A flagship European Union funded project to get 16,000 young Brummies into jobs and training has underspent by £15 million - prompting accusations of mismanagement.

Birmingham City Council launched the £50 million Youth Employment Initiative with great fanfare two years ago claiming it would be a major breakthrough in getting under 30s off the dole.

Two-thirds of the money was to come from the EU, via the Department for Work and Pensions (DWP) and the other third from Birmingham and Solihull Councils.

But now, with the project soon to be wrapped up, it has emerged that only £35 million has been secured and 9,600 young people helped - although despite missing out on a third of the funding Labour council bosses hope to help the full 16,000 by next summer when the project wraps up.

The project was beset with problems from the start, when early attempts to find agencies to deliver the employment and training programmes, failed and no compliant bids came forward - putting the scheme back by three months.

Find thousands of jobs here

Conservative shadow cabinet member for job and skills Ken Wood described it as ‘a botched process’. He said: “The real shame here is that the failings in procurement have undermined some of the excellent work being done by the council’s skills officers and our local partners to engage young people not in education, employment or training.

“The Labour led council are quick to blame a shortage of funding for all their problems but what we have here is money being sent back to Brussels because they could not manage to spend it properly. That is money that should have been invested in the young people of Birmingham, helping them to improve their skills and find employment but due to Labour mismanagement it isn’t.”

But Labour cabinet member for jobs and skills Brett O’Reilly defended the position and said they will get the same results with less money - providing a saving for the tax payer.

Cllr O’Reilly said that the council’s contribution was reduced by £5 million as a result of both general budget cuts and the discovery that money invested in helping homeless young people get on their feet was no longer eligible.

Cllr Brett O'Reilly

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The council was supposed to get £2 for every £1 it invested, so by not being allowed to include the £5 million, they have lost a further £10 million costing the project £15 million in total.

Cllr O’Reilly said: “There have been a number of things which have impacted on this including changes in eligibility criteria and a lack of clarity from the DWP - these are issues which have been felt nationally, not just here in Birmingham.

“But this does not mean that we are not going to be working with the full 16,000 young people. Our partner organisations have shown good will and remain committed. Much good has come out of the project and we will continue that work through further schemes.”

Among those working on the scheme have been the Prince’s Trust, University Hospital Birmingham and Transport for the West Midlands, as well as local colleges and training providers.