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HOW TO USE A BILLION IN EU SUPPORT

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Parsimony and cross-departmental red tape mean that UK regions miss out on EU aid, Oliver Morgan writes in a detail...
Parsimony and cross-departmental red tape mean that UK regions miss out on EU aid, Oliver Morgan writes in a detailed analysis in The Observer (Business, p2).

The government's failure to explain how it will match some£3.2bn of European Objective 1 funding for the country's most deprived areas with UK funds puts at risk an estimated£1bn of the money. And the issue extends beyond Wales, where the issue precipitated the resignation of Alun Michael as first secretary.

Merseyside, South Yorkshire and Cornwall are the other areas wondering whether the money is coming from - if it ever does.

The debacle, says the analysis has been brought about by a classic recipe for chaos: too little money, too much bureacracy. The article details the problems of the regions in finding match funds from underfunded RDAs, local authorities and special government

programmes - while providing evidence of the lack of 'joined up government' across Whitehall departments, who eventually have the money - or EU credits since the UK is a net contributer to the community budget - but it is not linked to the individual projects it will eventually be spent on, nor to the regions where it will end up.

Meanwhile, Rhodri Morgan, the Welsh first secretary-in-waiting, has promised to get tough with chancellor Gordon Brown over funding from London to secure Objective 1 European Union aid.

The Western Mail (p1) reports that Mr Morgan said he would not stint in securing an agreement from Mr Brown on match-funding.

He said: 'The treasury is a difficult body to negotiate with, as are treasuries everywhere. You just need patience and will-power to get on with it.'

Assembly members are expected tomorrow afternoon to name Mr Morgan as the full-time replacement for Alun Michael, the former first secretary.

He will then begin in earnest the search for stability to ensure that the motion of no confidence that brought about Mr Michael's downfall will not be easily repeated. He again refused yesteday to rule out a formal coalition with the six-strong group of Liberal Democrats in the assembly in an effort to shore up Labour's minority adminisration.

But he said: 'My reading of the signal from the Liberals is that they don't want it and the same would apply to us, I think.'

More likely is an informal arrangement which would help build trust between the parties. If that worked well Mr Morgan would not rule out a coalition in the future.

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