required on all
project applications.
For Axis 3 & Axis 4 the Welsh Assembly Government also asks Local
Partnerships and Local Action Groups to address the following:




Environmental Sustainability
Equality of Opportunity
Welsh Language
Information Communication Technology
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These themes are important in helping Wales to achieve sustainable
development. They help the Welsh Assembly Government to meet its obligations
under the Government of Wales Act 2006, ensuring equality of opportunity for all
people in Wales and the promotion of sustainable development and the Welsh
language. They also contribute to the Lisbon and Gothenburg agenda for higher
quality jobs and sustainable development.
One Wales: One Planet states that in Wales, sustainable development means
enhancing the economic, social and environmental wellbeing of people and
communities, achieving a better quality of life for our own and future generations
in ways which promote social justice and equality of opportunity; and in ways
which enhance the natural and cultural environment and respect its limits - using
only our fair share of the earth’s resources and sustaining our cultural legacy.
Sustainable development is the process by which we reach the goal of
sustainability.
To view a copy of One Wales: One Planet go to the Sustainable Development
pages on the Welsh Assembly Government Website
http://wales.gov.uk
Equality of Opportunity
In accordance with Article 8 of Council Regulation (EC) 1698/2005, the RDP will
promote equality between men and women and prevent discrimination on sex,
racial or ethnic origin, religion or beliefs, disability, age or sexual orientation
grounds. Wales, as a truly bilingual country, places considerable importance on
the use of language as a matter of choice whether this is Welsh or English.
Benefits
Equal opportunities must be integrated into all projects. The European
Commission has made equal opportunities one of its main pillars to underpin all
of the Programmes and expects all projects to fully reflect this aspect of
improving the Welsh economy.
Local Partnerships will be adding value to project applications by integrating
equal opportunities throughout the project, resulting in benefits to the
Partnership, the delivery organisation(s) and the beneficiaries. Ultimately this will
spin out into the wider community, the Local Partnership will be recognised as
having excellent equalities practice and will be seen as a good role model. As
well as fulfilling the requirements of Axis 3 and/or Axis 4 the Local Partnership
will also be helping to enrich the opportunities available within the Welsh
economy.
By recognising the importance of the equal opportunities when designing the
project and incorporating this in the project application as well as throughout the
implementation of your project, in 2013 we will have a more inclusive society and
Page 24 of 37
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Project Application Guidance
productive economy in Wales as a result of all our activities using European
funding.
Welsh Language
The Welsh Assembly Government wants Wales to be a truly bilingual nation
where people can choose to live their lives through the medium of either Welsh
or English or both and where the presence of the two languages is a visible and
audible source of pride and strength to everyone. In order to fulfil that vision, the
Welsh Assembly Government has made a commitment in Iaith Pawb, the
National Action Plan for a Bilingual Wales
http://wales.gov.uk/topics/welshlanguage/policy/iaith/?lang=en
and its Welsh Language Scheme
http://wales.gov.uk/topics/welshlanguage/policy/WLS/?lang=en
to mainstream the Welsh Language across policy areas to ensure that all our
policies and initiatives are compatible with the bilingual nature of Wales, that they
do not undermine the Welsh language and where possible that they will
contribute to the promotion of the language and sustainability of Welsh language
communities. The implementation of Axis 3 & Axis 4 will reflect this commitment.
Benefits
Project applications must demonstrate how the project will meet the needs of
Welsh speakers for which the services or activities will be provided.
Whilst preparing project applications, it should be borne in mind that:






conditions with regard to the use of Welsh can be attached to any offer of
grant.
using Welsh constitutes good practice and can ensure that the activity to
be funded better meets the needs of Welsh speakers and learners.
face to face services, or activities in which the public will take part, should
be available through the medium of Welsh (depending on the availability of
Welsh speaking staff and volunteers)
any printed material to be produced with grant support should be fully
bilingual (this includes leaflets, booklets, signs, posters, packaging, user
instructions, menus and marketing, publicity and display material)
any website pages to be produced with grant support should be published
in Welsh and English
further guidance about this can be found in the Welsh Language Board’s
document, Awarding Grants, Loans and Sponsorship http://www.bwrdd-yriaith.org.uk

The document discusses the above in more detail (and explains the
circumstances when it can be acceptable not to use Welsh, or not to use
English).
costs to comply with Welsh Language requirements will need to be
included in the financial projections for the project.
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Information and Communication Technology
The provision of Information and Communication Technology (ICT) is one of the
cross-cutting themes that underpins European programmes including the Rural
Development Plan 2007-2013. Through the development of ICT in Europeanfunded projects, Wales will come closer to its goal of becoming a leading
knowledge-based society. In turn, ICT development will provide attractive and
competitive opportunities for the commercial environment and entrepreneurship
in Wales.
