EC commissioner Bruce Millan is becoming increasingly convinced that the legal conditions for the distribution of grants are still not being met, as the government is still not allowing European grants to be additional to local authority funding.
A broad range of councils are affected, the FT reports. Cornwall CC is building a £10 million road with a 50% grant from the government and 25% from the EC. But once the project was under way it learned that the government was not forwarding half the EC allocation.
Barnsley MBC says it has environmental and industrial development projects delayed by grant wrangles. The council's economic development director Richard Davies said: 'We have had to cram three year projects into a few weeks because it has taken so long for the funding to come through. The bottom line is that the Treasury has been taking the money away from local authorities'.
His office says up to £1 billion earmarked for the UK has yet to be disbursed and could be lost if not committed to regional development schemes by the end of the year.