THE latest round of the Government’s flagship job creation scheme will have minimal impact on growth or help the region’s cash-strapped small firms, according to North-East business leaders.

Nick Clegg, the Deputy Prime Minister, yesterday launched the latest round of the regional growth fund (RGF), which aims to create jobs and boost investment in areas hit hardest by spending cuts.

About £350m is up for grabs in what is thought to be the final round of funding before the next General Election.

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In the first three waves of the scheme, which began in 2011, North-East firms did well in comparison to other regions. For example, Nissan in Sunderland has secured contracts to build new models and drive forward plans to build electric vehicles, thanks to backing from the RGF.

However, Ross Smith, director of policy at the North East Chamber of Commerce, wants to see action to secure growth for the long-term.

He said: “The suggestions are that this will be the last funding round in this Parliament which begs the question – what next?

“The cash has been welcome but the way it has been distributed has not been strategic.

“We’d like to see a properly thought-out, longer-term plan that gives North-East firms confidence and a clear view of where they stand. The RGF has been good for certain companies but it lacked a clear, sustainable strategy.”

Mr Smith suggested that a starting point would be Lord Hesletine’s recent report, which called for the regions to get greater say over their economic destiny. The former Conservative deputy prime minister wants to hand local enterprise partnerships, such as Tees Valley Unlimited, control of budgets worth £14.5bna- year across England.

In the meantime, Ted Salmon, North-East chairman of the Federation of Small Businesses, said the RGF, which will not accept bids of less than £1m, discriminated against entrepreneurs.

“Small businesses across the region have been put off from bidding for this money given the £1m minimum threshold which many don’t have the capacity to manage,”

he said.

“Helping small and micro businesses to grow is critical if we are to get the North-East economy growing and we’d like to see a better focus on this.

“There have been some bids from previous rounds of the RGF that are seeking to help small businesses and we would hope to see something of this nature again being submitted.

“Small and micro businesses play an integral role in the North-East economy and their contributions need to better recognised in funding streams like this.”

Stockton North Labour MP Alex Cunningham welcomed any investment in the North- East economy but he said the fund was a poor replacement for regional development agency One North-East.

“Paltry sums are being made available when the economy is flatlining and at risk of dipping back into recession.

What we need is real investment in real jobs,” he said.

Redcar Lib Dem MP Ian Swales pointed to the support that previous rounds of the RGF had given to local firms, including manufacturers SSI, Nifco and Cummins.

“Already the RGF has made a real difference in the North- East,” he said. “While Labour went on a prawn cocktail offensive in the City of London, they forgot to invest in the rest of Britain. By investing in jobs and growth in the North- East, Liberal Democrats are rebalancing the economy to end our over-reliance on financial speculators in London and give areas like ours a fair share of investment.”