Benefits
The inclusion of ICT in projects will help to increase the domestic prosperity of
the Welsh economy and will also contribute to its’ international competitiveness.
Organisations using ICT will benefit from improvements in the areas of
competition, innovation and growth. ICT also offers many opportunities and
solutions through which other goals, including equal opportunities and
environmental sustainability can be achieved. In turn, projects incorporating ICT
will help Wales to be at the forefront of new developments, producing a cohesive,
knowledge-based society capable of delivering sustainable economic and social
prosperity for all people in Wales.
Environmental Sustainability
Programmes that aim to improve economic prosperity have the potential danger
of adversely affecting the global and local environment in which we live. The
Welsh Assembly Government has a duty to promote sustainable development
without sacrificing the environment. Environmental sustainability means the
sustainable management of environmental resources and this has an important
role to play as one of the Rural Development Plans’ cross-cutting themes.
Benefits
Projects can benefit from promoting the principles of environmental sustainability.
Substantial savings and profits can be made from the more efficient use of
natural resources and from the marketing advantages of employing
environmentally friendly products. A high quality environment encourages
investment, promotes tourism and improves the quality of life through a sense of
well-being.
All project applications submitted must properly integrate
environmental sustainability.
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Meeting the requirements of the environmental sustainability cross-cutting
theme
Introduction
The Welsh Assembly Government requires that all project applications submitted
for consideration under Axis 3 and Axis 4 of the Rural Development Plan for
Wales 2007-13 (RDP) must address environmental sustainability.
Local
Partnerships must show that environmental sustainability priorities and issues
have been incorporated into all projects.
Background
Environmental sustainability is a part of meeting wider sustainable development
targets. The Welsh Assembly Government has a duty, enshrined the
Government of Wales Act, to promote sustainable development without
sacrificing the environment.
In addressing the requirement for meeting environmental sustainability in the
RDP it is sensible to adopt a standard approach to the definition and
classification of environmental sustainability. The UK wide approach to
sustainable development recognises four key priority areas8:
 Climate Change and energy
 Sustainable consumption and production
 Natural resource protection and environmental enhancement
 From local to global: building sustainable communities
The Welsh Assembly Government has signed up to these key priorities. There
are of course many more detailed issues within each key priority, but this is an
important initial classification for evaluating the achievement of environmental
sustainability. In terms of projects submitted for funding it is clear that there are
different levels of potential achievement in respect of meeting environmental
sustainability targets. To be both logical and consistent these can be summarised
at three levels:
 At the lowest level, Level 1, the project creates awareness of the
environmental consequences of what is proposed
 At the second level, Level 2, the project encourages or promotes action to
address environmental sustainability
 At the highest level, Level 3, the project achieves a measurable change
that enhances the environment or improves sustainability
The three levels reflect the different potential environmental gains that a project
may deliver. Level 1 achieves a minimum standard of environmental
sustainability. Level 2 achieves a desirable standard, and Level 3 an ideal
standard. All projects, regardless of sector or content have an environmental
8
www.sustainable-development.gov.uk/what/priority/index.htm
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impact, however small. At the very least, a project should create awareness of
that impact, and the environmental consequences of what is proposed. For the
purposes of the Rural Development Plan for Wales 2007-13, it is suggested that
in meeting an environmental sustainability cross-cutting theme requirement, all
projects should meet the minimum standards of Level 1. More progressive
projects will meet Level 2 standards (desirable), and Level 3 standards (ideal).
Table 1 provides a general description of the type of activity within a project that
would enable it to meet the three different levels of achievement for each key
environmental sustainability priority.
Table 1: General description of levels of achievement
Level of achievement for each project
Key Priority for
Level 1
Level 2
Level 3
environmental
Create
Encourage
Achieve actual
sustainability
awareness
action
enhancement/
behavioral
change
1 Climate Change and
Create
Actively
Achieve reduced
energy
awareness of
encourage
emissions, or
energy use and
adaptation or
adaptation to
climate change
behavior change
climate change
2 Sustainable consumption Create
Actively
Achieve reduced
and production
awareness of
encourage new
consumption or
consumption
products and
new eco-friendly
issues
lower
products
consumption
3 Natural resource
Create
Actively
Achieve
protection/ environmental
awareness of
encourage
environmental
enhancement
the natural
sustainable
enhancement
environment
management
4 Building sustainable
Create
Actively
Empower local
communities
awareness of
encourage
people and
local community sustainable local
achieve community
issues
businesses and
involvement
communities
Desirable
For each project: Minimum
Ideal standard
standard
standard
Within each priority are a number of more detailed issues that can be addressed.
