Business secretary Vince Cable has defended his department’s Regional Growth Fund (RGF) following a National Audit Office (NAO) report that says better value for money could be achieved.
The RGF was set up to support growth and jobs in areas reliant upon the public sector, and the initial £1.4bn “could result in some 41,000 more full-time-equivalent private sector jobs”, notes the NAO. This represents a cost of around £34k investment per job.
Cable says: “The NAO’s report recognises that the RGF is working.” He also notes the RGF’s emphasis on job protection as well as creation, saying it was designed to create and protect 328,000 jobs.
Amyas Morse, head of the NAO, comments that “some of the funding was allocated to projects that offered relatively few jobs for the money invested”.
She adds: “To achieve better value for money from the further £1bn now available, the government should develop more challenging targets for the number of jobs projects should generate relative to their cost.”
The NAO report adds that “it has taken longer than expected to turn conditional offers of grants for projects into final offers. Therefore, despite the government's intention to get projects up and running quickly, only around a third have so far received final offers of funding.”
Cable adds: “We have already put in place some of the NAO’s recommendations such as making more administrative resources available, which means projects are being processed even faster. Round three will create thousands more jobs
, and businesses have until 13 June to submit their bids."