4. asked the Minister of Finance and Personnel how he intends to ensure that European funding is properly spent without having to return substantial sums to Europe.

(AQO 291/02)

The current projections indicate that the building sustainable prosperity programme will exceed its expenditure targets, but that the Peace II programme needs to increase its rate of spending to meet the level required by its first target date of 31 December 2003.

All implementation bodies are aware of that position, and the Special EU Programmes Body will monitor the expenditure closely. I have discussed this with the Executive, the North/South Ministerial Council and the Special EU Programmes Body, and I will discuss similar issues with representatives of the intermediary funding bodies later this afternoon.

If necessary, proposals will be put to the monitoring committee about moving money from slower-spending to faster-spending measures. However, we must have some sense of the pattern of spend in the different priority areas. The Special EU Programmes Body, as the managing authority, is examining that.

Does the Minister recognise that some problems result from some of the Departments dragging their feet in spending the money? There is concern that money was misallocated the last time, so it is imperative that proper control measures are put in place to ensure that money is not squandered. Nevertheless, the Departments must create the impetus to ensure that the money is properly spent and does not go back to Europe, because Northern Ireland badly needs it.

I thank the Member for his comment, but I have dealt with many of his points. I have been monitoring the situation since early summer. I have been in touch with ministerial Colleagues. I have reported to the Special EU Programmes Body and the North/South Ministerial Council, and I will be in touch with the intermediary funding bodies this afternoon. We are attempting to ensure that spending profiles will be met on target. The first target is 31 December 2003, and everything possible is being done to ensure that it is met. I am confident that we will achieve it.

Will the Minister acknowledge that the application process could contribute to underspending of European funding, because it is bureaucratic and off-putting to small and medium-sized projects? Will he urge his Department to review the appropriateness, or otherwise, of the application process, so that projects can be accurately assessed according to their value?

As I said, I am reviewing all those matters. The fact that the Department has received 2,700 applications, many of which came from smaller organisations, suggests that the difficulties can be overcome with the assistance of the intermediary funding bodies and the Special EU Programmes Body. Notwithstanding that, I am aware that there are concerns, and they are being addressed immediately and expeditiously.