With spiralling inflation already taking a toll on the pubblic, now the National Audit Office has found that each job created under a flagship government work scheme costs up to £200,000 and is funded by taxpayers.

The National Audit Office in a report revealed that the Regional Growth Fund, which was designed to help businesses create private sector jobs in the UK with high levels of public sector employment, has failed to achieve value for money.

NAO found that the scheme is only actually going to create 41,000 new positions, despite the Coalition’s claims that it would “safeguard” more than 300,000 jobs. The average job created by the fund will cost £33,000, which is far more expensive than schemes run by the abolished Regional Development Agencies.

According to the government’s official auditors, the £1.4 billion Cameron- and Clegg-backed scheme could have created thousands more jobs if the government had applied tighter controls.

“Over 90% of the net additional jobs could have been delivered for 75% of the cost, with the cost of each job then being £26,000. The cost per net additional job supported by the fund varies from under £4,000 to over £200,000″, the report said.

The NAO report is the latest major blow to the Government, after voters last week rejected Government’s another flagship scheme to create elected mayors in England’s 10 largest cities.

“To achieve better value for money from the further £1 billion now available, the Government should develop more challenging targets for the number of jobs projects should generate relative to their cost,” suggested Amyas Morse, head of the National Audit Office.

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