According to the latest NAO report on the RGF, more than 80% of the £2.6bn allocated to the first four bidding rounds remains unspent, partly due to the length of time taken to process the bids.

The report states that £917m of the £2.6bn had been paid to bidders, but that £425m of this was held by intermediary funds (which apply for a block of money to then award in the form of grants, loans or venture capital to local businesses).

This means that just £492m of the £2.6bn allocated to the first four rounds of the RGF has actually reached applicants and by extension the RGF faces a "significant challenge" to distribute all of the funds allocated to it.

In fact, the RGF will have to distribute £1.4bn to businesses in 2014/15 alone - more than it has managed in all three previous years put together - to remain on budget. In spite of this large running surplus, the government had already earmarked a further £600m to support this year's fifth and sixth bidding rounds.

One reason for this is that a large chunk of the 2011/12 budget was awarded as endowments to intermediaries to avoided underspending and having to return that portion of RGF funding to the Treasury.

At the end of December 2013, of the £481.3m funding allocated to the 10 largest intermediaries, £350.6m had been paid out by the government (including £264.8m in endowments) but just £104.5m of that had actually been distributed to businesses.

These intermediaries include Santander UK, which had distributed just £2.3m of the £53.5m it had received from the RGF, Birmingham City Council, which had distributed £7.6m of its £70m allocation, and West of England LEP, which had paid out just £1.3m of the £39.8m it received.

Conversely, the best performer of the top ten intermediaries was the Royal Bank of Scotland (RBS), which received a £70m endowment and distributed £69.8m to businesses.

The report also reveals a massive difference in management fees charged by these intermediaries, ranging from 0% by RBS and the East Kent Employment Task Force, to 9% by Santander UK and Sharing in Growth UK.