RGF money largely unspent says financial watchdog

AROUND two-thirds of the Regional Growth Fund remains unspent, according to a report by the National Audit Office (NAO).
 
Its progress report into the first four rounds of the fund, which is designed to kick-start regional economies, found that only £492m, or 19%, of the £2.6bn allocated has reached projects.
 
A further £425m has been paid by the Government but is being held by intermediaries.

There was no regional breakdown of allocations but the report did list the ten largest awards. Birmingham City Council was the recipient of the fund’s highest value programme at £70m.

The NAO said the cost of creating new jobs through the fund has increased, however, it concedes cash is starting to get to businesses more quickly.
 
According to the report the number of jobs created or protected since the fund was set up in 2012 had increased by 22,100 to 44,400 but the average cost of creating each additional job now stands at £37,400 – up 13% since 2012.
 
And, around half of those jobs were covered by just five of the 291 schemes. The location of these projects was not given in the report. The NAO said the fund is now better managed, but stressed that the Government has a “significant challenge” to spend the money as quickly as planned.
 
Business Minister Michael Fallon told the BBC the fund was working. He said: “Over £2.6bn of RGF investment has now been allocated to 400 local projects and programmes, which is unlocking nearly £15bn of private investment and delivering 550,000 jobs.”
 
But shadow minister for small business Toby Perkins said: “This report highlights ongoing concerns over bureaucracy and delays in money getting out of the door to the businesses which need it.

“The RGF was set up to boost private sector growth in deprived areas but instead we are seeing areas and regions held back.”