Civil service professionals' union, Prospect, has alleged £1.2bn of European funding will be lost owing to the government's quango cull and Whitehall claw-backs.

Prospect deputy general secretary, Dai Hudd, dismissed the coalition's announcement of savings from its abolition of 106 quangos and merger of an additional 90 as a ‘smoke and mirrors exercise' – claming most staff had had to be transferred to other organisations because the work still has to be undertaken.

Branding the abolition of the regional development agencies (RDAs) as ‘the most outrageous example of the Government's false accounting', Mr Hudd claimed £1.2bn of funding from the European Regional Development Fund had gone begging in the 2007-13 EU funding round since their demise.

Hudd explained that without match funding, which the RDAs had previously provided, EU payments will not be made.  ‘The Treasury claws back two thirds of any EU underspend so the money will now go into the Treasury's coffers rather than to promote investment and jobs in the English regions,' said Mr Hudd.