The kind of key issues and actions that could be expected and encouraged at
each level under each priority are identified, as examples, in Appendix 1. These
descriptions provide just a selection of the issues that could be addressed and
what may be achieved for each. It is not meant to be comprehensive and many
more examples may occur in practice.
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Guidance to Local Partnerships
Local Partnerships, in submitting project applications to the Welsh Assembly
Government, will be expected to include a completed proforma (or checklist)
illustrating the way in which the Plan, and its constituent projects, meets the
environmental sustainability requirement. A draft checklist is shown at Table 2.
The checklist should be completed, for each project, in the following way:
1. Identify which environmental sustainability priority the project addresses.
2. Identify and specify, within that priority, which issue it addresses. Appendix
1 can be used as a guide to the types of issues likely to be important, but
this is not a comprehensive list, and other issues may be important locally.
Identifying the environmental sustainability issue that is addressed is an
important prerequisite to achieving an environmental sustainability target.
3. Describe what is to be achieved and how that level of achievement is to be
attained. Entries should be full enough to describe in a credible way what
is being achieved and how it will be attained. The example descriptions in
Appendix 1 can be used to guide the process of completing relevant
boxes, although much fuller descriptions and justifications will normally be
required if the achievement is to be judged credible.
There is an overall expectation that every project, regardless of sector or activity,
should be able to address at least one environmental sustainability issue and
complete at least one box at Level 1. For this to be realistic and credible,
however, the interaction between the project and the environment needs to be
kept in mind from the very start of the process of formulating the project, since
this can influence the final project specification. Usually, trying to find an
environmental justification for a project written without this thinking at the input
stage weakens the assessment of environmental impact, which will show up
when describing how the level of achievement will be attained.
Table 2: Local Partnership Checklist to complete for each project
Project Name:
Which key priority and issue does it
address
Priority addressed
Issue addressed
1 Climate Change
Specify which issue
and energy
is addressed
2 Sustainable
consumption and
production
Level of achievement for each project
As above
Level 1
Description of
what is to be
achieved and
how it is attained
As above
Level 2
Description of
what is to be
achieved and how
it is attained
As above
Level 3
Description of
what is to be
achieved and how
it is attained
As above
As above
As above
As above
As above
As above
As above
As above
As above
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Project Application Guidance
3 Natural resource
protection
4 Sustainable
communities
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
As above
Projects may of course address more than one priority or issue, and it may
be that two or more boxes, on two or more rows, can be completed. For
example:
 Any project which brings about an actual improvement in environmental
performance will also create awareness and encourage action;
 A reduction in energy consumption will also bring about a reduction in use
of resources and in carbon dioxide emissions;
 Setting up a recycling scheme will reduce the quantity of waste produced.
All associated environmental benefits should be described, as far as possible,
and as many other boxes completed as necessary. Additional entries in the
checklist may only become evident after the first box is completed. If a Level 1
box is completed, it may be prudent to consider whether a higher level of
achievement is possible by improving the project specification. Local
Partnerships should bear in mind that the credibility of their entries in the
checklist, and that these must justified if challenged by the Welsh Assembly
Government
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Project Application Guidance
Appendix 1: Example descriptions of possible types of environmental sustainability achievement
Priority
Issue
Level 1:
Create awareness
Climate
Change and
energy
Efficient
energy use
Create awareness of how to
reduce energy use
Alternative
energy
Create awareness of the types of
‘clean’ sources of energy
Climate
change
Create an awareness of climate
change issues, incl. adaptation
and mitigation measures
Implement climate change adaptation
and mitigation measures
Good building
design
Create awareness of
environmental good practice in
building design.
Improve a building’s environmental
performance.
Carbon
footprint
Create awareness of the
environmental footprint concept
Sustainable
purchasing
policies
Create an awareness of how
purchasing policies can promote
or achieve better environmental
impacts, eg. recycled paper, local
products.
