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News - 25 February 2014

Regional growth fund unspent

The national Audit Office (NAO) in its progress report states that of the £2.6bn allocated via the Regional Growth Fund (RGF), only £492m has so far actually reached projects, and that the cost of creating new jobs via the fund has increased.

Stuart Coleman, Data Protection Officer at ABDS comments:
“The NAO also says that number of jobs created or protected since the fund was set up in 2012 had increased by 22,100 to 44,400. The average cost of creating each additional job now stands at £37,400 - an increase of 13% since the fund started. But the most disturbing fact arising from this report is that about half of those jobs were covered by just five of the 291 operational schemes.”

Of the £917m paid out from the fund by the end of December last year, £425m is being held by intermediaries, the report finds. Which means only 19% of the total fund has actually reached the regional projects that have submitted successful bids.

Business Minister Michael Fallon said the fund was working.
"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," he added.

However, 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."

If you need any help and advice for your business on financing, cash-flow, management accounts or business development, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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