Billions of pounds worth of Government money set aside for boosting business growth has been left unspent, according to MPs.

The Commons Public Accounts Committee (PAC) said that only 10% of the £3.9 billion budget had actually been spent.

The committee described the initial targets for jobs created or safeguarded as “wildly over-optimistic” and said that the situation was “frustrating.”

Margaret Hodge, MP, told the BBC:

“Some £1bn of the remaining £3.5bn allocated to initiatives is currently parked with intermediary bodies such as local authorities, Local Enterprise Partnerships and banks – and the rest with the Departments.

“Progress in creating jobs is falling well short of the Departments’ initial expectations.”

As an example, Ms Hodge said that the departments for Communities and Local Government, and Business, Innovation and Skills would have to spend £1.4 billion this year to meet their financial targets.

One problem is that private companies put in charge of distributing funds are not effectively doing so.

The PAC report said that one programme run by Santander UK had only distributed £2.3 million out of a £53.5 million fund, despite being allowed to claim administration costs of up to £5m over the lifetime of the scheme.

However, it’s not only private companies at fault – government departments allocating money can claw back funds that have not been distributed, but are currently not doing so.