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Regen schemes may be hit after EU fines Govt £230m

Regeneration schemes across the nation may face major cuts as the Government prepares to pay a fine of some £230 million from the European Union, the Conservatives have warned.

The Department for Communities and Local Government is waiting on the fine, which is expected to be handed down over "financial irregularities" in regards to the handling of regeneration programmes funded by the European Commission.

The Tories said the Brussels fine could have a "major impact" on the Government's regeneration and business programmes at a time when public finances are particularly stretched.

They added that details of the fines faced by DCLG were revealed in Parliamentary questions and the small print of Whitehall accounts.

A DCLG spokesman yesterday confirmed the department was working with the European Commission on a number of audits carried out on European Regional Development Fund programmes going back to 1997.
Shadow communities secretary Eric Pickles said: "Having to pay out £230 million in fines will devastate funding for regeneration and business support at a time when businesses are struggling and the public coffers are empty. This is a financial scandal.

"We should take no lectures from the European Commission on dubious financial accounts, but Labour ministers need to come clean over the nature of these so-called financial irregularities, and state whether this is fraud, maladministration or incompetence at the heart of Government."

A DCLG spokesman said: "We are working with the European Commission on a number of audits they carried out on ERDF programmes going back to 1997.

"These audits have not yet been concluded but we have taken prudent action to forecast any potential correction in our accounts, although there is no certainty at this stage we will have to repay anything like this amount.

"We have also implemented stronger programme and financial management systems across the UK which has been welcomed by the Commission."