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[ Contents ]

From strategy to action:
project selection

Chapter 1
The various methods of project selection

 



1.8 The application of the selection criteria

 

All or nearly all cases are included, from the most formal and sophisticated systems to very simple calls for proposals. However, one important element differentiates the LAGs: the use of a weighting system.

a) Using a weighting system

Using a points system to select the projects has several advantages:

  • it enables the relative importance of the criteria to be formalised and made known;

  • it makes it easier to process the files;

  • it is particularly useful, even essential, when there are a large number of projects to process and/or pressure.

However, it has difficulty in evaluating certain qualitative elements of the projects submitted and correctly predicting the weighting to be allocated to each criterion.

An example of a weighting system: Guadiato (Spain)

The Guadiato LAG (Andalusia, Spain) chooses projects according to a weighting system with 7 criteria, for a total value of 8 points allocated as follows:

  • 2 points are awarded depending on how well the project conforms to the aims of the local LEADER programme, its innovative character and its contribution to the whole area's development;

  • 1 for the project's contribution to the reduction in area and productive imbalances;

  • 1 for the assurances made by the promoters;

  • 1 for the use of local production resources,

  • 1 for the creation of jobs;

  • 1 for the way in which the project is carried out;

  • 1 for the multiplier effect generated by the project.

As the following table shows, these points are calculated on the basis of weighted indicators for each criterion.

 

The weighting system used by the Guadiato LAG (Andalusia, Spain) for project selection
Criteria Indicators Value
1- Project's technical, economic and financial viability 1.1- Investment YES NO
1.2- Personal contribution and solvency YES NO
1.3- • commercial strategy [1] YES NO
    • other indicators: financial equilibrium
YES NO

2- Compliance with the programme's aims, innovative character and contribution to the integrated development of the area

2.1- theme of interest for the development of productive sectors 0 0,4
2.2- Innovative character
  • New technologies
  • New products
  • New processes
0 0,3
2.3- Use of existing infrastructures 0 0,3
2.4- Demonstrative effect 0 0,3
2.5- Boosting and motivating nature 0 0,4
2.6- Compliance with standards:
  • for town-planning
  • for the environment
  • for landscapes
  • for the rural heritage
0 0,3
2 POINTS
3- Help in correcting the area and productive imbalances 3.1- Entrepreneurial diversification: sectors and activities 0 0,25
3.2- Location in a priority area, depending on the type of investment 0 0,25
3.3- Complementarity with the other sectors 0 0,25
3.4- Marketing or destiny of production:
  • marché local
  • provincial market
  • other markets
0 0,25
1 POINT
4- Promoters' guarantee 4.1- promoters' and company's track record 0 0,7
4.2- guarantee of the continuity of the activity and stages of realisation 0 0,3
1 POINT
5- Use of local production factors 5.1- Origin and processing of local produce 0 0,6

5.2- Relations with supplier companies in the area

0 0,4
1 POINT
6- Job creation or maintenance 6.1- aimed at groups with problems of integration into the job market 0 0,25
6.2- Direct job creation:
  • permanent workers
  • seasonal workers
  • self-employment
0 0,25
6.3- Induced direct jobs 0 0,25
6.4- Inclusion of training plans 0 0,25
1 POINT
7- Way project is realised 7.1- Appropriateness of the type of investment:
  • Initial expenses
  • Extension
  • Modernisation
  • Relocation of an outside company to the area
0 1
1 POINT
8- Multiplier effect 8.1- Vertical integration or integration into the sector 0 1
1 POINT
[1] The commercial strategy includes the following aspects as far as possible: study of the product or service, market survey, development of demand, analysis of competition, pricing policy, distribution channels, advertising, promotion.

 

This system, which enables projects to be classified, has a number of eliminatory conditions:

  • the project's technical, economic and financial non-viability is an eliminatory criterion;

  • the project's compliance with the aims of the LEADER programme, its innovative character and its contribution to the area's integrated development must be awarded at least one point.

  • if the project obtains 0 for any of the seven criteria, it is eliminated.

b) If a weighting system is not used

Many LEADER groups do not use a points system, particularly LAGs operating in two types of context:

  • where LEADER aims to help achieve a qualitative jump to some of the area's assets (environmental quality, cultural supply, leisure facilities, etc.), for example by favouring the organisation of and support for joint representation;

  • where the Initiative is used at the service of a "basic" development in areas deprived of a strong local dynamic and where "everything that moves" must be supported.

The non-use of a weighting system enables inter alia:

  • files to be processed in a more personalised manner (each proposal is examined case by case);

  • the projects' content and originality to be better taken into account;

  • a more pro-active orientation approach (the proposed project is fine-tuned depending on the eligibility criteria of LEADER or directed towards other sources of funding).

However, particularly as far as the experimental projects aimed at "awakening" a local dynamic are concerned, the risks of error and failure are greater. Most LAGs that do not use a points system have therefore made provisions aimed at lowering the risk factor: close monitoring and regular appraisal of projects implemented, a ceiling on the amount of subsidies awarded, etc.

In all of these cases, if a weighting system is not used, logistical support and considerable monitoring is required.

  • For the South Devon & Dartmoor LAG (England, United Kingdom), projects are selected mainly in a "community" development logic and a logic of mobilisation of the local population ("community development"). Each project must:

    • demonstrate considerable local support and meet real needs;

    • enable new or existing economic sectors to grow (stimulate agricultural diversification, tourism, arts and culture as local economic resources);

    • maximise the consequences for the local community in terms of training, social, cultural or leisure activities etc;

    • be innovative for the area;

    • demonstrate its environmental benefits;

    • encourage the involvement of the private sector in the rural development process;

    • demonstrate its integration with other programmes implemented in the area and use the LEADER funds only when other funds are not available;

    • be sustainable, as the activities must be able to be continued once the financial support of LEADER II has ended.

Several systems exist to lower the risks entailed by not using a weighting system:

  • the Wexford LAG (Ireland) has implemented a system of project presentation by stages, comprising several levels of discussion and selection with the beneficiaries;

  • the Capo Santa Maria di Leuca LAG (Apulia, Italy) has set a funding ceiling for each project, which has enabled it to support 144 projects, 82% of which are small scale and are an individual initiative. Apart from lowering risks, the initial (LEADER I) aim of the LAG was to raise the confidence of young entrepreneurs by giving a considerable number of them the chance to progressively introduce qualitative improvements in their businesses in order to subsequently (LEADER II) strengthen the multiplier effect of their work by suggesting that they work in a network.

This does not mean that all formalities were abolished: the LEADER group's approach to project selection can be described as "progressive" and "heavily based on human contact between the LAG practitioners and potential project leaders". It aimed to identify, before a more formal selection process took place, the actors whose initiatives could be integrated into the LAG's strategy. An "invitation to submit projects", published in the local press, determined the general guidelines (especially the privileged sectors) for access to LEADER funds and invited those interested to go to the LAG's offices and discuss their idea. Following this initial meeting, the LAG's practitioners went to the candidate's business to assess the project's environment. It was only once this stage had been completed that the LAG suggested that the candidate formally submit a request for funding.


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