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Brussels to fine UK government £155m

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The UK Government has been hit with a £155m fine for irregularities in the handling of its European structural funds with the communities secretary Eric Pickles pledging to review how the Brussels cash is managed.

The Department for Communities & Local Government accounts for 2009/10 show the European Commission is to hit the UK government with the fine for irregularities in the handling of European Regional Development Fund cash.

In a statement DCLG said the fine, which stemmed from irregularities in the handling of the 2000-2006 ERDF round, was the consequence of a failure to keep proper records or using funding inappropriately.

DCLG said: “The department is challenging these issues robustly. But where there is no convincing case, the EC will impose financial penalties on the government for these failures of monitoring and, where the misspent funds can’t be recovered from projects, the taxpayer will bear the loss.”

Mr Pickles said “mistakes” and a “failure to manage properly the use of public funds” meant the government would likely need to find £155m to pay back to Brussels.

Mr Pickles said: “This mismanagement ends now. I’m urgently reviewing how we manage and distribute these funds to make sure the taxpayers have confidence that their money is not being wasted.”

The 2000-2006 round of ERDF cash was managed by the Government Offices for each region, but the current 2007-2013 round of funding is managed by the regional development agencies. However, with the coalition government committed to abolishing all the RDAs, it is unclear how ERDF will be managed in the future.

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