A “chaotic and total mismanagement” of the move from One North East to two Local Enterprise Partnerships has placed £724m of European funding in jeopardy, an MP claims today.
Catherine McKinnell said the European Commission cash has been delayed because chiefs in Brussels have “serious concerns” about LEPs and called on the Coalition which introduced them to take action.
Jude Kirton-Darling, North East MEP, said the delay - which threatens to drag on until the end of the year - could lead to a gap in funding and a “body blow” to the region’s economy that would threaten smaller projects with closure.
It comes as the Commission looks to allocate the next round of European Structural and Investment Funds - something the region is expected to get a £724m of - via the North East Local Enterprise Partnership and Tees Valley Unlimited - between now and 2020.
The NELEP said it was working alongside the Government to resolve the situation.
Catherine McKinnell, MP for Newcastle North and Labour’s Shadow Treasury spokeswoman, said: “The Coalition was warned time and again it was failing to properly manage the transition between regional development agencies like One North East and LEPs. These serious concerns are clearly shared by the European Commission, who simply didn’t believe the Government had put the right safeguards in place to effectively manage EU development funds.
“At a time when the North East continues to have the highest level of unemployment of anywhere in the country, it’s frankly unbelievable that Ministers could jeopardise hundreds of millions of pounds of much-needed investment for our region because of their chaotic and total mismanagement of this issue.
“And we – and other parts of England – are now left with a situation where decisions on how vital EU funds are spent in our area could be taken in Whitehall, not up here in the North East. This makes a complete mockery of the Coalition’s so-called commitment to localism.”
Projects that rely on this pot of money include Consett Business Park, in County Durham, the Vaux site redevelopment in Sunderland, The Core at Newcastle’s Science Central and the Northumberland Rural Growth Network.
Jude Kirton-Darling, North East MEP, added: “European funding is absolutely vital to the region. Any delay in the UK Government agreeing the programme with the Commission could jeopardise a lot of projects in the North East.
“A gap in European funding being available could force projects to close and investment to stall. It would be a body blow to the region.
“The Government has shown their colours when it comes to what they think about Europe but this money has the North East’s name on it and they need to act now to make sure that we get it. We need the jobs and we need the investment.”
Paul Brannen, fellow North East MEP, said: “The Government is putting investment in our region at risk and we’re calling on them to sort this out.”
A North East LEP spokesman said the body was committed to creating jobs in the region, adding: “European funding has invested in a wide range of successful strategic projects in the North East and we are clear of the ongoing importance of these funds in helping to deliver the priorities for North East economic growth as set out in the LEP’s Strategic Economic Plan.
“We are working closely with Government on informing the content and timing of project calls for the 2014-2020 funding programme, based on local priorities developed with partners.”