The Government’s flagship Regional Growth Fund has been condemned as “a disaster” by Labour as business leaders prepare to learn which bids have been successful next week.
Ministers received 72 bids for a total of £459 million in funding from the West Midlands – but the total sum available for the whole country is only £300 million.
Nationally, the fund is massively oversubscribed with 464 bids presented to the Department for Business, Innovation and Skills, asking for a total of £2.78 billion.
It means the vast majority of bidders are likely to be disappointed.
Ministers have repeatedly highlighted the Regional Growth Fund as a key measure to boost economies in the English regions, for example by arguing it will go some way to replacing funding previously provided by regional development agencies.
Firms were invited to bid for cash to support projects which would create jobs, particularly in regions set to suffer as a result of job losses in the public sector.
The Government plans to distribute £1.4 billion over three years, but the bids submitted so far are for the first round of funding which will provide between £250 and £300 million.
But Labour called on ministers to make an extra £200 million available. The cash could be raised by taxing bankers’ bonuses, said Shadow Business Secretary John Denham.
He said: “The demand for the Regional Growth Fund is not a success story, but rather a disaster following the cut of £1.4 billion a year of regional funding
“These figures show that regions have huge potential for growth, but that the 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.”
A Department for Business spokesman said: “The £1.4 billion Regional Growth Fund will create tens of thousands of jobs across England by investing in projects with great potential for generating new economic growth.
“We have already announced the funds available in round one may be boosted beyond the £250 million originally foreseen, due to the high number and the quality of the bids we have received. We will announce the successful bidders from this round shortly.
“The second round of the fund will open for bidding on April 12, with a much larger portion of the £1.4 billion available both to new bidders and those who are unsuccessful in round one.
"We look forward to receiving more high quality bids from the best projects that British business has to offer.”