Nick Clegg growth fund so far behind targets it's 'scandalous'
After two years, only 5,200 of 36,800 new jobs promised for 2014 had been delivered by Regional Growth Fund
THE Regional Growth Fund designed to boost growth in the British economy has been described as 'scandalous' by Parliament's Public Accounts Committee. MPs found that business has received less than five per cent of the £1.4 billion allocated to Deputy Prime Minister Nick Clegg's job-creation scheme since it was launched in June 2010, The Times reports.
By May, the fund had generated only 5,200 of the 36,800 jobs it was supposed to deliver by 2014. Of those, only half were new jobs, and half were existing jobs "protected" from loss. Only £60m had reached businesses, with a further £240m "parked" with councils and banks over which ministers have little control. The cost per job for three-quarters of the schemes given money was £60,000, but in some cases it was more than £200,000.
Margaret Hodge, chairman of the committee, said: "Given the dire state of the economy, it is scandalous that so few projects funded by the Regional Growth Fund have got off the ground."
The Independent says the numbers will be embarrassing to Clegg, who predicted last year the fund would unleash a "snowball effect that creates hundreds of thousands of jobs" in the country's unemployment blackspots.
The government reacted to the report last night saying the Public Accounts Committee's figures were out of date. It said the fund had already "unlocked" 200,000 jobs, while more than two-thirds of projects have started.
"The fund is delivering at the pace that companies can expand and create new jobs," said Michael Fallon, the newly appointed business minister. "To rush companies into expanding before they are ready would be unsustainable and would put public money at risk."
But the withering assessment of the scheme came on the eve of a major policy announcement today by Vince Cable, the Business Secretary, who will set out the Government's business strategy and single out industries it believes can drive the economy forward.
A preview of Cable's speech suggests he will draw parallels between Britain's preparations for the Olympic Games and his scenario for business growth. "Our athletes achieved what they did because of their years of commitment and planning," he will say. "We need to take the same approach: a clear, ambitious vision, the courage to take decisions that bear fruit decades later."
The Financial Times says Cable will also push the role of 'challenger' banks such as Handelsbanken, Aldermore and the Co-operative, which he believes can play an important part in the government's plan to work around the so-called 'big four' banks to get credit flowing to small companies.