Regional Growth Fund cash: allocated, but unspent?
25th Feb 2014
The BBC today reports that the government's flagship scheme to boost regional economies - the Regional Growth Fund - is having difficulty getting cash delivered to local projects:
"Most of Regional Growth Fund unspent, report finds" BBC News, 25 February 2014
However Business Minister Michael Fallon is quoted in the same article hailing the success of the scheme:
"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."
While it might seem at first glance that the two are contradictory, both assessments are actually accurate and based on the same National Audit Office (NAO) report released today.
This found that while £2.6 billion of public money had been allocated to projects, by December 2013 less than half (£917 million) had actually been paid out, with the remainder still being held in government coffers. Of the £917 million released, almost half again (£425 million) had yet to reach the projects on the ground and was being held by intermediaries. This means that £492 million had actually been received by those projects earmarked as the beneficiaries.
The question of how many jobs are being 'delivered' as a result of the Fund is a more difficult one to answer. Mr Fallon's figure of 550,000 is drawn from the government's initial estimate of the impact it expects to be delivered once the full £2.6 billion has been spent.
The NAO report reports on the progress being made towards this target, and found that by December 2013 44,400 jobs had been created or safeguarded as a result of Regional Growth Fund investment. This represents 62% of the total that is due to be delivered by the end of March this year if the scheme is to remain on track, although the report also acknowledges that the data quality was poor.
While much of the coverage of this report has focused on whether the scheme is a success or a failure, the NAO itself is more circumspect, saying only that the administration of the scheme is improving, but that it faces "significant challenges" to meet its targets.