Regional Growth Fund
Business, Innovation and Skills

Tom Blenkinsop (Middlesbrough South and East Cleveland, Labour)

To ask the Secretary of State for Business, Innovation and Skills what the likely net cost will be of each additional job generated by rounds 1 and 2 of the Regional Growth Fund; and what the average cost was of an additional job created by a regional development agency in England between 2002 and 2007.

Mark Prisk (Minister of State (Business and Enterprise), Business, Innovation and Skills; Hertford and Stortford, Conservative)

holding answer 23 May 2012

The net cost per job for the Regional Growth Fund (RGF) was £32,000 in round 1 and £34,000 in round 2. As set out in the NAO Regional Growth Fund report published on 11 May, the detailed appraisal process is in line with HM Treasury's Green Book and reflects good practice. As set out in the NAO Regional Growth Fund report, the average cost per net additional job generated by Regional Development Agencies occurring as a result of spend between 2002 and 2007 is £28,000, with wide variation between schemes.

It is important to note that the NAO report sets out that it is difficult to benchmark RGF cost per net additional job against the cost per net additional job of similar previous programmes because evaluations do not contain strictly comparable information. However, the report stated that based on the information available, the RGF cost per net additional job is similar to the cost per net additional job achieved by programmes with comparable objectives.

Comparing the impact of the RGF with the impact of the RDAs is difficult for a number of reasons. The RDA schemes and the RGF schemes occurred during very different points in the economic cycle and the remit of each was very different, with the remit of the RDAs being much wider. Furthermore, as there are some differences in the approaches taken to assess net benefit it is also worth comparing RGF and RDA spend in terms of gross impact:

Over the period 2002/03 to 2006/07 the RDAs invested £8.7 billion of public funds which leveraged £5.7 billion of private sector funding and created or safeguarded 502,281 jobs.

Over the period 2011/12 to 2013/14 RGF is expected to invest £1.4 billion of public funds which will leverage £7.7 billion of private sector funding and create or safeguard approximately 330,000 gross jobs.