Regional Growth Fund still doesn’t add up…
Regeneration and Renewal, and this blog in particular, has previously (November 2011) questioned government’s approach to Regional Growth Fund (RGF) and their claims for its effectiveness and value-for-money. There is virtually no transparency in the process by which applications have been appraised and approved, and scant assurance on the manner in which jobs created/safeguarded and private sector leverage have been calculated.
With bidding for the next round of funding (worth up to £1billion) due to be launched in February, it is now an appropriate moment to return to government to demand a transparency and accountability for RGF decision-taking and implementation that matches their rhetoric and purported values.
The announcements last week of a further four awards throws no further light on the questions surrounding RGF. Three of the awards – amounting to 98% of the amount allocated – are Round One decisions made in April 2011. There has been much criticism of the length of time it takes between RGF ‘decision’ and completion of due diligence and confirmation of grant. If it takes 10 months (and longer for those round one successes still awaiting approval) to verify an application, one has to question the original decision-making process and the basis upon which some bids were passed and others rejected.
Looking at such details as government and the companies have made available also throws up issues. The largest award – to E2V of Chelmsford – is of £6.25m, leveraging an apparent £3.70 of other investment for every £1 of RGF invested. This is significantly below the much publicised 5:1 ratio lauded by Nick Clegg as evidence of the value for money of the fund. The second largest announcement of £1.69m is to Bentley, and boasts a £2.70:£1 ratio and, according to the company web-site is to maintain and enhance skills of the existing workforce, whilst the DBIS press notice couples this with increasing job numbers. One Round Two success received approval – but this is for a relatively modest £200,000 and is only a component of the much larger Leeds City Region proposal rather than for the complete package.
The current position on RGF, therefore, remains as before:-
- The criteria for success remain unclear and inconsistent (and the feedback for at least some unsuccessful applicants has been minimal)
- The appraisal process both for initial ‘success’ and for due diligence is lengthy
- The benefits in terms of job numbers – both direct and indirect – and for private sector leverage remain to be proven
- The conditionality of the awards (e.g. if job numbers, leverage or indeed other factors change during the life of the project) has not been announced
Government should choose to address these issues seriously and thoroughly concurrent with the launch of the February bidding round. LEPs should demand this. And potential applicants deserve it.
