The North East has been praised for bucking the trend amid claims the Government’s flagship regional growth fund is wasting millions of pounds.
A heavily critical report has warned that the job creation fund favoured by Deputy Prime Minister Nick Clegg is beset by delays and waste.
A National Audit Office report shows some £492m has now reached projects but most of the Fund remains unspent. A total of £917m of the £2.6bn funding allocated in the first four bidding rounds had been paid by the end of December 2013 but, of this amount, £425m is being held by intermediaries.
And, over the course of the fund, the cost of creating a job has gone from £33,000 in rounds one and two to £37,400 now, an increase of 13%.
However, those damning figures were not seen in The Journal’s Let’s Grow campaign, in which some £30m of regional growth fund cash was spent helping to create and safeguard some 3,000 jobs.
BE Group senior project manager Simon Allen today revealed that the average cost of a job for the Let’s Grow campaign was just £7,800, bringing in some of the greatest cost benefits in the overall scheme.
Much of this is down to the way the £30m fund is available to smaller firms, meaning that once a company has passed a rigorous application process there is confidence that the money can be spent quickly.
Mr Allen said: “That success is there partly because of the type of projects we support and also the competitive nature of the programme. We only support the best projects, only 40% get approved on average.
“And we tend to get applications from companies who do not have to spend a lot to create a big impact, maybe there is a correlation between the size of the project and its value.”
So far £25m has been awarded to 60 business across the North East. A second bid for £30m has been submitted, which would allow another two years of local business support in the North East.
Last night Liberal Democrat peer Lord Shipley praised The Journal’s fund.
The former Newcastle Council leader, now deputy chair of the Regional Growth Fund Advisory Panel, said: “The Let’s Grow programme has achieved commendable success in a relatively short time.
“Businesses across the North East have benefited from funding to support investment and jobs in sectors such as waste and recycling, manufacturing and food and drink.
“This programme is a testament to our commitment to stimulate growth across England’s regions, and a sign that the RGF is working by getting money to SMEs across England.”
Newcastle MP Catherine McKinnell, a Shadow Treasury Minister, said: “This NAO report paints a pretty damning picture of what has been the Coalition’s flagship policy for growth, clearly illustrating a complete lack of urgency by ministers to deliver support at a time when the North East still has the highest rate of unemployment across the country.”
We have made our money work hard
Success for the Let’s Grow Campaign comes in all shapes and sizes.
From film companies to bottling plants, the £30m has gone far.
Durham-based Greencroft Bottling Company received an £80,000 grant to allow it to expand and create 75 additional jobs.
And another 37 jobs were created in North Tyneside with a £250,000 grant. AIS Training will use the money to train staff at an offshore survival centre.
BE Group is responsible for all of the administration of the scheme and are accountable to the Government for its delivery while business advisers and chartered accountants UNW provide the technical support and undertake the appraisals of applications which are shortlisted for support.
The jobs created and safeguarded already include highly-skilled science and engineering jobs as well as management and administration, IT jobs and apprenticeships.
And the average salary of jobs generated so far is over £30,000 per annum.
These companies have committed to invest over £180m on exciting growth projects across a broad range of sectors.
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