Why SNP ministers are reportedly set to hand back £450m of EU funding to Brussels

The Scottish Government is reportedly set to hand back 28 per cent of European structural and investment funding in was given in the last six years after being unable to spend the cash on economic and anti-poverty projects.

The Sunday Times reported that schemes to help employment, education, training and social inclusion as well as initiatives aimed at supporting small and medium-sized businesses are included in the areas to lose out on funding.

Wales is set to return nine per cent of its funding, England six per cent and Northern Ireland two per cent.

The programme is set to close this month, meaning the funds are set to be unspent and will need to be returned to Brussels.

According to EU data, Scotland has already returned €199 million from the fund, and has now been unable to spend another €331 million that formed part of the six-year programme - equaling almost £451 million at current exchange rates.

Jackie Baillie, Scottish Labour’s deputy leader, said: “Our NHS is in crisis, child poverty is stubbornly high, and economic growth is sluggish — that the SNP government is handing back half a billion pounds of funding while Scots face crumbling public services and infrastructure is a dereliction of duty and negligence on a remarkable scale.

“Vital projects across Scotland are being left high and dry while the SNP allows vital funding to slip away. Scots should not pay the price of SNP incompetence.”

Douglas Ross, Scottish Conservative leader, said: “This is waste and negligence on an unforgivable scale. The SNP have poured half a billion pounds down the drain.

“This funding could have been spent on vital infrastructure across Scotland, yet SNP incompetence has lost it for good. This is up there with the ferries scandal when it comes to the SNP government wasting taxpayers’ cash.”

The funding project was replaced by the UK shared prosperity fund following Brexit.

It was reported that Scotland has been suspended from applying for the funding pot on five occasions. A 2105 EU report stated a suspension had occurred because of “deficiencies in first-level management verification, audit trail” and “irregularities regarding eligibility of expenditure, rules on audit trail”.

In 2019, the EU said in a separate report that “inadequate verification of public procurement procedures and related expenditure; lack of verification whether declared costs relate to actually delivered services/achievements” caused another suspension.

But Mr Swinney said that "almost all of” the outstanding expenditure “will be spent”.

He added: “The EU funding programmes have not reached their conclusion. They will reach their conclusion over the next 12 to 18 months.

"My expectation will be that almost all of that funding will be spent and essentially dealt with as a consequence of the EU programme.”