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A briefing note prepared by officers for local MPs warns that the result could be a breakdown of trust between the RDA, the local authority and the community. Britain could continue to receive billions of pounds of European money and enjoy greater flexibility in how it is spent under proposals set out by the European Commission. The options are revealed in the commission’s newly adopted second report on economic and social cohesion, which considers the shape of structural funds once new member states have joined the current 15. Launching the report, commissioner for regional policy Michel Barnier pointed out that if today’s Objective 1 rules were applied to an enlarged European Union, half the population currently covered by Objective 1 would lose its benefits.

The serious poverty of some should not eclipse the serious difficulties of others,’ he said.‘On the contrary: the problems faced by current and by future member states will be dealt with in parallel. The paper suggests four scenarios for Objective 1 after 2006, three of which attempt to ensure that current members’ most needy regions still get funding. These are a temporary‘phasing-out’ grant; the possibility of raising the GDP threshold at which regions could call for help; and a two-tier approach with separate thresholds of eligibility for current states and the new members.

The report also asks whether employment rates should be considered in the new criteria, pointing out that many of the current Objective 1 regions still have high unemployment. The report suggests that the commission could grant governments a freer hand on how the cash from other parts of the fund is spent – such as the Objective 2 money for areas facing industrial decline. It maintains that state aid rules – which killed off the UK’s Partnership Investment Programme – should continue to be rigorously upheld.

Arlene McCarthy, Labour MEP for the north west and spokesperson on regional policy for all MEPs, said this approach would allow UK regions the flexibility to use resources according to their own regional strategies, to take account of pockets of deprivation and changing regional circumstances. London Development Agency chief executive Mike Ward told a conference this week that while the agency was unlikely to be a‘general funding body for the entire range of voluntary sector activity’, it would resist government moves to divert it from social regeneration. Read more : Sydney Property Valuers