EU funding aimed at reducing economic disparities between regions is at risk because of the lack of match funding which formerly came from Regional Development Agencies.
The European Regional Development Fund (ERDF) is a valued source of money for large regeneration and small business development schemes alike. It has supported many modest projects to boost enterprise or support small businesses as well a major schemes including the Eden Project in Cornwall, the Kings Dock redevelopment in Liverpool and the Sage concert hall and Baltic art gallery in Gateshead.
The ERDF can only be used to part-fund projects and member states have to provide match funding. The abolition of the Regional Development Agencies removed the main source of match funding for ERDF sponsored projects, and the economic downturn has curbed alternative options for match funding even further.
The Communities and Local Government Parliamentary has called on the Government to deliver on a promise to make it easier for development projects to secure match funding through the Regional Growth Fund. Ministers must recognise the problems that ERDF projects face and set aside RGF money specifically for this purpose.
Clive Betts, Chair of the Communities and Local Government Committee said: “There is a pressing need to spend each region’s ERDF allocation before 2015, but unless ministers take urgent steps to deliver on the Government’s promise to make it easier for projects to secure match funding through the Regional Growth Fund, there is a significant risk that value for money will suffer and ERDF will not make the impact it could to help rebalance the UK’s economy.”