Funding available for diversification projects

Some people are still unaware that they may be able to apply for government funding to help financially with their diversification project. The LEADER program is one such scheme and was set up as part of the Rural Development Program (RDPE) and provides grants to cover up to 40 percent of the total project costs.

LEADER is an EU grant scheme that provides grants for rural projects that will benefit the local area economically and socially. Until the UK leaves the EU the scheme is open to both businesses and non-profit organisations in England.

What areas are LEADER funding priorities?

  • Support for Micro and Small Enterprises and Farm Diversification
  • Support for Rural Tourism
  • Support for provision of Rural Services
  • Support for Increasing Forestry Productivity
  • Support for Cultural and Heritage Activity

LEADER provides grants of between £2,500 and £170,000, although this varies depending on the project location. For businesses this can cover a maximum of 40% of the total costs and therefore the other 60% must be covered by another source (loans, savings etc). Grants are paid in arrears so applicants must be able to fund the project through to completion.

Job creation is an important priority for LEADER and the larger the grant you are applying for the more important job creation becomes. There are no strict rules on how many jobs you must create for a set amount of grant but very roughly you should work on the assumption that for every £25,000-£30,000 of grant funding you apply for you would need to create one full time equivalent job. This doesn’t necessarily mean you need to create one position; it could be broken up into multiple part-time positions. It can also include an increased number of hours for existing staff, the owner of the business or their family.

Initially you will need to contact your local LEADER team and have a chat with them about your project. They will then be able to send you all the relevant guidance and also send the Expression of Interest (EOI) form. Your EOI application will need to include details of your proposed project, what you would like funding for, and how your project will directly impact your business and the wider area. You will also need evidence of a need for the project in the local area – i.e. do you have a waiting list of people hoping to use the service. Finally you will need to show that the project will not take business away from another existing business in the local area. Your EOI application will be checked for eligibility and scored by the LEADER admin team on factors such as how the project meets local priorities and value for money.

If you are successful at this stage you will then be asked to complete a Full Application form. This is a longer version of the EOI form and requires you to go into a lot more detail, provide quotes and essentially provide a business plan. This is then again checked for eligibility and will be given to your Local Action Group (LAG). The LAG is made up of 12-15 individuals who live and work in the local rural community and they will use their local knowledge and expertise to assess whether the project fits in in the local area and therefore whether you should receive funding.

You should also bear in mind that some of the funding is provided by the EU, and it is currently uncertain how Brexit will affect this, as such, if you are considering a diversification project, now is definitely the time to start serious laying your plans out.

How a feasibility study can help with a LEADER application

Click here to view the list of LEADER Local Action Groups in England

Click here to view the LEADER EOI application form