Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (November 1st 2011) blasted Government industry and treasury ministers for the way in which firms are being asked to wait for ‘an inordinate time’ to receive their successful bids under the Regional Growth Fund so as to allow for ‘due diligence’ and also for the fact that the costs of this process are borne by the firms – this reducing the value of their grants.
Tom said “I tackled the Chief Secretary to the Treasury, Danny Alexander, about this on the floor of the House this afternoon, and was told by him that due diligence ‘takes on average 4-6 weeks’. How this can be squared with the fact that local and regional firms given grants in the first round last April are still waiting for the proverbial cheque in the post, I cannot comprehend.”
“Worse still is that whilst no-one would disagree with recipients of public monies being subject to due diligence, what is wrong is that this process appears to be netted by the Business Ministry from the actual grant. This is bonkers, allowing as it does, for these funds to be eaten away by expensive and probably overpaid lawyers. We have all seen cases of public expenditure where legal costs were almost as high as the actual project costs, and I fear that the same could happen here.”
“I feel strongly that the entire Regional Growth Fund structure and process should be looked at to make it fit for purpose – and there will soon be unemployed staff from the old Regional Development Agency who could well show how this could be done!”