Government failing to deliver on regional growth - MPs

Of the £3.9 billion put into coalition initiatives to promote regional economic growth, just £400m has reached projects with £1bn “parked” with councils, local enterprise partnerships (LEPs) and banks.

The Government has insisted the figures are out of date while the region’s LEPs defended their record and said the report underlined the need for Ministers to devolve power over funds to a local level rather than micromanage them from Whitehall.

The Public Accounts Committee (PAC) of MPs said the flagship Regional Growth Fund, championed by Deputy Prime Minister Nick Clegg, would need to spend more in the next year than it had in the last three to meet its targets.

PAC chairwoman Margaret Hodge said: “Despite the large sums available for promoting growth locally, little money has actually reached businesses.”

The number of jobs delivered by enterprise zones - areas created by the Government where companies are given incentives to grow - was described by Mrs Hodge as “particularly underwhelming”.

Enterprise zones were supposed to create 54,000 jobs by next year but the true figure is likely to be fewer than 18,000.

The committee also criticised the Government’s failure to co-ordinate the work of its different growth initiaves and warned there was a danger that some jobs created could be double-counted.

Humber LEP chairman Lord Haskins said: “This reflects this government’s and the last government’s attitude towards localism.

“Some money goes to local authorities, some goes to LEPs, some is managed in the centre, it’s a dog’s dinner.”

The Humber LEP, along with its Leeds and Sheffield City Region counterparts, all said the majority of their Regional Growth Fund cash had been allocated to businesses with more than half already paid out.

Sheffield City Region LEP chairman James Newman said the Government needed to “get serious about changing its culture” and trust local bodies to take decisions while his Leeds City Region counterpart Roger Marsh called on Ministers to “go further” on devolution.

Leeds Chamber of Commerce president Nigel Foster said: “If we want the whole of the UK to make a positive contribution to growing the economy and in turn creating jobs and prosperity we must see a more proactive approach from Government.”

Kris Hopkins, Local Growth Minister and Keighley MP, said proper checks had to be carried out before public money was given to businesses.

“These are old figures. Money is getting to local projects and making a real difference on the ground,” he said.

“The coalition Government’s long-term economic plan has got Britain building again and kick started local infrastructure, created jobs, and stimulated growth.”