THE failures of the Government’s job-creation scheme for the North are “nothing short of scandalous”, a report warns today – with only four per cent of funding reaching the frontline.

The flagship Regional Growth Fund (RGF) comes in for its harshest criticism yet from a committee of MPs, because so few projects have “got off the ground”.

The inquiry, by the powerful public accounts committee (PAC), found that – two years into the programme – only £60m of £1.4bn allocated, or four per cent, had reached schemes.

Meanwhile, the Government had admitted only 2,442 new jobs had been delivered, while another 2,762 existing jobs had been protected – compared with a target of 36,800 over the lifetime of the projects.

The findings mirrored The Northern Echo revelations earlier this year that nine North-East companies waited more than one year for the badly-needed cash injections.

Just seven of 16 bids approved for the region in round one, in April last year, were approved within 12 months, despite repeated Government promises to speed up the process.

When deputy prime minister Nick Clegg announced those winners, he pledged they would be up and running “in the coming months”, saying: “It is all about jobs, jobs, jobs.”

Condemning that record, Margaret Hodge, PAC’s Labour chairwoman, said: “Given the dire state of the economy, it is nothing short of scandalous that so few projects funded by the RGF have actually got off the ground.

“Some two years into the programme, of the £1.4bn allocated, only £60m had reached front-line projects.

It is unclear what is being done to make sure that money is not wasted, but spent on creating real jobs.”

The PAC highlighted how – of the £530m spent so far – £470m had been “parked in intermediary bodies”, including banks, local councils and local enterprise partnerships.

The move allowed ministers to “claim more progress than, in fact, had been achieved”, as well as preventing the Treasury claiming the money back as unspent.

Senior civil servants were unable to give “meaningful assurances”

about the way these bodies were managing the money, or whether “management charges” would be deducted.

Mrs Hodge also criticised the Government for failing to explain how the RGF would be evaluated, adding: “We want to know, in detail, by the end of the year, how they intend to do so.”

The first two rounds of the RGF were expected to create 14,800 jobs in the North-East and a further 6,300 in Yorkshire, compared with the South- East (5,900) and London (zero).

A third round of bids for growth fund cash closed in July, making a total of £2.4bn to be handed out in this parliament.