Claim Scotland to give back £450m in EU funding is Half True 5

Claim Scotland to give back £450m in EU funding is Half True

European Union funding has become an unexpected part of the 2024 election campaign in Scotland, as the SNP-led Scottish Government has faced criticism over millions of pounds of reportedly unclaimed cash.

Newspaper reports, social media posts and politicians have made similar claims about the Scottish Government failing to spend funding allocated to Scotland before the UK left the EU.

SNP to hand back £450m of unspent EU money.

Newspaper reports

Ferret Fact Service looked at this claim and found it Half True.

Ferret Fact Service | Scotland's impartial fact check project

Evidence

The claim that the SNP had underspent its funding allocation from the European Union was first reported by The Sunday Times on 1 June

An article, headlined ‘SNP to hand back £450m of unspent EU money,’ claimed that the Scottish Government was expected to hand back 28 per cent of funding that was received prior to the UK leaving the union. 

The money due to be returned was “structural and investment funding,” the article said. 

What is structural and investment funding? 

Structural funding is money the EU gives out that aims to reduce economic inequalities between member states. Although the UK is no longer a part of the EU, funding agreed before the UK left has been spent in Scotland over recent years.

EU rules state that money must be spent by the end of the third year after it was allocated. So money allocated for the period from 2014 to 2020 had to be spent by the end of 2023. 

The funds still in operation in Scotland are the European Social Fund (ESF) and the European Regional Development Fund (ERDF).

The Scottish Government is responsible for managing structural funding programmes. It pays money to groups such as local councils and government agencies who then lead on specific schemes, and then effectively invoices the European Commission for the expenditure to be reimbursed.

These projects can be very varied and include funding for infrastructure, universities and local community schemes. 

How much was Scotland given? 

From 2014 to 2020, the last funding round before the UK left the EU, Scotland was allocated £401m from the ERDF and £392m from the ESF, for a total of £793m (figures have been converted to £s and rounded).

EU rules say that the money must be spent by the end of the third year after its allocation, which was December 2023. If these targets aren’t met, the amount of funding is reduced. 

Research from the Scottish Parliament Information Centre (SPICe) found that on 4 June 2024, the Scottish programmes were worth £660.3m.

This is a reduction of £132.7m in the value of the funding. The Scottish Government confirmed to SPICe that this reduction was imposed by the EU as a result of expenditure targets not being met by the end of the third year.

With the current value of the funding at £660.3m, we can see how much of that budget has been spent. 

On 4 June, according to SPICe analysis, £424m had been paid out by the European Commission, with £235m still potentially to be claimed. 

According to the Scottish Government, a request for payment of £29.3m was made in May, which had yet to show up on the statistics. This would leave at least £205.7m unclaimed from the current budget, in addition to the £132.7m already underspent.

The Scottish Government said it had committed just over £545.6m for projects, equating to 83 per cent of the £660.3m, but this had yet to be confirmed in the online portal. 

While the government seems confident that a large proportion of the overall budget will be spent, we will not know for sure the exact underspend until the programmes fully wrap up. The Scottish Government is required to make final payments to partners by 30 June 2024.

Ferret Fact Service verdict: Half True

It is clear that Scotland has underspent its allocation of money from the EU for structural funds. However, there are some allocations still to be fully accounted for, and the Scottish Government is still claiming money from the European Commission for spending that has yet to be completed, despite the end of the funding period, so the true total that will be handed out is yet to be announced. 

This claim is half true.

Ferret Fact Service (FFS) is a non-partisan fact checker, and signatory to the International Fact-Checking Network fact-checkers’ code of principles.

All the sources used in our checks are publicly available and the FFS fact-checking methodology can be viewed here.

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Main image: Scottish Government, CC BY 2.0

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