By politics.co.uk staff
Only £60 million of the government's £1.4 billion regional growth fund to help boost the economy has reached frontline projects, it has emerged.
The Commons' public accounts committee's chair Margaret Hodge said it was "nothing short of scandalous" that such a small amount of the total had been distributed.
Its report published today is deeply embarrassing for Vince Cable's Department for Business, Innovation and Skills, which was allocated £1.4 billion to distribute to competing projects in last year's two bidding rounds.
The government has actually paid out £470 million so far, but most of it has been 'parked' with intermediary bodies.
Only 5,200 jobs have been created so far as a result of the regional growth fund – a fraction of the government's 36,800 target.
"For projects to count as value for money under the rules of the fund, the economic benefits simply had to outweigh the public cost," Hodge explained.
"This low threshold allowed projects to be selected that offered at best marginal benefits for the taxpayer. While the cost per job was £60,000 or less in three-quarters of the projects, in some cases it reached over £200,000."
New business minister Michael Fallon protested that the report's findings were based on a hearing which took place in May – and that real progress had been made since then.
"Above all, as the NAO found in May, the regional growth fund is good value for money delivering approximately £6 of private sector investment for every £1 of public money," he said.
Richard Bacon, the senior Conservative on the committee, urged those in charge of the fund to quickly clarify what the intermediaries are doing with their portions of the cash, however.
He said that any management fees being levied needed to be "reasonable, justifiable and kept to a minimum".
A further £1 billion of funding will be made available to the regional growth fund, which will be distributed via another bidding round.
Today's report will leave ministers red-faced, however, as David Cameron insists the government is doing all it can to boost the economy and achieve a return to positive GDP growth.