Regional Growth Fund to give £1bn to 130 projects
Deputy Prime Minister Nick Clegg has announced how a flagship government scheme is to spend £1bn in a bid to boost economic growth in England.
The Regional Growth Fund will invest in about 130 projects "in the parts of the country that need it most", he said.
The government believes that the fund's latest round of spending will safeguard or create 240,000 jobs.
Business leaders welcomed the money, but urged the government to ensure it flowed into the projects quickly.
Mr Clegg said the projects benefiting from the latest round of spending had been selected from more than 400 applications.
Around £700m will go to private firms and a further £358m to local authorities and enterprise partnerships, he explained.
'Making a difference'
"In tough economic times the Regional Growth Fund is good value for taxpayers' money," Mr Clegg said.
"This £1bn round of the fund is pulling in £6bn of private sector investment.
"I have seen for myself the real difference this makes on the ground - from iconic businesses like Eddie Stobart expanding in Widnes and creating 3,450 jobs in the local area, to the Sunderland car parts factory Unipres, who have used their funding to buy a new 3,000 tonne press, letting them accelerate production and take on an extra 316 people.
"The Regional Growth Fund is working, on track and supporting businesses to create jobs and grow the economy."
Steve Radley, director of policy at manufacturers' organisation EEF, welcomed the announcement, but added: "The delays experienced in previous rounds must be avoided and funding must flow out to business much faster, whilst the longer-term future of the fund must also be clarified."
Director general of the British Chambers of Commerce John Longworth added: "We are pleased that the £1bn promised for the third round of the Regional Growth Fund has been allocated to projects that will spur business investment and job creation in the regions.
"However, pace is critical. Many RGF projects have been delayed by bureaucratic hurdles, meaning that they have not yet started to have an impact on the ground. Some bidders have even withdrawn, meaning that over £100m has been recycled back into the fund."
The allocation of £1bn to the latest round of RGF spending was announced by Chancellor George Osborne in the 2011 Autumn Statement.
A recent report by the National Audit Office (NAO) questioned the scheme's value for money.
Before the latest round of spending, the average cost per job created was £33,000, the watchdog said, but it could vary "from under £4,000 to over £200,000".
With more effective administration, the average cost could have been reduced, the NAO added.
Speaking in May in response to the NAO report, Labour MP Margaret Hodge, who chairs the cross-party Public Accounts Committee, said the cost of the scheme was "shocking".
"Stronger controls over the value for money of individual bids are urgently needed to prevent any more money being wasted," she said.