Your experience

This simply way really diminishes administrative burden and makes the development actions far less bureaucratic. The risk for misusing of funding is minimum, because the decision about acceptable costs and target, which should be achieved, is based on realistic and updated information and evaluation on the real plan and checked current costs.

Structural Funds (ESF and ERDF) in Finland have implemented lump sum also during the former programming period 2007-2013  and they have had really good experiences on how it made implementation simpler.

Beneficiaries have experienced lump sum method really good. It raises the trust between the administration and beneficiary. The emphasis is clearly on the targets, what is going to be achieved.

In the Finnish RDP, we are talking about measures (M01, M07 and M16 and of course Leader M19) that have more similarities with regional policy measures than farmer/agricultural measures. They are not  area based or animal unit based measures, there are not additional costs and loss of income caused by implementing these measures. On the opposite, they are voluntary based actions, based on ideas and needs raised up on from the grass roots and bring added value.

There is no need to change the basic Rural Regulation (1305/2013). Only action needed is a change in the interpretation on Act’s Article 62 (2). Article is based on area or animal based measures and it is not suitable for other development measures where there is no standard cost that could be calculated in advance even before nobody knows what is going to be developed.

At the stage of preparation of the Rural Development Programme, we (Finland) have interpreted the pre-conditions set out in Article 62 (2) of the EAFRD Regulation (1305/2013) that they should not be applied for the lump-sum and flat rate options. The article 62(2) concerns the aid granted on the basis of standard costs or additional costs and loss of income which are normally used as a basis for aid granted to farmers. Nevertheless, it is not feasible for rural development projects funded under the measures M01, M07 and M16 due to the fact that these may cover a very broad spectrum of sectors and activities in the rural areas. However, the Commission's interpretation of Article 62 (2) of the EAFRD Regulation is that the pre-conditions set out therein would also apply for the lump-sum procedure.

The Commission's interpretation is that an ex-ante calculation of costs should be carried out for every activity which would be implemented using lump sum procedure. These calculations should be annexed into the Rural Development Programme.

Rural development projects are innovative and unique in nature and their costs depend e.g. on region, beneficiaries, goal, size, activities, timeline and quality of the project. Having to use the pre-calculated cost estimation limits the possibility to use the lump option to almost non-existent.

Your ideas

(a) a brief description of the approach and/or method applied

Lump sum as it is implemented in the Structural Funds in accordance with the General Regulation 1303/2013. In the Structural Fund Programmes a project applicant may draw up an estimation of reasonable costs of the project and its justification while the decision-maker will verify that the costs are reasonable and realistic in relation to the objectives of the project. When the project is finalized, and in case it has reached the objectives, the aid can be paid to the applicant as a lump sum.

(b) its benefits:

Using the simplified cost option in this way would reduce the burden of bureaucracy as well as the work load of both the beneficiary and the administration.

We propose that there would be common rules between different ESI-Funds on similar measures. Because there are also regional policy similarities in RDP's, it would be less burdening to share also the rules (General Regulation 13030/2013)