£3.2bn Regional Growth Fund £900m behind schedule
Labour’s Chuka Umunna to hit out at Fund’s performance with £750m of the first £1.9bn allocated still yet to be drawn down
Labour shadow business secretary Chuka Umunna has said that government’s efforts to rebalance the economy through the Regional Growth Fund have been “mired in chaos and delay”, following latest figures which show that the £3.2bn Fund is £900m behind schedule in attracting private investment.
In a report out today, the figures also reveal that £750m of the £1.9bn allocated by the Fund to date has still yet to be drawn down by the recipient businesses and organisations due to receive support.
Umunna is expected to hit out at the scheme later today and argue that Labour’s pledge to devolve £30bn of budgets to local authorities will help boost jobs and investment.
“They [government] abolished Regional Development Agencies without putting in place a proper replacement and their flagship RGF has been mired in chaos and delay.
“We know that we will need to act where this government has failed, to drive strong growth for the long-term across the whole of the UK.”
The coalition have responded with the argument that the delay in achieving their funding target “reflects the progress of the economic recovery”. It is confident that the Regional Growth Fund is delivering greater value for the taxpayer and believes that momentum is building.
A Department for Business, Innovation and Skills (DBIS) spokesperson said:
“Over the last year alone the Regional Growth Fund has more than doubled its impact and has secured the jobs it pledged to – over 80,000 direct jobs have been delivered, every one of them outside London.
“The amount of private sector funding leveraged has doubled from less than £1bn last year to over £2bn.”
“For every £1 of government support, the private sector puts in £5.50. This compares to just 65p of private money secured by the Regional Development Agencies for every pound they spent. The Regional Growth Fund is therefore delivering much greater value for money for the taxpayer.”
The Fund has so far helped to support over 5,100 small and medium-sized businesses.