If you think government grants are great:

Crackdown on grant fraud:

Ministers are planning to launch a review into the way business grants are handed out following a rise in fraudulent claims.

The department of business, energy & industrial strategy has approached accountancy giants including KPMG to carry out the review, according to industry sources. No decision has yet been made on which firm to appoint.

The review is likely to examine the system for awarding grants, which critics say is opaque and fails to track the progress of companies awarded cash.

It is also expected to look at rising incidents of “grant fraud”, where public bodies are scammed into giving cash to companies that do not use it in the area for which it is intended. It has been estimated that grant fraud costs the government up to £2bn a year.

Rising concern over fraud has prompted the business support agency Innovate UK, which has funded more than 11,000 projects since 2007, to begin sending officers for “proactive assurance visits” at companies that have received grants to check the funds are being used properly. It works with the fraudbusting service Cifas to crack down on misuse.

Grants are a significant source of funding for small companies. Fast-growing businesses, especially those advancing research in science and technology, have access to hundreds of grants.

However, the application process can often be complex, meaning many founders choose not to apply. Some that do apply become so expert they are awarded multiple grants, leading to accusations that the system lacks diversity.

Many grants and other forms of funding are channelled through local enterprise partnerships (Leps). The 38 Leps have been heavily criticised for failing to show that they offer value for money.

Last year, the National Audit Office said the Ministry of Housing, Communities and Local Government, which funds the Lep network, had “made no effort to evaluate the value for money of nearly £12bn of public funding”.

Some experts believe a way to tackle misuse of the grant system is to invert it, by awarding cash based on end results rather than a business plan.