THE Government was last night urged to speed up the money paid from its Regional Growth Fund (RGF) as a “matter of urgency” amid criticism that successful bidders were being tied up in red tape.

Only eight companies have been paid from the 50 nationwide that were successful in the first round of bidding, announced in April.

Yesterday, as a second round of successful bids was announced – said to be worth an estimated £950m – a number of Labour MPs attacked the Government for seemingly dragging its heels.

Some firms who were announced as benefiting from the fund only received phone calls yesterday to that effect and face a process of “due diligence” lasting months before any money is paid, since offers are conditional at this stage.

Middlesbrough South and East Cleveland Labour MP Tom Blenkinsop said he was pleased that Teesside firms such as Able UK, Tioxide, Johnson Matthey, Darchem and PD Ports were on the list, describing them as “at the cutting edge and needed if we are able to fight our way out of recession”.

But he said: “I am worried about how soon these offers can be converted into real cash, allowing projects to go ahead and for jobs to be created.

“Many regional companies made offers in the first round are still waiting six months on for the cheque in the post, and if that is any guide, many of the firms on today’s list may still face a long wait.”

Mr Blenkinsop claimed previous funding arrangements, which saw grants to businesses being co-ordinated by the soon-to-be wound up regional development agency One North East, were quicker and more efficient.

Iain Wright, Labour’s Shadow Business Minister and MP for Hartlepool said: “The last round of the Regional Growth Fund showed that the Government prioritised publicity over delivery. I hope for the good of the regional economy that successful businesses receive the money more quickly this time.”

Tony Sarginson, of the manufacturers’ organisation EEF, which represents a number of North-East firms, said: “Given the weak state of our economy, the immediate priority must be to ensure that the funding promised flows through directly to the projects concerned as a matter of urgency.”

A spokesman for the Department for Business said funding from RGF was “completely on track”.

He said: “We knew it was all going to take this long.

It is not red tape, it is down to a process of due diligence.

“We have to protect the interests of taxpayers and make sure that money is not being wasted and unfortunately it takes time.”