The Regional Growth Fund is slated

In a number of blogs covering the Government’s flagship Regional Growth Fund (“RGF”) over the last year we have brought to the public’s attention the ludicrous overhead structure including the cost of the Board of Directors and executive staff, the expensive regional offices and the constipated approvals process.

In a submission by the Institute of Chartered Accountants in England and Wales to an all-party Parliamentary inquiry the depth of the problems are shown to be even more serious than even we predicted. The main concerns are:

a) a lack of understanding among officials at the Department for Business, Innovation and Skills (“BIS”) resulting in excessive costs and a lack of growth.

b) a lack of consistency in the way in which applications are considered.

c) the BIS’s lack of understand of the assessment process and an above average turnover of staff.

d) a catalogue of errors, lost documents and excessive bureaucracy.

Their spokesperson said:

“Because of their lack of experience and knowledge, the inefficiencies will have an impact on beneficiaries’ access to funds.”

Last May the National Audit Office said the RGF had not prioritised “value for money” and criticised some of those facilities that had been approved.

The Parliamentary Group have also echoed these concerns saying:

“We are frustrated that developments have been slow and where progress is made it is often reversed.”

The Labour shadow minister for regional growth, Gordon Marsden, said that

“unacceptable delays have dogged the scheme and led to businesses waiting well over a year for funds to arrive.”

From the very beginning of the formation of this ill conceived fund we argued that the real problems would be exactly what is happening now:

1) a lack of accountability (because the Directors and senior executives have watertight contracts)

2) a lack of effective performance.

The UK economy is moribund. The story of the RGF is one reason why. Who will be held accountable?

All answers please to Vince Cable, Minister of State for Business, Innovation and Skills.

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