The government’s Regional Growth Fund (RGF) has come under fire for its sluggish performance by Labour’s shadow business secretary, Chuka Umunna.
The fund, which distributes business funding to growing SMEs across the country, is said to be £900 million behind schedule in its target of attracting necessary private investment.
A report on the progress of the RGF shows that 40 per cent - £750 million – of allocated funds from previous rounds of funding have yet to be drawn down by their recipients.
Despite claims from opposition parties that the coalition government had failed to deliver an export and investment-led boom, a spokesperson for the Department for Business says RGF remains effective, particularly outside of the capital.
“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,” they said.
“The amount of private sector funding leveraged has doubled from less than £1 billion last year to over £2 billion.”
The spokesperson continued by saying the RGF is delivering greater value for the taxpayer.
“For every £1 of Government support [for the RGF], 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 RGF is therefore delivering much greater value for money for the taxpayer.
“This, combined with the Growth Deals we recently announced, is ensuring that our economy grows in a balanced way, with all of our regions benefitting from the upturn.”
Image: Department for Business, Innovation and Skills
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