The Communities Secretary, Eric Pickles MP, today pledged to end the mismanagement of the European Regional Development Fund (ERDF).
The Communities and Local Government accounts for last year, laid today, show the extent of the financial irregularities in the administration of the ERDF by the previous Government. The failure to ensure compliance with EC rules has left a bill for more than £150 million to be picked up by taxpayers.
EC Auditors found instances where projects allegedly failed to keep proper records or used the funding inappropriately. 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 has to bear the loss.
"The 'financial irregularities' which have been reported mean that we are likely to need to find up to £155 million to pay back to Europe.
"This mismanagement ends now.
"I am urgently reviewing how we manage and distribute these funds to make sure taxpayers have confidence that their money is not being wasted. And I will be pressing the EC Commissioner about the needless bureaucracy which holds up the money from being spent to kick start the recovery in Britain."
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