Councils in South Yorkshire have lost a long-running legal battle aimed at winning a bigger share of European funding targeted at hard-up regions.
Sheffield, Rotherham, Barnsley and Doncaster authorities challenged a decision by Vince Cable to slash their share of a six billion Euro budget by 65 per cent.
But they have failed to convince the Court of Appeal that the Business Secretary acted in an ‘irrational’ way.
Mr Cable announced in March 2013 that funds designed to prevent poorer regions from lagging behind would be hugely reduced over the next seven years.
South Yorkshire councils joined forces with Merseyside to argue that Northern Ireland and Scotland were being favoured unfairly and that Mr Cable’s calculations were seriously flawed.
They insisted the cuts took no account of the ‘actual economic needs’ of the two English regions and produced ‘discriminatory and disproportionate’ results in regions struggling to cope with industrial decline.
In February a High Court judge ruled Mr Cable had failed to comply with legislation enshrined in the Equality Act 2010.
But Mr Justice Stewart nevertheless dismissed the councils’ challenge and refused to re-open the debate.
The Court of Appeal has now upheld that decision.
The country’s top civil judge, Master of the Rolls Lord Dyson, said the councils’ arguments were ‘cogent and persuasive’.
But he ruled that Mr Cable was entitled to a wide margin of discretion when comparing the needs of one region with another.
The judge said the Secretary of State had allocated the EU funds ‘in a careful and systematic way’ and had given ‘particular consideration’ to the position of South Yorkshire and Merseyside.
A spokeswoman for Rotherham Council said the result was ‘very disappointing’.
She added: “We will be examining the ruling in detail.”