EU funding stuck in 'bureaucratic quagmire', council leaders warn

LGA news release - 9 May 2007

The temporary suspension of EU funding worth tens of millions of pounds is threatening to hit the UK’s most deprived areas the hardest, council leaders are warning today.

Brussels has temporarily suspended tens of millions of pounds of EU funding to six regions in the UK for a period of three months because the European Commission isn’t satisfied that the money has been managed properly in the past.

The Local Government Association, a cross-party organisation which represents over 400 councils in England and Wales, is warning that the freeze could halt crucial regeneration projects in some of the country’s most deprived areas. The LGA is also calling for a cut in the scheme’s bureaucracy to make it easier to apply for and manage.

The European Regional Development Fund (ERDF) is worth around £600m a year. The UK is the fourth country to have ERDF funding frozen with similar action having been taken against Spain, Greece and the Netherlands in the past. Payments to the UK will resume in around three months time if the UK and the government are able to satisfy the Commission over how the money is being spent.

Cllr David Sparks, the LGA’s spokesman on Regeneration, says: “It’s totally unacceptable that tens of millions pounds of money for some of the country’s most deprived areas should have become bogged down in this bureaucratic quagmire.

“This needs to be sorted out before these areas suffer. This deeply worrying delay threatens to hold up regeneration projects in areas that may rely on this money. The real problem lies with the hugely complex regulations to which the government and councils have to adhere. The red tape and bureaucracy must be cut. The fact that the UK is the fourth member state to have funds frozen shows that the EU standards can be incredibly difficult to follow."

“Rules that are less complicated would make sure that money gets to where it needs to be. Complicated application procedures can also discourage organisations from applying for funding in the first place. Councils create places where people can thrive and they must be given the freedom to spend money in the best interests of local people.”

ENDS

Contact: Nick Mann, LGA Media Office, 0207 664 3187