A report out today shows that the scheme is 900m behind schedule in its target of attracting private investment, due to the speed of the economic recovery. 40 per cent – 750m – of allocated funds from previous rounds 1-3 have yet to be drawn down by their recipients.
Labour has set out its plans to boost regional development by devolving 30bn of whitehall cash to local authority budgets.
Umunna said: The Conservative Party came to office promising to rebalance Britains economy across all the regions with an export and investment led boom, and have failed.
They abolished Regional Development Agencies without putting in place a proper replacement and their flagship Regional Growth Fund has been mired in chaos and delay. Now the governments own figures show the scheme failing to meet its private investment target by almost 1bn.
A department for business spokesperson responded: Over the last year alone the Regional Growth Fund has more than doubled its impact and has secured the jobs it pledged to over 80,000 direct jobs have been delivered, every one of them outside London.
The amount of private sector funding leveraged has doubled from less than 1bn last year to over 2bn.
Labour has strongly criticised the coalition’s abolition of Regional Development Agencies, which were replaced to some extent by the RGF as well as local enterprise partnerships (LEPS).
Former shadow business secretary John Denham once described the RGF as a pathetic fig leaf to cover the absence of any growth strategy.”
But the Government said that the newer scheme was delivering greater value for the taxpayer.
The spokesperson added: For every 1 of Government support [for the RGF], the private sector puts in 5.50. This compares to just 65p of private money secured by the Regional Development Agencies for every pound they spent. The RGF is therefore delivering much greater value for money for the taxpayer.
This combined with the Growth Deals we recently announced is ensuring that our economy grows in a balanced way, with all of our regions benefitting from the upturn.
The RGF has so far helped 5,100 small and medium-sized businesses.