With the Government attempting to save money wherever they can, the news that £2.6bn remains unspent from a project set up in 2012 will come as a blow.

The Regional Growth Fund, created to boost regional economies, has seen just £492m put to use, according to Whitehall’s spending watchdog. Another £425m is in the hands of intermediaries. This comes as the National Audit Office (NAO) has said that the cost of creating or saving jobs has gone up.

Since the fund was started the amount of new and safeguarded jobs grew from 22,100 to 44,400. Half of these were covered by only five of the 291 avaliable schemes, with the average cost of each new job rising by 13% from £33,000 to £37,400.

The National Audit Office has said the fund is now better managed and that the process of making final offers to bidders has increased in speed.

Shadow Business minister Toby Perkins has said that the fund “has been plagued by chaos and delay”.

According to the Labour MP, “More than a third of winning bidders under the scheme’s first round have now pulled out entirely while others have been left waiting almost two years to receive their money”.

Business Minister Michael Fallon has been quick to support the progress the fund has made: “The NAO report rightly recognises the steps we’ve taken to strengthen RGF by improving its governance and getting money into the hands of businesses more quickly to support economic growth.”