Nick Clegg’s Regional Growth Fund set-up in the hope that it would create tens of thousands of jobs in the private sector and across the UK’s employment ‘blackspots’ has been slammed as ‘scandalous’ by the Parliamentary Public Accounts Committee (PAC).
The PAC claims that only 2,400 new jobs have been created since its launch in 2011 with 2,700 jobs being ‘protected’, despite the Government setting aside £1.4bn to the scheme. Out of the £1.4bn, so far it is estimated that only £60m has actually been given out to business to help create jobs whilst £470m worth of funding has been ‘parked’ in unaccountable organisations such as banks and local councils.
Given the number of jobs created to date, each job has cost the taxpayer and the Regional Growth Fund around £200,000 to create.
Committee chairwoman, Labour MP Margaret Hodge, made the following comments:
“Given the dire state of the economy, it is nothing short of scandalous that so few projects funded by the Regional Growth Fund have actually got off the ground. Some two years into the programme, of the £1.4 billion allocated, only £60 million had reached front-line projects.
The rest of the £470 million spent so far had been parked in intermediary bodies, over which the departments have limited control. It is unclear what is being done to make sure that money is not wasted but spent on creating real jobs.
At the time of our hearing, the departments could not tell us how many jobs had actually been created. They then wrote to us admitting that only 2,442 new jobs had been delivered in projects with final offers of funding in place, while another 2,762 existing jobs had been protected. That is against a target of 36,800 over the lifetime of these projects.”