Auditors attack ‘scatter-shot’ urban policy

Date: 29/03/01

By John Shelley

THE Court of Auditors has branded the European Commission's €900-million effort to regenerate run-down urban areas as inefficient and poorly monitored.

In a special report, auditors say the EU's Urban Programme was implemented in a "scatter-shot" way and question whether there was any need for it to exist.

"These projects could, in the Court's view, equally well have been carried out under existing community measures, thus avoiding the creation of new procedures and expensive management structures," said Jan Karlsson, president of the auditors.

Under the programme, 118 inner-city and suburban areas across the EU received funds between 1994 and 1999. The cash was intended to help local authorities tackle problems including high unemployment, crime, drug abuse, prostitution, low-quality housing and economic decline.

But the Court of Auditors claims that the process of allocating money was flawed from the start.

"The Commission communications laying down guidelines for the urban initiative set numerous ambitious targets, but they are vague," wrote Karlsson in his report. "The programmes adopted also lack precise, specific objectives."

As an example, the report cites the haphazard way in which Italian cities were selected for help. The authorities invited 24 cities to submit projects but nine others also applied for handouts outside the normal procedure. This made it very difficult for the Commission to assess the applications fairly.

Appraisals of the projects were "superficial, or even non-existent, which resulted in unrealistic programming", says Karlsson.

Even once the money had been allocated, the report reveals, there were several failures in the implementation and monitoring of the way it was spent.

The auditors say administrative structures created to hand out the cash were often "disproportionate" and in others the management of schemes was given to private sector companies, resulting in possible conflicts of interest.

"Indeed, in Greece, one of the programme management companies was also a programme beneficiary," said the report. Karlsson criticises the Commission for opting for too many small projects rather than focusing on the most needy. The programmes were consistently behind schedule, he adds.

The Commission says it accepts there were shortcomings in the implementation of the initiative, but points out that measures have been put in place to improve the management of the Urban II project which will run until 2006.

"The Commission believes that the conditions have been created for Urban II to fully realise its potential to add value while at the same time being more effective and simpler," says the institution's official response.

The projects that will receive Urban II funding are due to be agreed later this year.

The Court of Auditors has branded the European Commission's €900-million effort to regenerate run-down urban areas as inefficient and poorly monitored.