25.02.14
Most of the Regional Growth Fund remains unspent – NAO
The government is likely to struggle to spend the Regional Growth Fund as quickly as originally expected, according to a new National Audit Office analysis.
It says DCLG and BIS have “improved the governance” of the scheme and taken on more skilled staff, and sped up the process of making final offers to bidders.
But with the Fund set at £1.4bn for 2014-15, there is a “significant amount of public money to allocate”. Achieving value for money will depend on the departments being able to further tighten controls on the jobs and other benefits that bids offer, relative to their cost.
The Public Accounts Committee earlier raised concerns that the cost benefit threshold for projects has been set at too low a level. It has since been revised to 2:1 before final offer letters are signed.
The NAO said: “The average cost of each net additional job at the point of selection increased substantially in the third and fourth bidding rounds, bringing the average cost from £33,000 in rounds one and two to £37,400 now (an increase of 13%).”
About £492m has now reached projects, but most of the Fund remains unspent.
The total number of jobs ‘created or safeguarded’ has reached 44,400. But the NAO added: “Just under half of the jobs to date were created or safeguarded by only five schemes and the other half were delivered by the remaining 291 operational schemes in rounds one to three.”
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