Heseltine admits Regional Growth Fund is a risky business

LORD Heseltine has described the £1.4bn Regional Growth Fund he oversees as a “high risk project”.

The former Deputy Prime Minister is chairing the approval panel for the Fund which was created as part of reforms which have seen the Government abolish regional development agencies and establish local enterprise partnerships.

Lord Heseltine was speaking as part of efforts to attract bids to the Fund which will support projects that encourage private sector growth, particularly in areas heavily reliant on public sector jobs.

He said: “I should also make clear that this is a high risk project. If it was easy to create jobs in the sort of areas we have in mind the market would long since have done so.

“We will do whatever we can to secure value for tax payers money but we all know that the track record of public investment is littered with failure. We shall do our best to secure value by a close partnership with existing private sector companies.

“In truth, again as anyone experienced in the private sector knows, the private sector has a pretty mixed experience in investing in new projects. It is called risk. But the private sector buries its failure in its profit and loss accounts. The public sector rightly has to account more openly.”

The first round of bidding to the Regional Growth Fund is open with a deadline of January 21 and Lord Heseltine stressed that it would not support applications that came purely from the public sector.

Lord Heseltine said he expected the majority of project funding for schemes considered by the RGF to come from the private sector.