European state aid rules has today been reaffirmed by Hilary
Armstrong, minister for local government and the regions,
Commenting on the environment, transport and regional affairs select
Programme, PIP, today, Hilary Armstrong said:
'The government attaches a high priority to the physical regeneration
of contaminated or derelict land and buildings and is determined to
find a new way of delivering the type of projects which had
previously been supported by the Partnership Investment Programme.
'We were disappointed when the commission ruled that PIP breached the
state aid rules. We had explained why, in our view, PIP did not
provide state aid.
'However, we are now vigorously pursuing alternative approaches with
the European Commission and I am confident that we will find a
solution to this problem together. We have already agreed
transitional arrangements to allow over 300 projects to go ahead.
'We have allocated significant additional resources in the Spending
Review 2000 to help compensate for the closure of PIP. Regional
development agencies will receive an extra£60m this year and an
extra£150m next year to start to deliver key government and regional
'RDAs are also receiving an additional£350m in 2002/03, and£500m in
2003/04 on top of existing programme budgets as part of the new
funding arrangements announced in July.'
1. The Partnership Investment Programme (PIP) was operated by English
Partnerships, an agency funded by the DETR. It supported
non-commercially viable regeneration projects throughout England
where the cost of development exceeded the likely end value. In the
last year PIP provided£200m worth of support to projects,
levering in£567m of private investment, which together regenerated
1,300 ha of land, created or safeguarded 29,000 jobs, built 7,500
housing units, and created 860,000 sq. m of industrial/commercial
2. The UK government supports the commission's stance on eradicating
any abuses of the state aid rules around the community. This will
encourage fair competition which benefits the interests of British
firms in all sectors.
3. The commission's decision was published on 22 December 1999.
4. The government will abide by the commission's decision, but is
seeking to agree a new approach with the EU over the longer term.
5. The government will formally respond to parliament within the two