Round two for the Regional Growth Fund – but is the cupboard now bare?

Yesterday saw the deadline pass for the second round of bidding to the government’s Regional Growth Fund (RGF). This is the £1.4 billion pot designed to:

“…help those areas and communities currently dependent on the public sector to make the transition to sustainable private sector-led growth and prosperity.”

The RGF is essentially the consolation prize for the government’s decision to scrap regional development agencies and gobble up their budgets. By way of comparison, the value of the RGF is around a third of that invested by the RDAs on improving the economic performance and competitiveness of the English regions over the same period.

The first round of RGF bids back in April saw 50 private sector-led projects share out £450 million, with the ambitious aim of leveraging £2.5bn of additional private sector investment. In total, however, 464 bids costing £2.8bn were received by BIS – six times the value of the money available.

This time, the remainder of the pot, some £950 million, is up for grabs, although there are no promises of further funding. Regional policy, like local government, is subject to the government’s faux localist agenda of responsibility without resources.

Meanwhile there is ongoing disquiet with the government’s local enterprise partnerships (LEPs), the bodies set up to replace regional development agencies.

Just this week, Emma Harrison, chair of private sector training provider A4E and an adviser to the government on welfare reform, told delegates at the Local Government Association’s annual conference in Birmingham that local authorities and businesses should establish “rebel LEPs” if the government did not approve bids from outstanding areas which are not part of a signed-off LEP.

It is fair to say LEPs have not had a good start. Beset with squabbling between neighbouring authorities, a patchwork quilt of asymmetric bodies have now emerged, signed off in dribs and drabs by ministers over the past six months, with many missing the chance to bid for funding in the first RGF round.

Meanwhile the three business-led LEPs established in Yorkshire have agreed to work together on regional priorities like transport, infrastructure and European funding – essentially reinventing the wheel and making a mockery of the decision to scrap the Yorkshire RDA in the first place.

As a perfect storm of low growth, structural unemployment and depressed living standards continues to blight English regional economies, the government’s response continues to be slow, disjointed and anaemic. Now, as the RGF pot is scraped dry, the question is what else have ministers got left in the cupboard. Or is that it?