David Davis has called for government funding to be diverted from other parts of Britain to support Humber companies
As published in the Hull Daily Mail:
MP’s plea for funding to reach groups that need it
A Senior politician has called for government funding to be diverted from other parts of Britain to support Humber companies.
Haltemprice and Howden MP David Davis made the comments after a damning report revealed only 10 per cent of state grants for businesses reached their target.
The House of Commons Public Accounts Committee criticised groups distributing the cash, including local enterprise partnerships (LEPs), for holding it up.
It said funds should be taken from under-performing LEPs and given to successful ones.
The Humber LEP has given out more than half of its available grants, well above average, and Mr Davis said handing it more money was “clearly in the public interest”.
The former Shadow Home Secretary said: “There are three measures that determine the success of an LEP.
“They are firstly the number of good projects they find to invest public money in, secondly the extent to which this public money can be leveraged up with private sector investment, and thirdly the number of long-term high-value jobs created by their efforts.
“The Humber LEP is doing a very good job on all these measures, and so it is clearly in the public interest that money other LEPs are proving unable to use should be redistributed to the best performers – like the Humber.”
The committee found just £400m of £3.9bn national funds had so far reached business.
However, the Humber LEP has given out £16.4m of its £30m Regional Growth Fund (RGF) pot, creating more than 1,300 jobs.
Chief executive Kishor Tailor said separate grants would be made available to companies forming part of the supply chain for the £310m wind turbine factory Siemens is building in the region.
Conservative Mr Davis was echoing the views of Labour MP Margaret Hodge, firebrand chairman of the Public Accounts Committee.
She said: “Despite the large sums available for promoting economic growth locally, little money has actually reached businesses.
“The departments should introduce binding milestones for distributing funds and move quickly to claw back money not being spent – or spent disproportionately on administration – and redistribute it to better performers.
“Progress in creating jobs is falling well short of the departments’ initial expectations.”
Karl Turner, MP for Hull East, said although he did not necessarily back the idea of redistributing cash he would support giving LEPs more independence.
Mr Turner believes the organisations need more funding across the board.
The Labour politician said: “I’m not sure if it’s a step too far to redistribute money.
“It’s a bit like saying, ‘Take money from under-performing schools and give more to those doing well’.
“I don’t agree – I think all regions deserve more control and more power, and if you give them more money and more authority it’s better.”
The MP would like to see the Coalition more closely follow a model proposed by Lord Heseltine.
In his report No Stone Unturned, the Tory peer called for the creation of a £70bn regional funding pot and recommended power be diverted away from Whitehall.
Mr Turner said: “Margaret Hodge is an excellent chair who has got an ability to cut to the nub of the issue without fear or favour.
“But I wouldn’t necessarily support her on putting the money into better performers.
“I would be concerned the ones performing less well might also need support.”
The Humber LEP gives money to growing businesses in an effort to boost jobs.
Its cash is also supposed to boost non-state investment, and figures reveal the grants have so far generated £86m of spending by private companies.
One of the latest firms to benefit from the LEP’s Growing the Humber fund was vehicle bodywork firm Martin Williams.
The company, which is based in Burstwick near Hedon, used its £130,000 grant as part of an £850,000 project to double its workshop space.
It now occupies a 48,000 sq ft site and has been able to grow six months earlier than expected, taking on 25 staff.
Company director Nick Williams said: “Without the Growing the Humber RGF grant, we would not be able to expand our workshops to the extent we are doing.
“We would not have been able to take on some of the work we are now able to undertake.
“Through this project, we have also been able to bring benefit to local businesses through the work we subcontract.”
David Kilburn, chair of the LEP’s investment panel, said: “It is great news the project at Williams has got off to a flying start and growth has exceeded their expectations.”