Government punished for mishandling North West ERDF

The Government was fined £17.8m by the European Commission over deficiencies in the management of European Regional Development Funding in the region.

The North West was one of six English regions to which the EC suspended payment last year, after its auditors raised concerns over "systematic deficiencies" in how the cash was managed.

Although the other five regions later saw their suspensions lifted, EC regional policy commissioner Danuta Hubner said in a statement last week that the "deficiencies that persist in one region, the North West, did not allow the EC to lift suspensions there".

A Department for Communities and Local Government spokeswoman said the fine was smaller than first proposed.

She said: "(It) is less than half the £40m initially proposed and is small compared to the £3.7bn (between 2000 and 2006) the UK received through this programme."

A spokesman from the Government Office for the North West, the signatory for ERDF until 2006/7, said: "The European Union did an audit of the 2000-2006 Objective 2 programme in the North West which excluded Merseyside. They identified some issues they weren't happy with and they have imposed a financial correction of £17.8m. No project is going to suffer as a result as the Department for Communities and Local Government is going to foot the bill.

"It was a book-keeping issue. The Government is disappointed that the Commission has decided to impose the correction but now is the time to draw a line underneath this."

The latest ERDF round, from 2007 to 2013, is being processed for the first time by the North West Development Agency.