Monday, 17 August 2009

Spelman calls on Labour to come clean over £300 million incompetence fines

Important regeneration and business projects face cuts to funding due to Government incompetence and financial irregularities, it was revealed today.

Hidden in the small print of the Department for Communities & Local Government’s accounts was the revelation that Labour Ministers are preparing for a record £285 million of financial penalties from the European Union, on top of £40 million of fines already paid out to date.

The fines are for financial irregularities in handling regeneration and business programmes funded by the European Commission’s European Regional Development Fund.

The administrative incompetence includes failure to follow procurement rules and lack of supporting documentation to account for expenditure. This has led to the EU auditors issuing fines to effectively claw the money back.

Caroline Spelman, the Shadow Secretary of State for Communities & Local Government, warned, "Having to pay out almost £300 million in fines will mean more cuts to regeneration and business support when firms are struggling and the public coffers are empty.”

And she stressed, "Rather than trying to bury this scandal in the small print of financial accounts, Labour Ministers need to come clean and make a public full statement on this sorry tale of incompetence."

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