Regional Growth Fund: Thin paper, big cracks
The Regional Growth Fund has become a flagship initiative for the Coalition Government. Not only does it signify a departure from Labour’s regional agenda, thereby tickling the fancy of Tory councillors up and down the country, but it’s one of the few measures outlined in today’s CSR that is actually focussed on investing in jobs and growth.
It was therefore significant to see the RGF increased by £400m and extended by another year in today’s CSR announcements. We welcome the increase in funding and the extension to three years, the Government clearly recognising the concerns raised about the short term scope of the RGF in its original inception back in June. However, on closer inspection the RGF looks particularly underwhelming.
For starters, its £1.4bn over three years compares unfavourably with the same amount previously allocated per annum to the soon to be abolished Regional Development Agencies. What’s more, £890m of this funding is being taken from the local government budget which is seeing a 27% cumulative reduction over the period of the CSR.
The RGF will be targeted at funding private sector job growth in communities that are “too dependent on the public sector”. So these will be the very communities that are set to suffer the worst public and private sector job losses resulting from the cuts, where the private sector has a record of underachievement and where local government budgets are being slashed.
More detail about how the fund will operate and who will be able to access it (confusion reigns over the exact role of Local Enterprise Partnerships) when the White Paper is published later this year. But the RGF is beginning to look like increasingly thin paper covering over some enormous cracks.