Growth fund criticised as wasteful
A fund to boost economic growth which is in line to funnel �10m to Lotus in Norfolk has been criticised by the National Audit Office for spending money wastefully.
The Regional Growth Fund (RGF) was set up in 2010 to provide finance for businesses to expand and create new jobs. So far �1.4bn has been allocated to 219 schemes, including the pledge to give Lotus �10m. There is �1bn left to allocate.
But in a report the National Audit Office (NAO) has said not all of the projects given money so far offered good value for money in terms of the number of jobs they would create.
The NAO explained the cost to the taxpayer of providing a single job on some schemes was �4,000, but at others it was as high as �200,000.
The report concluded that had ministers applied tighter value for money controls, thousands more jobs may have been created from the same resources.
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NAO head Amyas Morse said: 'The Regional Growth Fund, which was set up to support growth and jobs in areas that rely on the public sector, could result in 41,000 additional jobs. However, some of the funding was allocated to projects that offered relatively few jobs for the money invested.
'To achieve better value for money from the further �1bn now available, the government should develop more challenging targets for the number of jobs projects should generate relative to their cost.'
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Business secretary Vince Cable defended the RGF but said ministers had already put in place some of the NAO's recommendations.
The NAO refused to say whether they had specifically assessed the Lotus grant. Whether the firm receives the money depends on whether its new owners, DRB-Hicom, decide to maintain UK operations.
South Norfolk MP Richard Bacon said: 'The RGF money is definitely a good thing for Lotus. It is a great regional presence and is incredibly important to the future of the local economy.'