Majority to receive hill farming support in coming weeks.
Around 11,500 hill farmers and crofters should have received letters in the last few days informing them of arrangements for payment under the new National scheme for delivering the Less Favoured Areas Support Scheme (LFASS).
The flawed IT delivery system installed by Scottish Government meant that this vital pot of funding to beef and sheep farmers, which traditionally arrived in mid-March, faced significant delays.
In response to a request from NFU Scotland, Scottish Government has taken the welcome decision of establishing a national fund to deliver LFASS, by-passing the new computer system. The national fund allows Scottish Government to pay out support based on claims made in the last scheme year.
This means that a significant majority of claimants to LFASS will receive the bulk of support due under the scheme with a balance to come later in the year. That will inject vital funds into struggling cash flows and help the wider rural economy.
NFU Scotland understands that around 7700 business, where their claims have changed little between 2014 and 2015, will receive 90% of their 2014 payment through the national fund. The 1400 businesses that qualify for the minimum LFASS payment of £385 will receive 100% of payment. Those previous claimants with significant changes to their applications will receive 50% of 2014 payment until claim details for 2015 have been sorted out. However, for those making an LFASS claim for the first time, the minimum payment of £385 will be made, with the remainder of the claim coming as a balance later in the year once the claim has been verified.
As this is a national scheme, a key issue is State Aid. As it is only the interest component of the national payment, rather than the principal sum, that is viewed as State Aid, NFU Scotland believes that State Aid considerations will only affect a few LFASS claimants. However, it should be noted that acceptance of the terms is a self-declaration that the State Aid limit is not breached.
Commenting on the scheme, NFU Scotland’s Director of Policy Jonnie Hall said: “In response to our request, Scottish Government’s creation of this national pot to deliver support into Less Favoured Areas both recognises the delivery problems generated by the new IT system and the importance of this support to our hill farmers and crofters.
“The letter may look overly-complicated but as this is a national scheme, Scottish Government has legal obligations to meet and makes the inclusion of technical detail necessary. The main thing is ensuring that it delivers 90 percent of the £65 million budget to the sector by the end of the month as planned.
“In terms of operation, we understand that as it is a national scheme, Scottish Government must charge notional interest as it is essentially an advance. Scottish Government officials have confirmed that individuals will not have to pay interest. Scottish Government would cover any interest charge that might apply, and that would be considered as State Aid.
“In short, for the vast majority, there is no action needed and welcome support from the national fund should arrive in a few weeks’ time with a balance to come later in the year. If you want to receive LFASS support sooner rather than later, then don’t opt out.
“As it is a national scheme, State Aid is a consideration and I would urge all claimants to look at the list of previous State Aid schemes to assess if they may be affected. Given the rolling ‘de Minimis’ ceiling of €15,000 per business over three years, only a few are likely to be caught.” Ends
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