West Midland firms have applied for funding of £410 million in the latest round of bids to the Government’s Regional Growth Fund.
The region’s firms have applied for more cash than those in any other part of the country.
A total of £1 billion will eventually be allocated nationwide. Total bids of £2.68 billion have been received from businesses across the country, and they are now being assessed by a panel chaired by Lord Heseltine, the Deputy Prime Minister.
The cash comes on top of £1.4 billion allocated to 176 businesses in the first two rounds of bidding, which Ministers say are expected to create and protect up to 328,000 jobs.
Ministers have defended the fund after it was criticised in a report by the National Audit Office, which concluded each job was costing taxpayers £33,000 on average to create, and some had cost up to £200,000.
The report was raised in the House of Commons by Black Country MP Adrian Bailey (Lab West Bromwich East), chair of the Commons Business, Innovation and Skills Committee, who said: “The Regional Growth Fund is the government’s flagship scheme for boosting jobs and growth in the regions.
“The recent national Audit Office report criticised it for spending too much money on projects creating too few jobs. In some cases, £200,000 per job. What is the Government doing about it?”
He was answered by William Hague, the Foreign Secretary, who was standing in for David Cameron while the Prime Minister attends the G20 Summit in Mexico.
Mr Hague said the West Midlands had already been allocated £235 million from the earlier rounds of bidding, adding: “Of course it is important that money is spent effectively, and my ministerial colleagues will do their utmost to ensure that is happening.
“But it’s also important to remember that his region benefits from so many other things the government is doing including infrastructure projects to support growth in the West Midlands, an enterprise zone in Birmingham city centre, an enterprise zone Black Country, and these measures are much more likely to get regional growth going than the excessive tax and spending of the party opposite.”
Critics have also claimed that the fund has been slow to get money to businesses. Nick Clegg, the Deputy Prime Minister, said: “This third round will continue to create jobs by unlocking private sector investment, letting businesses in Britain thrive. There has been a fantastic response from businesses bidding for a share of the extra £1 billion funding. I look forward to announcing which projects will benefit.”