If you would like to receive more of news and insights from our team sign up here.
The National Audit Office’s progress report on the Regional Growth Fund has revealed a mixed picture. On the plus site the NAO reports that improvements have been made to the administration of the fund with a speeding up of the time taken from application to offer, thanks partly to the taking on of additional staff with the requisite skill levels. This has resulted in 44,400 jobs being created or safeguarded.
On the negative side, just £492m has reached projects to date although a further £425m is being held by intermediaries. This represents a fraction of the £2.6billion allocated to the regional growth fund and potentially means that projects which could contribute significantly to regional growth are not taking off in the way that was originally envisaged. Also of potential concern is the average cost per job created or saved by the fund rising from £30,400 in round one to £52,300 in round four.
The NAO considers that for the project to be deemed to be a success requires “further tightening controls on the jobs and other benefits that bids offer, relative to their cost.” This will include taking measures such as improving management information, better evaluation of performance and introducing more sophisticated targets.
If successful the fund should go some way to addressing the perceived imbalance in growth patterns between London and the regions. Those bidding for funds include banks, councils, local enterprise partnerships and others. The Royal Bank of Scotland and Birmingham City Council jointly top the list at present with funds allocated of £70m each.