Clegg stands by the Regional Growth Fund

DEPUTY Prime Minister Nick Clegg has defended the track record of the Regional Growth Fund (RGF) which has been criticised for distributing cash slowly and being too bureaucratic.

In February the National Audit Office (NAO) said only a fifth of the £2.6bn from the first four rounds had reached successful projects.

Speaking to TheBusinessDesk.com Mr Clegg said the slow start was to be expected for a new fund.

“When you have to use that money responsibly, because it’s taxpayers’ money, you have to go through due diligence and make checks. It took a bit of time to get that right, we’ve got that right now. There were also a number of cases where applicants changed their minds and that’s out of the hands of the Government.”

He added: “The NAO also gave the RGF a clean bill of health in terms of governance and said that we’re getting good value for money. Every £1 invested is being matched six times by the private sector. It’s a very good ratio. For every £1 we spend we unlock huge amounts of private sector investment which helps deliver the overall objective to create and sustain jobs in parts of the economy that have been too reliant on the public sector in the past.”

According to the NAO report the number of jobs created or protected since the fund was set up in 2012 was 44,400 but the average cost of creating each additional job by the fourth round was £37,400.

Mr Clegg said the cost fell to £10,000 per job in the fifth round and added: “What’s more important is, are we more than matching the investment from the private sector? Which we are, by six times.”

Mr Clegg was in the North West to mark the fifth round of the fund. Amongst the beneficiaries was Prescot-based home appliances manufacturer Glen Dimplex which has been awarded £3m to fund future growth. It was one of seven companies in the North West that received a total of £23m.

He also visited Knowsley-based electrical cable manufacturer Tratos which received £3m in the fourth round to expand its factory.