Book Description

Despite the large sums available for promoting economic growth locally, little money has actually reached businesses. Of the £3.9 billion that has been allocated in total to these initiatives, only nearly £400 million had made it to local projects by the end of 2012-13. Under the Regional Growth Fund, the largest of the schemes, the Departments will need to spend £1.4 billion this year, compared to the £1.2 billion spent over the previous three years. Some £1 billion of the remaining £3.5 billion allocated to initiatives is currently parked with intermediary bodies such as local authorities, Local Enterprise Partnerships and banks - and the rest with the Departments. The Departments should introduce binding milestones for distributing funds and move quickly to claw back money not being spent - or spent disproportionately on administration - and redistribute it to better performers. Progress in creating jobs is falling well short of the Departments' initial expectations. The Departments' estimate of the cost per job created has also risen from £30,400 in Round One to £52,300 in Round Four - a 72% increase. The Departments also agreed that there is a risk of double-counting, with the same jobs scored more than once to different initiatives. The local growth initiatives have not been managed as a coordinated programme with a common strategy, objectives or plan. The recent creation by the Departments of a single growth directorate and a programme board is welcomed. Concern remains however that the Departments are not yet using the new oversight arrangements effectively.