The Local Government Association has raised concerns that the Treasury is willing to deprive local areas of around £330m of European Union funding.
The Communities and Local Government select Committee will hear evidence this afternoon into how the Department for Communities and Local Government (DCLG) manages the European Regional Development Fund (ERDF) in England.
MPs will question European Commission regional policy director, José Palma Andres, and Cllr Peter Box, chair of the Local Government Association’s (LGA’s) economy and transport group, into how the fund has worked to reduce economic inequalities, boost growth and safeguard jobs.
DCLG figures show England has received more than €5bn of funding since 2000, with a further €3.2bn slated for investment between 2007 and 2013 in local projects.
Although more than £1bn worth of the ERDF is available to local authorities between now and the end of 2013, the LGA alleges Whitehall departments have denied councils full support in unearthing vital match funding.
More than two thirds of councils fear there isn’t enough money to match-funds, and cash shortages have caused just under 60% of authority led schemes to either fall through, or be put at high risk of failure, LGA research suggests.
Smith Square also claims the Treasury appears willing to surrender around a third of the remaining ERDF money, as part of UK rebate talks.
Cllr David Sparks, vice chair of the LGA, said losing this income stream ‘could be devastating for local economic growth’.
‘Furthermore, it’s not economic sense to abandon this cash for a lesser amount in return. Town hall leaders are urging the Treasury to think again, and consider what is necessary to ensure every penny from ERDF is invested in vital projects for growth,’ he said.
