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Agri Business

Govt transfers €150m in Brexit funding to post-Covid fund, to be spent in part on retrofitting

The Taoiseach said the Government “would have liked” to spend the money on businesses and the agricultural sector, but that it faced obstacles in doing so.

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THE GOVERNMENT IS to transfer €150 million of EU funding from the Brexit fund – aimed at sectors including agri-food and fisheries – to the Covid Recovery Fund, where a sizeable chunk will be put towards retrofitting, according to the Taoiseach. 

Speaking in the Dáil this week, Leo Varadkar said that the Government “would have liked” to spend the money from the Brexit Adjustment Reserve (BAR) Fund on businesses and the “agricultural sector”, but that it has come up against a range of obstacles in doing so. 

The amount being transferred represents 20% of the €1.165 billion Ireland secured from the EU to help businesses, local communities, the agri-food sector and fisheries cope with the impact of Brexit. 

The EU Covid Recovery and Resilience Fund (CRRF) was set up to help EU countries recover economically from the Covid-19 pandemic. 

The CRRF is unique in that the payment to countries is conditional on them fulfilling pledged reforms and milestones that will make their economy more resilient. 

Ireland’s plan is worth just under €1 billion, and its pledged reforms centre on green transition, digital reform and job creation. 

Retrofitting already features in a range of the pledges Ireland has made, including working out the financial framework for a low cost residential retrofit loan scheme, and the commencement of retrofit works on public buildings. 

Builder installing insulation between in a ceiling of a building. Sizeable chunk of transferred funding will be put towards retrofitting Alamy Stock Photo Alamy Stock Photo

Year-end deadline

A spokesperson for the Department of Public Expenditure and Reform (DPER) said that the Government has opted to transfer a portion of the BAR funds to Ireland’s Recovery and Resilience Facility (RRF), with the intention of spending it on initiatives that will fall into line with the EU’s plan to reduce the dependence of member states on Russian fossil fuel imports. 

The spokesperson explained that the reason why the funds are being transferred is down to concerns that the money will not be spent on time, as it had to be spent between 2020 and the end of 2023, and also because of “the UK Government deciding not to impose custom checks on EU imports until the end of this year”. 

Therefore, they said, the transfer of €150 million from one fund to another has been done with the intention of “mitigating the risk that Ireland would not be able to fully spend its BAR allocations within the eligibility period”.

They added that “at the same time”, this allowed “for additional new measures to be funded by the EU in the period up to 2026 that are well aligned with Government objectives to invest in energy efficiency and reduce dependence on foreign fossil fuel”. 

Sinn Féin’s spokesperson on Agriculture Matt Carthy said that there will be “understandable anger” amongst small farmers and those in the agri-food sector that a large portion of the BAR fund money is being transferred, to be spent on other initiatives. 

“I was in the European Parliament when we campaigned to get the lion’s share of this BAR funding, and we used the stories of farmers, fisheries, and local businesses to secure it.

“It is hugely disappointing that this Government has decided to now transfer  €150 million of that money out of the fund, without coming up with a strategy to use it to help the farmers, and communities that it was meant to help. 

“If the political will was there to see this money directed towards the agricultural sector I have no doubt that it could be. With a bit of thought and creativity it would not have been that difficult. 

Carthy added: “It is typical of this Government that they managed to find a way to give a €100 million of the Brexit funding to meat factories and other processors, but they have not even tried to direct this money towards farmers who are struggling.”

Taoiseach questioned

Independent TD Richard O’Donoghue asked the Taoiseach in the Dáil this week why the funding was being transferred, when it was supposed to be spent in support of “Ireland’s economy” in order to “mitigate the impact of Brexit”. 

Leo Varadkar said that the Government “would have liked” to spend a lot of the BAR funding on helping businesses and the “agricultural sector”, but that to do that it would have to “demonstrate that those businesses have lost their profits, and gone into the red solely as a consequence of Brexit”. 

Richard O'Donoghue wearing a suit and tie speaking in the Dáil chamber. Dáil Éireann 22 Mar 2022 and Leaders Questions are written on the screen. TD Richard O'Donoghue questioning the Taoiseach on EU funding allocation on Wednesday Oireachtas TV Oireachtas TV

Varadkar added that this is a difficult feat considering the “increased trade that’s occurred between Britain and Ireland”. He said that a lot of the BAR funding has been spent on upgrading port facilities, and on the fishing industry. 

In response to O’Donoghue, Varadkar said that the Government has opted to transfer the money into the European recovery fund:

You can’t spend that on housing… but you can spend it on retrofitting, and that is one of the things we’ve decided to divert the funding to. 

“That will be of benefit to the construction industry because it is the same people that carry out a lot of that work”.

Ireland was the biggest beneficiary of the BAR funding in the EU, but one of the smallest beneficiaries of the EU recovery fund. 

It is not yet clear what other initiatives the €150m being transferred from one fund to the other will be spent on yet. 

A DPER spokesperson said that the Department is considering a range of potential investment and reform proposals with the Departments of Environment, Climate and Communications, Finance and Taoiseach’s, which will be “subject to negotiations with the European Commission”.

Analysis by Noteworthy, in collaboration with journalists around Europe, found that many states, Ireland included, have repackaged old promises as part of their pledged recovery reforms.

Ireland’s carbon tax promise is an example of this. The government committed to raising its carbon tax by €7.50 annually, which was already a longstanding government commitment with cross-party support.

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The Journal and its investigative unit Noteworthy are part of the Recovery Files – a pan-European research project investigating the Recovery and Resilience Facility, initiated by Follow the Money in 2021.

Find out more and help support the Irish contribution to this project HERE>>

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