Regeneration projects could be axed after it emerged ministers face £285m worth of fines for “financial irregularities” relating to European-funded projects, the Conservatives have said.
The fines have been accrued by the Department for Communities & Local Government (DCLG) for, among other reasons, failing to follow procurement rules and not providing enough supporting documentation to account for expenditure, the Tories said.
The regeneration and business programmes concerned were funded by the European Commission’s European Regional Development Fund.
Shadow Communities secretary, Caroline Spelman, said: “Having to pay out almost £300m in fines will mean more cuts to regeneration and business support when firms are struggling and the public coffers are empty.
“Rather than trying to bury this scandal in the small print of financial accounts, Labour Ministers need to come clean and make a public full statement on this sorry tale of incompetence.”
DCLG has already paid out 51m euros (approx £40m) in fines to the European Commission for financial irregularities in regeneration projects.
A DCLG spokeswoman denied it would have to pay anything like the full sum quoted by the Tories.
”These claims are misleading and distort the current situation - as we’ve seen with previous audits we do not expect to repay anything like these amounts and it’s premature to be speculating about any impact,” she said. “We have been responsible and prudent to plan for all eventualities and been completely transparent throughout, having openly published these estimates in our accounts. It’s right the EC makes these routine checks into how European money is spent, as it’s doing with other Member States, and it has welcomed our action to tighten up monitoring of programmes.”