A watchdog has criticised a government fund which is set to create 10,000 new jobs in the West Midlands for offering poor value for money.
The National Audit Office concluded each job was costing taxpayers £33,000 on average to create.
And it warned that in some cases the Government was spending £200,000 to create one new job.
It published the findings in a report about the Regional Growth Fund, which was set up by the Government to provide up to £1.4 billion to businesses across the country.
The aim is to help private businesses create new jobs to replace those lost in the public sector as a result of spending cuts.
Firms that have benefitted so far in the West Midlands include Alstom Grid UK , Bosch Thermotechnology Ltd, Jaguar Land Rover, Aston Martin and others.
The fund is expected to create more than 10,000 jobs in the West Midlands directly, and to safeguard or indirectly create another 64,000 in the region.
Nationally, up to 328,000 jobs will be created or protected by the fund.
The Birmingham Post has also received £5 million for the Trinity Mirror Midlands – Birmingham Post Business Growth Fund, which will provide funding of £10,000 to £100,000 to small and medium-sized enterprises and start-ups in the Birmingham, Solihull and Coventry areas that are able to provide up to 50 per cent match funding.
The National Audit Office report said: “Value for money was not optimised because a significant proportion of the Fund was allocated to projects that offered relatively few jobs for the public money invested.
“Applying tighter controls over the value for money offered by individual bids would improve the Fund’s overall cost-effectiveness.”
Responding to the report, Margaret Hodge, Chair of the Committee of Public Accounts said: “The Regional Growth Fund will doubtless do some good work in creating new private sector jobs in areas of need which have traditionally depended on public sector employment.
“However, I am concerned that, out of the 328,000 jobs the Government promised to secure with the Fund, the NAO reports that only 41,000 are real additional jobs to those which would exist without the Fund. This raises serious concerns about whether the Fund is providing value for money.
“And it is truly shocking that in some cases creating a new job will cost the taxpayer over £200,000.”
Business Secretary Vince Cable said: “The National Audit Office’s report recognises that the Regional Growth Fund is working.
“It shows that the Regional Growth Fund is set to create and protect 328,000 jobs for people in communities that need the most support and help companies grow. It shows that our processes are robust, competitive and un-biased. It shows
that we chose to support the highest quality bids offering best value for money.
“We have already put in place some of the National Audit Office’s recommendations such as making more administrative resources available, which means projects are being processed even faster. Round three will create thousands more jobs, and businesses have until June 13 to submit their bids.”
Lord Heseltine, chair of the Regional Growth Fund’s Independent Advisory Panel said: “The National Audit Office report shows the positive impact that the Regional Growth Fund is having on some of the most disadvantaged parts of England.
“The report clearly states that 328,000 jobs will be created or safeguarded by companies like Bentley, Bridon and Haribo. Regional Growth Fund awards are conditional on these employment benefits being delivered.”