Exclusive: Regional Growth Fund still hasn’t invested any money


1:09 pm - September 22nd 2011

by Paul Cotterill    


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Some fifteen months after the Coalition announced the establishment Regional Growth fund, aimed at stimulating the economy in “areas and communities at risk of being particularly affected by public spending cuts”, not a single penny of the Fund has been released by the Department for Business Innovation and Skills (BIS), it emerged today.

The failure to release any funds was acknowledged by Philippa Lloyd, Director of Economic Development at BIS in a reply to a Freedom of Informatio request seeking copies of all bids approved for funding under the scheme to date.

In the letter, Ms Lloyd admitted:

The successful bids are currently undergoing due diligence (apart from one which has completed the due diligence and has been provided with a final offer letter) before a final offer of funds can be made.

The failure to spend any of the £1.4bn Growth Fund budget will be a source of embarassment to the Coalition as it discusses whether or not to invest £5bn in infrastructure works as a way to promote growth.

When the fund was first announced on 29 June 2010, Nick Clegg, Vince Cable and Communites Secretary Eric Pickles were all keen to be associated with the announcement, with Clegg saying: “this fund can make a real difference to companies during difficult times.

At the time, Eric Pickles stressed the urgency of getting the Fund under way, stating that he did not want to “strangle business with red tape” and that “Urgent action is needed to rebuild and rebalance local economies so that new businesses and economic opportunities spread across the country.”

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About the author
Paul Cotterill is a regular contributor, and blogs more regularly at Though Cowards Flinch, an established leftwing blog and emergent think-tank. He currently has fingers in more pies than he has fingers, including disability caselaw, childcare social enterprise, and cricket.
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Reader comments


Umm, sorry, but why the surprise at this?

Didn’t you know that any scheme like this will be bound with red tape? That it’ll take months and months to get up and running, that it will take a year or two before any money is disbursed?

Come on, this is the standard free market stuff about why we shouldn’t have government trying to do these sorts of things. They take forever to do them…..

Shouldn’t bother to try and spend money, got it. A new low even for you. Let the economy go to hell, the Government not doing anything is more important !111%$!

Anyway, ignoring the enemies of a modern civilisation for the moment, the issue is of course the already running Regional Development Agencies were abolished and there;s been a huge capital funding gap in the middle of a recession. Not to mention the RGF’s are funding the wrong things for growth.

Leon – did you not notice that having castigated Tim for his anti government / pro free market stance, you go on to prove his point?

There are things where government is the most effective method of dealing with a problem, that “picking winners” is not one of them is something we should be aware of already.

Tim @1: I was bit surprised no money at all had been released, but no, it’s not a huge shock overall, merely useful to get it confirmed. The point of the post is te disjuncture between what Clegg and Pickles said about urgency, red tape, and replacement of public sector jobs (many now already gone) and what they really should know about government.

The point of the FOI request itself was actually to examine the extent to which projects had been selected to show maximum job ‘outputs’. Clegg was desperate to claim 100,000 jobs just before the local election, and BIS/DCLG duly delivered him that opportunity (see http://www.guardian.co.uk/business/2011/apr/12/nick-clegg-regional-growth-fund), but I suspect that this is not only a hugely inflated figure (through inclusion of indirect ‘safeguards’ etc), but that in order to get to it projects were selected ahead of more spade-ready schemes (such as the town centre scheme in my own area (Skelmersdale) which already has developer agreement and all planning stuff sorted but needed gap-funding for about 6million because of collapsed property prices).

Such was their desire to boost the outputs that they’ve even gone for at least 3 schemes which are actually grant/loan allocation projects in themselves, and will have their own level of bureacracy to go through before any money ever gets released to people who will actually spend it on the ground.

As you can see from the letter, of course, my FOI request has largely been refused because companies taking public money refuse to disclose what it’s for.

To be fair, the government is putting up to £10m as a grant into a new Tata plant at Wolverhampton to make low-emission engines for Jaguar LandRover, which Tata now own:

From Clegg’s conference speech: “With initiatives like the Regional Growth Fund, putting up to £10 million into this new plant and Enterprise Zones boosting growth across the country, we’re making the UK a better place to invest and do business.”
http://ukinindia.fco.gov.uk/en/news/?view=PressR&id=658048782

Btw in case readers missed the news, Tata, an Indian company, has overtaken BAE Systems, the armaments manufacturers, to become the largest manufacturing company in Britain. So much for British enterprise.

