East Midlands put at risk by ministers’ failure to act

Labour 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 £120m worth of funding for the East Midlands at risk.

The unallocated funds are part of the European Regional Development Fund (ERDF), and if they are not allocated within the time limits, two thirds of the funds will automatically revert to the Treasury’s coffers.

Glenis Willmott, Labour MEP for the East Midlands and Labour’s Leader in Europe said: “The government has yet to put in place a mechanism for allocating the funds, following their hasty and chaotic abolition of the regional development agency which used to manage the process of allocating these funds.

“While this money could be being used to support employment in the region, bring forward infrastructure projects or provide support for people facing an uncertain future, we find that instead it is being put in jeopardy because of the government’s failure to act and put in place proper mechanisms.

“I am urging the government to act quickly to ensure that this money is allocated to the East Midlands as it is intended.”

According to the most recent government figures £1,160m – 41% – of ERDF funding in England is still unallocated. Here in the East Midlands this figure stands at £120m – 50%.

Last month BIS 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 funds in the past year and the RDA abolition which in his own words has ‘provided an additional challenge to your work.’

Gordon Marsden MP, Labour’s Shadow Minister for Further Education, Skills and Regional Growth, commenting said:

“It beggars belief that when the East Midlands is crying out for cash and investment to boost jobs and growth, this government’s actions is putting £120m of potential funding at risk, and over £1 billion across England.

“It is symptomatic of the shambolic and chaotic way in which the regional development agencies were abolished, that they had no plan to allocate this cash for jobs and growth to where it is needed. There are real concerns that if the Government drags its feet longer, the money could be clawed back centrally by the Treasury.

“Ministers need to get a grip to ensure this money gets out to the English regions and helps boost growth and jobs which are flatlining as a result of the Tory-led Government’s policies. We need leadership and urgency from ministers, but instead we have seen dither, delay and uncertainty demonstrating how out of touch they have become with the needs of businesses up and down the country.”

“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.”

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