March 8 2014 Latest news:
Wednesday, February 26, 2014
The Suffolk and Norfolk region is claiming its performance is better than a national picture suggests as the government came under fire over a fund set up to boost regional economies.
Nationally, much of the Regional Growth Fund remains unspent, according to a report by the National Audit Office (NAO) and the picture is similar in this region, where just £2.3million out of a £12m pot has so far been doled out.
The number of jobs created or safeguarded nationally since the £2.6billion fund was set up in 2012 has increased by 22,100 to 44,400.
Across the UK, around half of jobs were covered by just five schemes, while the average cost for each additional job had increased from £33,000 to £37,400, said the NAO.
But the New Anglia Local Enterprise Partnership, which covers Suffolk and Norfolk, says its tough criteria concerning jobs creation is so far paying off with each of the 408 jobs being created here through its Growing Business Fund, which comes from the Regional Growth Fund, costing an average of around £5,600 through the scheme.
New Anglia LEP is putting up a fifth of costs for each scheme under the Growing Business Fund, but insists that match-funding must be in place for the rest.
Across Suffolk and Norfolk, 26 businesses have so far been awarded grants under the scheme while two have been rejected. The LEP has so far received 320 enquiries. Some of these will be referred to other more suitable schemes if they are unable to meet the criteria, which includes an upper limit of £10,000 of grant spending per job created.
Nationally, around £492m has now reached projects, but most of the fund remained unspent, with £425m held by intermediaries, said the NAO report.
Chris Dashper, head of programmes at New Anglia LEP, said they were “ahead of the national picture”.
“The thing is, we started with an offer of just £3m back in April and it went up to £12m in October last year,” he said.
“It just takes time to work through the number of applications we have.”
He added: “I think all these schemes always take time to work up. You always need some time to develop the approach. It takes time for people to realise it’s there.”
Next week, the grant panel at New Anglia will take a view on five or six schemes looking for a total of about £1m in funding. By the time all the money in the pot has been shared out, around 1200 jobs should have been created, it says.
Nationally, the Business and Local Government Departments have both speeded up the process of making final offers to bidders, but they face a “significant challenge” to spend money as quickly as originally expected, especially in the coming year, when the budget is £1.4bn.
The Government launched the fund to support private firms in English regions, especially in areas dependent on public sector employment.
Business Minister Michael Fallon said: “The NAO report rightly recognises the steps we’ve taken to strengthen RGF by improving its governance and getting money into the hands of businesses more quickly to support economic growth.
“RGF is 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.”
The NAO report was based on the first four bidding rounds of the fund, which in total is worth £3.2bn.
Shadow minister for small business, Toby Perkins, said: “To grow our way out of the cost-of living crisis we desperately need to see better-balanced and sustainable growth across the UK’s regions, but the Tory-led government’s flagship Regional Growth Fund has been plagued by chaos and delay.
“A potentially valuable contributor to re-balancing the economy is being undermined by ministers’ failure, meaning that more than a third of winning bidders under the scheme’s first round have now pulled out entirely while others have been left waiting almost two years to receive their money.
“This report highlights ongoing concerns over bureaucracy and delays in money getting out of the door to the businesses which need it and worryingly finds that hundreds of millions of pounds have been left gathering dust in government coffers.
“The RGF was set up to boost private sector growth in deprived areas but instead we are seeing areas and regions held back - ministers urgently need to raise their game.”