Local Action Group
The Local Action Group is a legal form of public-private partnership at a local level that operates through the drafting of a Local Action Plan, which is as an ensemble of actions and goals that valorise and develop a specific rural territory. The Local Action Group is a European tool included in the Programme LEADER+, aimed at promoting and strengthening, through financial contributions managed by the Local Action Group itself, the development of the rural areas of a given a territory, as a form of regeneration to stimulate and create new employment. These forms of association aim at involving the social and economic levels in the definition of new territorial agricultural development strategies and could define the guidelines that are then reworked by the Local Development Plans, which are approved by the Region in question and that allow to obtain the financial support of the European Union. Pursuant to article 32 paragraph 2 point b) of the EU Regulation no. 1303/13 the Local Action Groups are composed of “representatives of the local public and private socio-economic interests in which, at a decision-making level, neither public authorities nor any single interest group represent more than 49% of the voting rights”. They should thus be considered as an actual form of public-private partnership.
This model has been particularly exploited in Italy where there are about 192 Local Action Groups – and it has been the subject of interesting case law. In particular, with the ruling of the 24th of January 2018 no. 488, the section III of the Council of State has addressed the topic of the potential classification of the Local Action Groups in terms of public-private partnership, by focusing on the “decision-making level” concept. In this case, the Council of State has confirmed the Lombardy Regional Administrative Court’s decision that rejected the claim of annulment presented by some of the excluded companies of the Executive Decree (Decreto Dirigenziale) concerning the “Lombardy’s Rural development project 2014-2020. In support of the local leader development”, with which the conditions to obtain financing were identified. The Region argued that one of the appellant, since it is a limited company with a single member, was not compliant with article 32 par. 2 point b) of the EU regulation no. 1303/13, which states that the Local Action Group must have a public and private participation, and therefore could not be considered as a real example of PPP. The appellant claimed that the mentioned article should have been read in light of the national provisions of law regulating the company’s bodies, according to which the Local Action Group’s decision-making level concerning the strategies of local development and the projects that must by approved for funding must be identified within the Board of Directors and rather than within the shareholders’ meeting. The appellant’s thesis has been refuted by both the Regional Administrative Court of Lombardy and by the Council of State during the appeal. This latter subject has stated that in a Local Action Group the “decision-making level”, in substantive terms, must be intended as the body that actually decides the local development projects with a collaborative approach that must be approved by the institutions competent for the EU financing, namely – with reference to the case in question – the Shareholders’ Meeting. For these reasons, the Council of State has ruled out that the appealing single-member company could be an example of public-private partnership, since it does not have a public and private associative feature.