Hundreds of critical regional projects won’t get funding from the Regional Growth Fund, figures obtained by Labour reveal:
Figures obtained by Labour have shown a huge regional oversubscription to the Regional Growth Fund, with one region bidding for almost twice the amount available for the entire first round. The figures, released from BIS in a parliamentary question, raise serious doubts over the Government’s effectiveness in tackling the growth challenges faced by regions today.
Many critical projects that could drive growth won’t get any funding from the fund, which was created by the Tory-led Government following the scrapping of the Regional Development Agencies (RDA), Grants for Business Investment and the Strategic Investment Fund. The Government is allocating £1.4bn over three years to projects, two thirds less than the £1.4bn a year Labour were investing through the RDAs.
The North West region has the highest value of bids, at £577m over 89 projects, with Sheffield City having the highest value bids from a LEP area with £223m over 21 projects. With only between £250m and £300m available for the first round, hundreds of viable projects will not receive any funding.
Labour has called for the fund to be expanded by £200m this year to allow more projects to be funded, raised through a repeat of the bankers bonus tax. This would be a quick but effective way of boosting regional growth this year and help businesses create jobs.
John Denham MP, Labour’s Shadow Business Secretary, said:
“The demand for RDF funding is not a success story, but rather a disaster following the cut of £1.4bn a year of regional funding. These figures show that regions have huge potential for growth but that the Tory-led Government is refusing to properly invest in them. Ministers will have to explain why hundreds of viable projects for growth won’t go ahead across the country.
"The desire to cut too far and too fast has caused growth to be revised down and the unemployment forecast to rise, all while Government is holding back support for businesses looking for investment which will help regions to create jobs and ease reliance on the public sector. Labour has called for a repeat of the bankers bonus tax to fund the RGF an extra £200m this year, a quick but effective way to drive investment.
"The Tory-led Government need to rethink their growth strategy and invest in our regions, and get a grip on the scale of the challenge facing the country today. We cannot afford their wasted year to turn into two.”