Doomed regional development agency Advantage West Midlands has offered its 326 staff voluntary redundancy, it was revealed today.

The £300m-a-year quango is being scrapped by the government as part of a cull of publicly-run organisations. Workers have until August 9 to take up the offer.

AWM spokesman Phil Brown today confirmed the agency had received Treasury approval to open a voluntary redundancy scheme to its staff.

The first redundancies will take effect on October 22. The staff fulfil administrative roles at AWM’s headquarters at the Birmingham Science Park in Aston.

Their job has been to distribute government funding to businesses and schemes that will create jobs and regenerate the West Midlands.

But the coalition government is to scrap it and  hand its powers to local authorities and Local Enterprise Partnerships,  which will be formed between councils and local businesses.

The announcement on redundancies was made after Mick Laverty, the chief executive of AWM, met with MPs at the House of Commons.

AWM has already been told to make £37m of cuts to its budget this year.

It has led to the axing of half the funding for the £500,000-a-year Wolverhampton Development Company, which was spear heading the city’s redevelopment and will now close.

AWM claims that for every £1 it spent, it created an £8.14 boost for the region.

It is also instrumental in negotiations to get developers on the £67m i54 business park in Wolverhampton. Work there has stalled while the quango continues to try to attract businesses to the 237-acre site.

Shadow business secretary and Wolverhampton South East MP Pat McFadden said: “The impact of the coalition’s cuts is already being felt but the wider impact is the withdrawal of funds for economic development in this region.”