North misses out on European regeneration cash
Jan 19 2009 by Adrian Pearson, The Journal
THE Government was last night accused of snatching up to £60m intended for the North East as part of a European financial recovery package.
Originally Brussels offered the North East around £500m for regeneration, and had at first said any money not spent by December would be lost.
But with recession threatening to put millions out of work across the continent, commissioners granted a six-month extension for bids for the money, with up to £60m still available.
The Government has turned down the cash for the English regions because it would have to match-fund any spending – but incredibly has approved the European Regional Development Fund money for Scotland, Northern Ireland and Wales.
In effect, the decision by ministers means the North East will miss out on a six-month £120m spending spree with cash spent on business loans, arts projects and Newcastle’s growing science sector.
Last night Liberal Democrat MEP Fiona Hall said: “North East England has always struggled to get the kind of funding it deserves from central Government.
“It is ridiculous that the region has been denied these funds because the Government doesn’t think the money can be spent within the set deadlines.
“This is a poor excuse and a smokescreen for a money-grabbing Government trying to find funds from anywhere to help settle its problems.
“It is more likely that the Government has realised that any unclaimed money can be taken off the UK’s contribution to the EU, going right back into Whitehall pockets, rather than being spent on projects vital to the North East.”
The European Commission told The Journal the cash extension was intended to help regions suffering in the slump.
A spokesman said: “This is not a black and white case, there are good and perfectly valid reasons for the UK Government to not spend this money but equally it was an important decision taken to benefit countries alongside our economic recovery package.
“We have a situation where during the downturn there is not much money around and very difficult conditions facing businesses. The Commission wants to do all it can to encourage the UK and other EU counties to keep investing in jobs growth.”
A Government spokeswoman said: “The EC’s offer came too late and was too inflexible to be used effectively. It is not free money and would incur additional costs that would take away resources from other programmes. It makes more sense for projects to focus on securing a larger share of new EU funds for current and future years.”
