Plans to raise money to support the expansion of Birmingham Airport and to regenerate the former MG Rover site at Longbridge have been put on hold after the Government changed the rules over using cash from the Regional Growth Fund.

It followed the sudden announcement that only short-term “quick win” projects to create jobs in the near future would be considered in the first round of bidding for the £1.4billion fund.

The Regional Growth Fund is designed to help the private sector create jobs, particularly in regions which are currently unduly dependent on the public sector, and a first round of bidding began in October with up to £300 million up for grabs.

But it emerged just days before the deadline for applications closed on January 21 that only schemes likely to create significant numbers of jobs in the short term would be considered.

As a result, business and council leaders in Birmingham, Solihull and the wider West Midlands were forced to scrap carefully prepared bids for key programmes to support the local economy.

MP Richard Burden (Lab Northfield) said: “The Regional Growth Fund was the Government’s big idea to help the West Midlands prosper but it has just descended into chaos.”

Ministers have said they want to fund “projects” which will begin creating private sector jobs as the public sector sheds staff over the next 12 months, and not “programmes” which will take longer to have an impact, although the Department for Business, Innovation and Skills stressed that long-term schemes will be eligible for later rounds of bidding.

As a result, Greater Birmingham and Solihull Local Enterprise Partnership has decided it can only support two proposals – a request for support for Midlands-based carmaker Jaguar Land Rover and support for the FA’s National Football Centre in Burton, Staffordshire.

The other schemes considered vital for the future of the region’s economy will not now receive the active support of the Local Enterprise Partnership (LEP) in this first round of bidding, which includes business organisations and local authorities in Birmingham, Solihull, Bromsgrove, Cannock Chase, East Staffordshire, Lichfield and Tamworth.

They include an application for funds to subsidise the £32 million cost of diverting the A45 Coventry Road, to enable Birmingham Airport’s 350-metre runway extension to be built.

And they also include developer St Modwen’s application for £22 million to help pay for infrastructure improvements at Longbridge, as part of a £1 billion regeneration project on the 468-acre site.

Jerry Blackett, chief executive of Birmingham Chamber Group, said the Chamber continued to back the proposals, describing the airport expansion as “probably our top shared priority”. But he said: “We hope it will get through in round two.

“We don’t think it will be a round one contender. There will be no point insisting to government that something qualifies if it doesn’t meet the criteria.”

Other bids which had been due to receive the LEP’s support in round one but have now been put on the back burner include:
 *A planned £22 million development fund for small and medium sized businesses in the area
 *A £2.1 million bid for a retail development project to encourage growth of high-value independent shops in Birmingham
 *A £1 million bid to support an apprenticeship training programme for young people in Birmingham
 *A £3.2 million graduate retention programme across the LEP area
 *A £5 million bid to support the development of Birmingham’s biomedical industries.
 *A £7 million bid for completion of infrastructure to deliver the Eastside regeneration project.

Bridget Blow, chairman of the Greater Birmingham and Solihull Local LEP Development Board, said: “We didn’t have the latest criteria until at most a week before we had to make the submissions, so it did alter what the LEP supported last week.

“We reduced the number of projects that we supported, because they didn’t meet the criteria.

“Clearly, people will be disappointed. What we are at pains to explain to them is that there will be another tranche.

“We have asked the Government to give us clarity as soon as possible about the second round and the types of bids that will be considered.”

Mr Blackett said: “The criteria for round one, which emerged painfully slowly, became much clearer in a rush, and it meant that the majority of bids we have seen are unlikely to be successful, because not many of them can deliver private sector employment overnight at good value.”

The Chamber had offered to help the Government draw up the criteria for bids in round two, he said.

A spokesman for Birmingham Airport said he was “surprised” that the airport bid would not receive support in the first round of bidding for cash, and said it would be seeking clarification from the LEP.

Jaguar Land Rover declined to give details of its submission to the Government.