Scores of projects across Scotland are still waiting for millions of pounds of vital funding to be released – seven months after the cash was frozen by European Commission bosses.
It has emerged that more than £45million earmarked to support unemployed and disadvantaged people across the country – including almost £5million owed to the Highlands and islands and Moray – remains suspended.
Council chiefs in the Highlands branded the delay as “toxic”, as they insisted it was beginning to “impact on people’s lives”.
The Press and Journal exclusively revealed last August that the European Commission had blocked the release of the money from the 2007-2013 European Social Fund because of “irregularities” in its management by the Scottish Government.
It had been expected to take about two months to resolve the problems – but the commission has now confirmed that the money is still frozen.
The issue emerged amid an ongoing row over Scottish Government delays to the processing of millions of pounds of payments to farmers owed via the Common Agricultural Policy (CAP).
The Scottish Government told commission bosses in Brussels in October last year that it had implemented a “corrective action plan” to try to satisfy Brussels that the social fund money could be released.
But EC officials have still to assess the “effectiveness” of the plan, and the money will remain frozen until it has been able to do so.
Highland Council leader Margaret Davidson launched an attack on the handling of the money.
“It’s inexplicable to me. There have always been delays in European funding but this time it’s got to an almost toxic level because it really is starting to impact on people’s lives,” she said.
“I read in the P&J about the delays in payments to farmers and the money that’s delayed that’s coming through to them. It’s the same with European Leader (Liaison Entre Actions de Développement de l’Économie Rurale) funding.
“They’ve no guidelines, no application forms, nobody can do anything. It’s absolutely crackers.
“I will say that in response to the representations that were made last year, they’ve employed some more people for the secretariat that’s dealing with this, so the (infrastructure) minister (Keith Brown) is trying to cut through it but no improvements have yet surfaced.”
Liberal Democrat councillor Thomas Prag said: “It’s down to the Scottish Government who will no doubt blame Brussels. We have to make sure this doesn’t happen again. We knew it was going to be an issue, and still we’re in this position.”
The suspended funds represent almost a quarter of the £193million earmarked for Scotland from the social fund between 2007-2013.
Last August, it emerged that Holyrood officials first reported problems with their own system for managing the mony in December, including “irregularities concerning expenditure in several operations”.
Following eight months of talks between Edinburgh and Brussels, the European Commission decided to hold back all further payments from the last funding round because “there is insufficient assurance that all the measures to rectify the problems have been taken”.
Last night, a spokeswoman for the European Commission said: “The Scottish audit authority replied to the commission suspension on 8/10/2015 confirming that an corrective action plan had been implemented by the managing authority (the Scottish Government).
“Once the audit authority has assessed the effectiveness of the action plan, the commission will re-evaluate the suspension of the funding.”
A Scottish Government spokesman said: “On CAP payments, the Scottish Government continues to make progress. As of Wednesday, almost 8,000 payments had been authorised, which equates to more than 43% of eligible claims.
“The Scottish Government is working closely with Local Action Groups to ensure the 2014-2020 LEADER scheme is fit for purpose.
“The 2007-13 European Social Fund and European Regional Development Fund programmes supported more than 100,000 people into work, created over 40,000 jobs and supported over 15,000 new businesses.
“The 2014-2020 programmes are now actively investing in activity across Scotland, including the Highlands and islands, investing over £114million to support the long-term unemployed, Scottish business innovation and helping to create more efficient, greener services in cities.”