I know for a fact that the only Regonal Growth Fund payout has been made through a Dragon’s Den type competition in the South of England. The reason why due dilligance is taken so long? Nomally this would be done by Regional Development Agency professionals. But they’ve been sacked by Pickles and the organisations wound down.

@3 – No, because I’m not blindly bound to an ideology which requires me to squeeze my views through a particular filter for absolutely everything, as apparently you are.

The RDF’s did good work, and it was typical vandalism from the government to abolish them and to replace them with a fund which IS “picking winners”, and won’t materially help growth. I know you and your ideology can’t stand competence in government work, and it shows in cases like this.

I’m sorry that you hate this country so much that flatline isn’t low enough growth for you, and that you’re cheering on the disaster into which this government is taking the country. But that won’t stop me from condemning your views.

I have got details of the Birmingham airport bid out of bis by going to the Information comissioner,

see victory at http://www.ico.gov.uk/~/media/documents/decisionnotices/2011/fs_50397741.ashx

keith Kondakor

Good story, but not, as stated, an exclusive – reported by Local Govenmrent Chronicle on 26 August – nearly a month ahead of you chaps! http://www.lgcplus.com/briefings/services/economic-development/one-growth-fund-project-given-green-light/5034210.article


Reactions: Twitter, blogs
  1. Sebastian Hanley

    Apparently the Regional Growth Fund hasn’t released any money since winners were announced in April. Clearly no rush… http://t.co/Qx5mYNRq

  2. Andy Birss

    Regional growth fund-funding nowt! http://t.co/ibCIODT6

  3. Matthew Reeve

    Exclusive: Govt's Regional Growth Fund still hasn't invested any money http://t.co/sm2OLXC9

  4. Paul Cotterill

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  5. sunny hundal

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  6. Tudor Evans

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  7. Michael Bater

    Exclusive: Regional Growth Fund still hasn’t invested any money | Liberal Conspiracy http://t.co/27A3IF30 via @libcon

  8. Jon

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  9. Jon

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  10. Itsmotherswork

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  11. Lee Hyde

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  12. TheCreativeCrip

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  13. Brian Moylan

    RT @Bickerrecord: re: The Indy http://t.co/3czkkRpW / http://t.co/2XMwXaij< hardly surprising from #Tories given http://t.co/KAa2RN9s

  14. Tom Christoffel

    UK ~ Exclusive: Regional Growth Fund still hasn’t invested any money ~ £1.4bn – announced on 29 June 2010 – http://t.co/pnkiB4O3

  15. HarpyMarx

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  16. Regional growth fund yet to hand out any cash | Politics News and Discussion

    […] The letter was released on the Liberal Conspiracy website. […]

  17. Government’s regional growth fund yet to hand out any cash | Gov Grants

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  18. Theo Blackwell

    EXCL: Govt said Regional Development Fund would stimulate growth. FOI reveals it hasn’t invested anything 15 mths later http://t.co/0ZZLIAHv

  19. News

    Excellent. The Indy http://t.co/Sz8bYjbz has directly copied my & @sunny_hundal's @libcon exclusive from earlier today http://t.co/hBpy1dbt

  20. Paul Cotterill

    #pmqs Cameron references Regional Growht fund as central to growth strategy. Announced June '10, not a penny released http://t.co/7bqGEu5H

  21. Paul Cotterill

    Ed Miliband's #PMQs attack on Cameron re: Regional Growth Fund came directly from my FOI request http://t.co/hBpy1dbt Just saying, there.

  22. Ed Miliband at PMQs: from tactics to strategy « Though Cowards Flinch

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    […] me explain how. Last month, LC contributor Paul Cotterill revealed that even 15 months after the Coalition had announced this RGF – not a single penny had been […]

  24. Exclusive: How firms are blackmailing the govt’s ‘growth fund’ | Liberal Conspiracy

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