Waste
production
Create awareness of how to
reduce waste
Achieve a reduction in the quantity of
waste generated
Recycling
Create awareness of how to
promote recycling
Achieve an increase in recycling – metal,
paper, cardboard, plastics, IT equipment,
electrical equipment
Sustainable
consumption
of resources
Create awareness of how to
conserve natural resources
Achieve a reduction in the use of natural
resources
Sustainable
tourism
Create awareness of the need to
reduce environmental impacts
Sustainable
consumption
Level 2:
Encourage action
Level 3:
Achieve change
Achieve a reduction in energy use
Promote the use of ‘clean’
energy
Disseminate knowledge about
ISO or other environmental
standards
Gain green tourism sustainability
credentials
Page 32 of 37
Development of tourism enterprises that
incorporate green tourism: energy
efficient buildings, renewable energy,
recycled building materials, recycling
waste etc
Axis 3 and Axis 4 of the Rural Development Plan for Wales 2007 – 2013
Project Application Guidance
Natural
resource
protection
Sustainable
training
Include awareness of sustainable
development principles and
environmental priorities into all
training courses
Countryside
Create an awareness of issues
which relate to farming,
sustainable agriculture and
horticulture, including organic
farming
Biodiversity
Sustainable
communities
Develop green training courses with use
of distance learning and the Internet
Promote the care of the
countryside
Protect biodiversity through
careful targeting of development
activities,
Cultural
heritage/
landscape
Raise awareness cultural
heritage and landscape qualities
for their inherent value and to
underpin economic opportunities
Protect the cultural heritage and
landscape qualities
Local transport
Increase awareness of local
public transport choices
Promote the use of public
transport for tourism
Local access
Local products
Local
renewable
energy
Promote integrated local walking
and cycling routes
Increase awareness of the
benefits of locally produced food
and other items
Enhance biodiversity through the
creation of habitats
Improve provision of local walking and
cycling routes (to schools, shops, leisure
facilities etc) and provide facilities, eg
bike racks
Increase the availability of locally
produced food, timber and other
products
Promote the use of locally
produced renewable energy (incl
heat, combined heat and power)
Local
environment
Involve the community in environmental
improvement activities
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Project Application Guidance
8.
GRANT SCHEMES
Axis 3 and Axis 4 projects that will operate grant schemes, whether the project is a grant
scheme in its entirety, or the grant scheme is an element of a larger project, must conform to
the following criteria:
1) All documentation must be forwarded to the Welsh Assembly Government on
completion. This includes (but not exclusively):
 application forms
 scheme guidance
 advice notes to applicants
 a copy of the approval / rejection letter templates
 agreements
 Detail of the appraisal process
No monies are to be awarded until this information has been received and agreed by
the Welsh Assembly Government as fit for use.
2) A robust process of appraisal must be created and submitted before any monies are
awarded.
3) All projects funded will actively adhere to the cross cutting themes of the approved
Axis 3 or Axis 4 project; namely the Welsh Language Policy, the Equal Opportunities
Policy, Environmental Policy and the ICT Policy.
4) Approved projects under the grant scheme must be delivered within the relevant,
approved programme area, and that the projects will conform to the eligibility rules
and requirements of Axis 3 and Axis 4 funding
5) Grant schemes must not be used to double fund any previously funded EC activities /
infrastructure.
6) The recovery of grant will need to be in accordance with EC rules. The Commission
reserves the right to judge projects on a case by case basis at any point during or
after the project. You will need to ensure that any approval letters cover the
reclaiming of grant should this prove necessary.
7) State aid rules must not be breached.
8) Clarification of who will hold the projects’ invoices and serial numbers for any
purchases.
9) Clarification of ownership of assets to which the grants are contributing.
10) Dates for commitment and expenditure will be the same for the programme.
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11) Clarification of whether the levered funding contribution will be in cash, in kind or a
combination of the both.
12) Confirmation that the project will be reported upon providing information on spends
and approved applications in line with all other approved Axis 3 or Axis 4 projects.
13) Grants must not be used to refinance company liabilities
14) All recipients must be economically and financially viable.
15) The Welsh Assembly Government and the European Court of Auditors have the right
to audit the activities of the grant including the right to carry out audits or have them
carried out on the grant recipient at any point during or after the completion of the
project.
16) Administration costs will not exceed 10% of value of funding awarded as grants e.g. if
a project intends to award £50,000 of grants, the eligible cost of appraising
applications for assistance, approving the applications, reconciling claims and making
payments to the recipients, and monitoring the outputs of the grants can not exceed
£5,000.
17) All statutory procedures must be in place before grant is awarded to any organisation.
18) All materials funded are branded appropriately bearing the programme sponsor logos.
Local Partnerships and LAGs operating grant schemes should complete the supplementary
sections of the project application.
9.
STATE AID
State aid is a European Commission (EC) term for any public resource given selectively to
an undertaking that could potentially affect competition and intra-community trade. State aid
provided by European Union member states can distort the market, which in turn can result
in lower competitiveness for business, less innovation and ultimately higher prices for
consumers. There is therefore a need for effective State aid control in order to maintain a
level playing field for free and fair competition in the single market.
