Local authority and private sector subscribers to the West Midlands Office in Brussels are considering pulling out because they do not believe they are getting value for money, according to a damning report.

Staff at the WMO, which costs #1 million a year to run, are let down by a lack of strategic direction and have no clear understanding of priorities.

The claims are in a sharply critical scrutiny committee report from the West Midlands Regional Assembly which condemns an absence of strategic planning and confused governance arrangements among public bodies.

It describes the region's relationship with Europe as "bleak" and is critical of Advantage West Midlands and the West Midlands Local Government Association. Both are said to have "singularly failed" to manage the Brussels office and are not working effectively with MEPs.

But the report was criticised by Sir Albert Bore, who chairs the regional assembly's European and International Affairs Partnership, as "a bit slanted and unhelpful".

Sir Albert insisted problems were nowhere near as severe as suggested. West Midlands chambers of commerce and business representatives were angry because they had not been asked to give evidence, he said.

However, he accepted the need for a more focused view on European priorities. "There has to be a clearer understanding across the region of what the policy agenda is and we have to align that to the regional economic strategy."

According to the 62-page report - It's Only Brussels? - The West Midlands' Relationship with Europe - key subscribers to the office are now considering pulling out.

Governance arrangements and lines of responsibility are said to have been blurred and fudged in order to avoid difficult debates that could have had an adverse effect on partnership working in the region.

The West Midlands' key aim for European engagement at the regional level is to be "seen to be engaged" rather than to identify objectives for engagement, the inquiry found.

"The means have become the end," the document notes. "We have taken evidence over a period of six months and although we understand what the West Midlands Office does, we are still not clear about why the various activities are undertaken. We are surprised that such an extensively managed organisation lacks direction. The majority of direct funding is used to support a high profile, expensive, albeit highly regarded, office in Brussels. It may be that overall resources to support this activity regionally and sub-regionally decreases in the future.

"We have singularly failed to take the European agenda out of its silo and to influence other policy areas to a significant degree, compounded by the lack of targeted accessible communication."

Inquiry members were concerned about a lack of vision or any understanding of what the West Midlands wanted to achieve from Europe. Partners had no clearly defined aims.

The office, which has nine permanent staff, is paid for by AWM, councils and private sector backers. Its website describes it as working "on behalf of a partnership of over 90 regional organisations from the local authority, business, further and higher education, community and voluntary, culture and arts, and health sectors".

"Regional partners are encouraged to share expertise, whilst becoming involved in evolving EU policy, legislation and funding programmes. The office also acts as a gateway into the West Midlands for Brussels-based institutions," says the site.

The scrutiny report was produced after a six-month period of evidence gathering from a wide range of regional, national and European organisations as well as MEPs and individuals in the field.

Assembly member Roger McKenzie, who chaired the inquiry, said: "Partners, from all sectors, need to work together to implement recommendations and to ensure that the region takes full advantage of the opportunities offered by Europe."

The inquiry's main recommendation is that EIAP and the West Midlands in Europe organisation be wound up and replaced by a new regional partnership charged with providing "clear direction" for European activity. The report was critical of a "confused" relationship between EIAP and WMiE. Officers tended to prepare very similar reports for both bodies which tended to meet on the same day, and there was also an overlap in membership.