Flagship projects under threat from EU fund crisis

Flagship projects under threat from EU fund crisis



Tom Gordon

The Herald



Scores of major regeneration projects in the west of Scotland are at risk because of European aid falling short of demand by £190m.


About 60 are planned across Strathclyde on the assumption they can receive a total of £220m from Brussels. However, only £30m is left for Strathclyde in the relevant ‘Objective 2’ funding stream, half of which has already been earmarked.


Councils, education colleges, and economic forums, which are the main recipients of the money, will be told of the over-subscription problem in the coming weeks. Among the projects which could miss out on cash from the European Regional Development Fund are the £800m Ravenscraig regeneration scheme in North Lanarkshire, a £350m plan to redevelop the SECC in Glasgow, and a £235m scheme to revive the former John Brown shipyards in Clydebank.


Glasgow City Council is also hoping to put ERDF money towards its new £40m riverside museum on the Clyde, while Scottish Enterprise is looking for support for the Clyde Gateway development next to the M74 extension in South Lanarkshire and the east end of Glasgow.

Almost all of the 19 further education colleges in Strathclyde are believed to be preparing business cases to relocate or refurbish their sites.


In the past, up to 50% funding has been available from this Euro fund for basic infrastructure work in such cases, allowing greater public and private investment to follow. Although there is no sign yet of projects collapsing, the lack of a previously reliable funding source is bound to put a severe strain on business plans, prompting a scramble for alternative money.


Last month, it emerged the £100m City Dock project in Glasgow, which would create 1000 jobs, was in turmoil because of problems obtaining £7m ERDF. A more widespread shortage may increase pressure on the Scottish Executive to help fund projects itself.


Laurie Russell, chief executive of the Strathclyde European Partnership, which ad-ministers ERDF on behalf of the executive in Strathclyde, said the very success of the programme had led to a ‘potentially huge over-subscription’ problem.  ‘We are in a dilemma over where the money goes over the next three years … there will be a range of agencies which will be disappointed,’ Mr Russell said.


Objective 2 money is intended to help areas of industrial decline. Although other parts of Scotland are also eligible, levels of spending have been greatest in Strathclyde, particularly in and around Glasgow.


Richard Lochhead MSP, the SNP convener of the Scottish Parliament’s European committee, said that there would be a ‘lot of anxiety’ among applicants and the executive may wish to look at applications ‘and, rather than allow them to fall by the wayside, see if there are any other means for them to proceed’.


An executive spokesman said: ‘The West of Scotland Objective 2 programme was outlined for six years in 2000 based on a single sum of money. All public authorities have been made well aware of how much money is available to spend.’


For many public bodies in Strathclyde, the current round of funding could be their last opportunity to land a major regeneration grant from Brussels, with the EU having to spread grants eastwards to help its 10 new states leaving Scotland hundreds of millions of pounds poorer in the next round.


Source: The Herald, www.theherald.co.uk