BURNLEY is set to get an official 'yellow card' warning from the Government - because it is not spending grant money quickly enough!

The multi-million pounds Challenge Fund, hailed as a jobs and regeneration lifeline for the town, has failed to meet some of its performance targets over the past three months.

The regeneration project aimed to hand out economic grants of £602,000 over the quarter. But the actual figure was 44 per cent down - an underspending of £334,000.

The scheme promised to create 63 new jobs, but only 36 were offered.

Although the programme - backed by £19.5 million of Government cash which will draw in more than £120 million of private investment over seven years - was on target in most other areas, the underperformance will spark an immediate warning from the Department of the Environment.

Although managers are confident they will hit targets over a more manageable period of time, they accept the yellow card is on its way. "We know the rules and we have to meet the targets and I know we will in future," says Challenge Fund Manager Mike Cook.

He says after a busy period of investment many businesses, likely to expand and employ workers, are taking a breather and demand will pick up as the year progresses.

But for the moment demand for grants is at its maximum, he says in a report to the council's urban regeneration sub committee.

"Managers are struggling to spend their budgets and nobody is asking for more money," says Mr Cook, who is calling for a programme review which could lead to the inclusion of more new projects.

He says the programme needs to be put back on track as a matter of urgency to prevent further government penalties.

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