Regional Aid Map approval
The European Commission confirmed on Tuesday a new Regional Aid Map for Ireland for 2022-2027, which has seen a reduction in the maximum allowable coverage for the country drop by 15.6%.
Regional Aid is a form of state aid funded by the Irish exchequer that can be given to enterprises to encourage investment and job creation in economically relatively disadvantaged areas. The Regional Aid Map identifies the areas within Ireland where Regional Aid is allowed under EU rules, as set out in the Commission’s Regional Aid Guidelines.
The new map, which replaces the previous map in place since January 2014, was required by the Commission’s Regional Aid Guidelines issued in April of last year.
On foot of these guidelines, in recognition of the strength and improvement in Ireland’s economy since 2014, the European Commission reduced the overall size of the population area of Ireland that could be covered by Regional Aid. This was part of a European wide review. Originally the maximum allowable coverage for Ireland was proposed to be 25.64%, but following intensive negotiations with the Commission, it will be 35.9% for the relevant period. This is compared to 51.3% previously.
INCLUSIONS
While there is a reduction in overall coverage, some or all of each county included in the previous map is included in the new map approved by the Commission. The mapping is listed by Local Electoral Area (LEA) and sees the inclusion of Dungarvan (19.5%) and Clonmel (25.3%), while Cashel-Tipperary (37.2)%, although outside the new cut off of 35.9%, has been included due to 5 strategic exclusions.
The Map has been devised using a series of objective metrics that balance need for investment with potential for growth, and is in line with priorities set out in the National Development Plan, the Regional Enterprise Plans and the Rural Development Plan.
Lismore rated 42.9%, Cahir 47.8% and Cappamore-Kilmallock 48.5%, which would have been under the previous mark (51.3%), are now excluded from the mapping. Midleton rated at 53.2%, Fermoy 62.4% and Mallow 65.8%. Letterkenny LEA, Co Donegal has the lowest percentage scoring at 0.6%, followed by Donegal LEA on 1.2%. The lowest cumulative scoring for a Munster LEA is Tramore-Waterford City West at 7%.
The Map will be reviewed in 2023 after Census 2022. Areas that did not meet the objective metrics and have been omitted from the Map, will be assisted to apply for alternative forms of State aid in the intervening period. Since 2014 there has been a total of almost €160 million in Regional Aid granted by the Department of Enterprise Trade and Employment (DETE) and its agencies, with annual expenditure ranging from €28 million to €48 million. Other Departments also run Regional Aid schemes.
OTHER AID AVAILABLE
Regional aid is funded by the Irish Government, not the European Commission. The Regional Aid map and guidelines merely provide the rules around how Regional Aid can be provided.
Only approximately 7.4% of Ireland’s State Aid is in the form of Regional Aid. Other aid remains available to enterprises, irrespective of their location. For example, enterprises may still avail of Research Development and Innovation Aid, Environmental Aid, Training Aid and Consultancy Aid, under the General Block Exemption Regulation. The De Minimis Regulation offers a further avenue particularly for smaller sized grants and investments.
A record 2.48 million people are now at work, close to the 2.5 million Government target set in the Economic Recovery Plan. In 2021, employment increased in all regions. The majority of IDA investments and majority of new jobs created by Enterprise Ireland companies were outside of Dublin.