Billions of pounds of Government funds set aside to boost economic growth and jobs in the English regions remain unspent, MPs have said.
The Commons Public Accounts Committee said that of the £3.9 billion allocated to regions since the coalition came to power in 2010, less than £400 million had actually been allocated to local projects and businesses, according to the most recent figures.
The committee said that officials had been forced to admit that their initial projections for jobs created or safeguarded had proved "wildly over-optimistic".
It warned that the Government departments responsible - Communities and Local Government (DCLG) and Business, Innovation and Skills (DBIS) - could now struggle to meet their financial targets.
The funding was supposed to be channelled to the regions through a series of initiatives - such as the Regional Growth Fund and enterprise zones - set up by the coalition after it abolished the old regional development authorities.
However little cash has so far found its way to its intended recipients, with £1 billion still "parked" with intermediary bodies such as local authorities and banks, with most of the rest retained in Whitehall.
One programme run by Santander UK had so far managed to distribute £2.3 million out of a fund of £53.5 million - even though the bank will ultimately be able to claim administration costs of up to £5 million over the lifetime of the scheme.
Progressing in creating jobs was said to have fallen "well short" of ministers' expectations of 550,000 jobs created or safeguarded between 2011 and the mid-2020s, with only 65,000 so far secured.
The performance of the enterprise zones was described as "particularly underwhelming" with barely 5,000 jobs. An original estimate of 54,000 jobs by 2015 has been downgraded to between just 6,000 and 18,000.
The cost or creating jobs has also risen sharply from an average of £30,400 per job under round one of the Regional Growth Fund to £52,300 in the latest round.
"Despite the large sums available for promoting economic growth locally, little money has actually reached businesses," said Margaret Hodge, the committee chairman.
"The departments have not managed the local growth initiatives as a coordinated programme with a common strategy, objectives or plan. T he departments need to learn lessons from the current programme and adopt a more coordinated and strategic approach when introducing the new growth deals next year."
Local growth minister Kris Hopkins said the report was based on "old figures" and insisted money was getting to local projects.
He said: " Britain's economy is growing and more people are in work today than ever before. Not only have we rebalanced the books, but we've created more jobs and growth outside of London.
"The Regional Growth Fund is working - over £1.2 billion has been paid to projects and companies across England - helping businesses create thousands of jobs up and down the country. We've sped up the process - companies get the money when they need it and after all the necessary checks have been carried out. Anything else would be irresponsible and a waste of taxpayers' money.
"Local Enterprise Partnerships and Enterprise Zones are proving their worth. Designed and run locally, in contrast to the distant and unwieldy Regional Development Agencies, they are accountable through the elected council that co-chairs them."
He said Enterprise Zones had harnessed government funding to secure £1.2 billion of private sector investment and to create more than 9,000 local jobs.
Some £652 million of Growing Places funding has been allocated to 305 projects that will create 4,900 businesses, 94,000 jobs and 27,000 houses, he added.