Regional growth fund ‘to create over 27,000 jobs’

The fund has been strongly criticised for being too slow at getting vital investment to the region’s businesses prompting Shadow Chancellor Ed Balls, speaking yesterday at the Yorkshire Post Business Club, to brand the scheme “a damp squib”.

Labour has claimed even successful bids have not received their growth fund cash and sources have told the Yorkshire Post that two of the country’s leading financial services organisations have advised tourism agency Welcome to Yorkshire against any attempt at winning investment.

However the Department for Business has hit back, claiming that after two rounds of bidding nearly £200m has been earmarked for Yorkshire, going to 31 organisations with the potential to create 27,100 jobs.

A spokeswoman insisted that four firms had received funding – 48 nationally – with “many more” close to completing their legal checks.

She added: “The regional growth fund is a success story and it is on schedule. The private investment that firms have secured has helped a third of all projects to start. There have always been checks when firms are awarded support from the government. They are important as we have a responsibility to ensure good value for the taxpayer.”

A row over the fund flared up after the Government was accused of holding back the Yorkshire economy by failing to invest in the region’s tourist industry.

It has emerged that despite the success of Welcome to Yorkshire, the agency has been advised by two of the country’s “big four” accountancy firms not to attempt funding applications because the region’s more affluent communities “balance out” areas of deprivation.

Welcome to Yorkshire has successfully moved from being funded largely through the former regional development agency, Yorkshire Forward, to a membership model. However it is understood that the agency unsuccessfully submitted a bid for £3m match funding over three years to launch a Yorkshire “attack brand”.

Mr Balls, the MP for Morley and Outwood, described the regional growth fund as “dreadful”.

“It has been a flop, a damp squib,” he said. “The Government and Nick Clegg trumpeted it as a solution, and not only has the economy barely grown since, but they haven’t even managed to get the money going out the door.

“And set against the abolition of the regional development agencies, cuts to train-to-gain and apprenticeships, and cuts to support for transport and local economic development, the regional growth fund is a mouse when what we need is a real strategy.”

Attack brands form a key part of the Government’s tourism strategy but the only one currently supported by public funds is London. More than £50m a year is also awarded to Scotland – despite revelations earlier this month that Visit Scotland will fail to hit its target for a 50 per cent boost in tourism by 2016.

The 10-year Scottish government growth plan was set in 2006, before the global economic crisis hit – although during the same tough economic period in Yorkshire the value of tourism has increased dramatically from £5.9bn three years ago to £7.2bn now, adding an estimated 4,000 jobs.

So far of the 16 named successful bids from the regional growth fund in Yorkshire, eight are public organisations such as local councils or the Government’s Local Enterprise Partnerships, and eight are private sector businesses.

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