This issue has been in the ether for some time. In the 1990s £13 million out a total of £190 million of EC grants to the UK was, according to the Commission, spent wrongly but not fraudulently. The EC will not impose fines but requires the return of the money which was incorrectly allocated.

In 2005 EC auditors reported management weaknesses and ineligible spending in some projects in the Highlands and Islands. Highlands and Islands Enterprise was the responsible authority for managing four of the audited projects and admitted at the time that it was facing investigation.

In 2006, then First Minister Jack McConnell told the Parliament that the EC claims would be vigorously contested.

Among the projects funded by EC money allocated to Scotland from London during the 1990s were:
a new car ferry at Corran, south of Fort William which was granted £1.06m from the European Regional Development Fund; mobile phone coverage; the Nigg docks in the Cromarty Firth; and the Cairngorms funicular railway.