In 2010 Michael Heseltine came to a Downtown event and waxed lyrical about the newly launched Regional Growth Fund.
This new financial pot would be available to businesses that were looking to grow and employ more staff. Essentially it would be aimed at the SMEs who are the crucial drivers of the UK economy, and the fund would be business friendly in terms of its processes and delivery, and as free from bureaucracy as it could possibly be.
Four years later and Hezza will be as disappointed as anyone at the latest report on the progress, or rather lack of it, of the RGF.
The National Audit Office has revealed that more than three quarters of the fund remains unspent, with only £492m of the allocated £2.6bn actually reaching business. The average cost of creating or safeguarding a job now stands at £37,400. And of the £917m paid out from the fund at the end of December last year, £425m is being held by intermediaries.
Bad though these statistics are, Downtown members’ experience on the ground is what is really concerning about RGF. Far from being ‘red tape free’ as the former Deputy Prime Minister intended, those companies who have applied to the fund have found it one of the most challenging and bureaucratic routes to finance.
Of those who didn’t give up part way through the cumbersome process, the few companies that were eventually successful have had to wait an age for their money, and have never received the business support and mentoring that was supposed to be part of the package.
Small and medium enterprises also question why companies such as AstraZeneca, Jaguar Land Rover and Lloyds Banking Group are being supported through a fund that was promoted and marketed as support for them.
What should have been a really positive and innovative addition to business support is turning into a bit of a damp squib. I hope Michael Heseltine and his government colleagues review how this important initiative can be shaken up and put back on track. The economy may be improving, but growing businesses still need all the help they can get.