| Amyas Morse, head of the National Audit Office, said: "These venture capital funds help small, often innovative, businesses that otherwise may have struggled. And there is evidence that some businesses have benefited from this support.
"But, in the absence of clear objectives and baselines from the start, coupled with poor financial performance to date of early funds, the Department’s programme cannot currently be said to demonstrate value for money. Finally, there is no information publicly available about the funds. BIS should be more transparent, without compromising confidentiality."
The report found that the taxpayer is unlikely to receive financial returns on investment from the early funds. The £74 million invested in the Regional Venture Capital Funds, for example, is currently valued in the Department's accounts at £5.9 million and the Department will get a financial return only if the individual funds outperform the preferential 10 per cent return to other investors.
The Liberal Democrats claimed that small businesses have been let down by Government’s cavalier attitude to investment. Liberal Democrat Shadow Business Secretary, john Thurso said: "The report’s findings make shocking reading.
“The Government has created 28 different funds using taxpayers’ money for nine years without any idea of what it wants to achieve. No private investor would demonstrate such a cavalier attitude to investment.
“Funds created by Government are performing significantly worse than their private sector equivalents. The £74m invested in Regional Venture Capital Funds has lost 92 per cent of its value.
“We need to connect private investors with promising businesses by creating Local Enterprise Funds and Regional Stock Exchanges so that Government facilitates investment rather than squandering it.”
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The Editor | 
