EU red tape blamed as region set to miss out on spending decision

Lord Ahmad called for the money spent by the EU on growing poorer regions’ economies to be given back to the UK to cut out the “middle man of the European Commission”.

The EU is expected to spend around £600m between now and 2020 in Yorkshire as part of pan-european efforts to narrow the gap between the poorest and wealthiest regions.

It had been thought that Local Enterprise Partnerships (LEPs), local bodies that bring together councils and business to improve the local economy, would take a leading role in deciding how
and where the money will be spent.

But the Local Government Association (LGA) revealed last week that, outside London, the role of LEPs has been downgraded and officials in Whitehall will take the final decision on which projects benefit.

In the last round of EU spending, regional development agencies such as Yorkshire Forward took the leading role but they were scrapped when the Coalition came to power.

Communities Minister Lord Ahmad said: “This Government is decentralising power
and funding down to local communities. We have scrapped unelected regional quangos, and reconfigured the programme based on local economic
areas.

“However, we are hindered by rigid and bureaucratic European Commission red tape, which has a nasty sting in the tail with UK taxpayers facing EU fines for not following the fiendishly complex rules.

“The LGA want local areas to shoulder no liability for EU
fines, and have complete freedom to spend the money how they
see fit – unfortunately, the
EU is no friend of localism. It would be far better if structural funds were repatriated – and the United Kingdom had its
money back, cutting out the middle man of the European Commission.”

Structural funds go into projects designed to speed up growth in the region’s economy.

The last round saw investment in better transport links, faster broadband, university facilities and support for new and existing businesses.

The funding is seen as
an important tool for unlocking wider investment as it is typically used in combination with
Government or private sector money.

The revelation that Whitehall had quietly taken control of structural funds came
just days after the Supreme
Court ruled the Government had acted legally when it took
European Union money originally destined for Yorkshire and
allocated it to Scotland and Wales.

In a narrow four to three decision, the Supreme Court justices ruled Business Secretary Vince Cable had acted within his powers.

It is thought the move has cost the region around £50m.

Yorkshire MEP Linda McAvan and Wentworth and Dearne MP John Healey, who have both campaigned on EU funding, last week described the shift of decision-making from Yorkshire to Whitehall as “kicking our region when it’s down”.

The EU money is designed to help the economy in the regions grow through investment in roads infrastructure, broadband, university facilities and support for business.