Cllr Gill Mitchell at the Black Rock site in Brighton

£10Million pounds lie unallocated while growth has flatlined

Sites like Rochester Riverside in Medway and Black Rock in Brighton are missing out on valuable regeneration investment because a lack of Government coordination.

Euro MP Peter Skinner is calling on the Tory-led Government to get a grip and sort out the mess surrounding EU funds for regional growth, which is putting £10million for the South East at risk.

The unallocated funds are part of the European Regional Development Fund (ERDF), which exists to boost growth and jobs regionally, particularly in disadvantaged areas.

The Government has yet to put in place a mechanism for allocating the funds, following the hasty and chaotic abolition of the Regional Development Agencies (RDAs) which used to manage the process. European Commissioners have raised real concerns that the funding could be jeopardised as a result.

If this does not take place in time, two thirds will be lost from the region and automatically revert to the Treasury’s coffers. According to the most recent government figures, £1,160m – 41 per cent – of ERDF funding for England is still unallocated.

Last month, Conservative Minister Mark Prisk felt compelled to write to local decision makers urging them to look at national matched funding opportunities given the slow progress on allocating the funds in the past year and the RDA abolition which in his own words has ‘provided an additional challenge to your work.’

Peter Skinner MEP:

“As families struggle to pay the bills and businesses fight to keep their doors open it’s shocking that £10million of regeneration funding is simply lying about unused. That cash could be put to good use in Medway to provide jobs and new opportunities.

“Tory-led Government policy has given us given us record unemployment and is pushing us back towards recession. Now we discover that their shambolic scrapping of the Regional Development Agencies means this European money could be wasted. This needs to be sorted out but at the moment there is a lack of urgency which is totally out of touch with the needs of businesses in Kent.

“Labour’s five point plan would help boost regional growth now with a one year National Insurance tax break for small firms taking on extra workers and bringing forward long-term investment projects.”

Editor’s notes:

1.    Table of regional statistics –
Industrial Communities Alliance- http://www.industrialcommunitiesalliance.org/uploads/2/6/2/0/2620193/eu_funding_briefing_nov_2011.pdf
2.    The UK was allocated £2.97billion under the EU Regional Development Fund for the period 2007-13. This was previously delivered via the Regional Development Agencies

3.    Following notice of their abolition, RDAs were effectively forbidden for committing to any new projects or accessing ERDF cash.  This has left over 1billion at risk if it is not spent within the period or if the new delivery methods proposed by this Government do not meet EU Commission rules.

4.    EU Commissioner Johannes Hahn has expressed concerns that this Government’s change in delivery mechanisms for ERDF could put the funding at risk and jeopardise future projects: “Potential delays could create risks for timely project implementation, with implications in terms of potential loss of funding … The situation is therefore being closely monitored.”
Johannes Hahn  in ‘Brussels fires warning over RDA abolition’ Allister Hayman, Local Government Chronicle – 29^th September 2010 http://www.lgcplus.com/briefings/services/economic-development/brussels-fires-warning-over-rda-abolition/5019873.article

5.    Mark Prisk wrote to all Local Management Committees for ERDF funding on 8^th December to suggest the take up of national matched funding opportunities in light of the RDA abolition. Progress on this so far has been minimal with only 1 of the 50 first round bids to the RGF successfully applying for ERDF matched funding and only 12 from the 139 in round two.

6.    If ERDF funding is not fully allocated in time before the end of 2013, two thirds will automatically revert to HM Treasury under the terms of the UK’s rebate.

7. Labour’s five point plan – http://www.labour.org.uk/plan

In the South East, the plan would mean:

• 5,000 jobs for our young people
• The building of 4,000 new homes.
• A temporary reversal of the VAT rise, giving families with children a £450 boost,
• And it would give up to 329,000 small firms across the region a tax break if they take on extra workers.