State aid is defined under Article 87 (1) of the EC Treaty as being any form of assistance
from a public body, or publicly funded body, given to undertakings on a discretionary basis,
with the potential to distort competition and affect trade between member states of the
European Union.
An undertaking is defined as any entity, regardless of its legal status, that is engaged in
economic activity, where there is a market in comparable goods and services. It can include
voluntary and non-profit-making public or private bodies when they engaged in activities that
have commercial competitors.
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Aid givers must consider whether any assistance provided could constitute State aid. As
State aid is a very complex area of public administration and the rules are not always
straightforward, it is essential to consider at the earliest possible stage whether a measure
will present problems and to obtain specialist advice.
The State aid rules are policed by the EC and comprise various articles of the EC Treaty,
regulations, frameworks and guidelines – which set out what aid can be given. The EC
governs member states’ compliance with these rules and must be notified of all schemes
involving State aid. State aid issues should be considered as early as possible in the
development of a proposal. Any unlawful aid – given in contravention of the EC’s State aid
rules – may result in infraction proceedings and the recovery, within interest, of the payment
from the recipient.
The key criteria for State aid to be present are as follows:

The aid is granted by the State or through State resources;

The aid favours certain undertakings or production of certain goods (i.e. it is
selective);

The aid confers an advantage on the recipient;

It distorts or threatens to distort competition; and

It affects or has the potential to affect trade between EU member states.
All of these conditions must be met for State aid to be present. However, the European
Court of Justice interprets their application widely. The potential to distort competition and
affect trade criteria, in particular, are very broad and further specialist advice should be
sought in relation to the application of these criteria.
Aid granted by the state (either directly by the state or by companies and agencies
established by the state to distribute public funds) includes direct payment of state resources
in the form of grants, subsidies etc as well as indirect benefits that affect the public budget
such a tax breaks, rate rebates, selling public land below market value and the provision of
services at below market rates.
A selective measure is a discretionary measure that favours certain types of companies or
the production of certain types of goods, that is, the advantage is not available to all firms in
all sectors, in all areas without any discrimination. Discretion might be given, for example, in
relation to the type of goods produced or services provided or the type, location or size of an
undertaking.
An advantage is conferred when an aid measure relieves the burdens normally assumed in
an undertaking’s budget and gives the undertaking an economic advantage which it would
not have obtained under normal market conditions. It does not have to be in monetary form:
the term encompasses not only grants, subsidies, loans or guarantees given by the state,
but also anything owed to the state but which it fails to collect i.e. tax exemptions, or relief
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Project Application Guidance
from charges such as interest on loans, or products or services that the state gives for free
or below commercial rates.
Competition is distorted if the aid in question strengthens the competitive position of the
recipient by reducing its costs in relation to its rivals. The undertaking’s share of the market
or the size of the distortion are irrelevant: small effects are sufficient to conclude distortion.
The Commission interprets this very widely and it is for the member state to prove that there
is no distortion.
Most products and services are traded between member states and therefore aid for any
selected business or economic activity is capable of affecting trade between states even if
the recipient undertaking itself does not trade with other member states. Companies do not
have to be involved in exporting goods themselves in order for there to be an effect on trade
between member states. It is enough that the product or service is subject to trade between
member states.
Whilst the European Treaty sets out that aid provided by a member state which distorts or
threatens to distort competition and trade between member states is incompatible with the
common market, there are circumstances in which State aid may be allowed e.g. the
promotion of environmental protection, culture and heritage conservation, research and
development by companies, and support for small and medium-sized enterprises (SMEs).
This scope is set out in a series of documents – frameworks, guidelines, block exemption
and communications – published by the EC.
The authorised State Aid Framework for Axis 3 of the Rural Development Plan 2007 2013 is 1998/2006 De Minimis Aid. Local Partnerships should apply the De Minimis
rules when awarding funding to grant recipients under their approved Axis 3 project.
The De Minimis Regulation covers small amounts of aid ("de minimis” aid) within a
predetermined threshold which do not count as State aid in the sense of Article 87(1)
because the Commission considers that such small amounts of aid will have a negligible
impact on trade and competition and are therefore exempt from the notification requirements
of the EC competition rules.
De minimis aid cannot be awarded where the total de minimis aid awarded to the
undertaking over the last three fiscal years would breach the ceiling of €200,000 (€100,000
for undertakings in the road transport sector). De minimis aid may not be cumulated with
other State aid in respect of the same project if such cumulation would result in an aid
intensity exceeding that fixed by the relevant block exemption or approved aid (this means
that the practice of ‘topping up’ other aid with de minimis aid is prohibited).
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