Most of a government fund set up to boost regional economies remains unspent, while the cost of creating jobs has increased, according to a new report.
The National Audit Office (NAO) said there was still a "significant" amount of money to be allocated through the Regional Growth Fund.
The number of jobs created or safeguarded since the £2.6 billion fund was set up in 2012 had increased by 22,100 to 44,400.
But around half were covered by just five schemes, while the average cost for each additional job had increased from £33,000 to £37,400, said the NAO.
Around £492 million had now reached projects, but most of the fund remained unspent, with £425 million held by intermediaries, said the report.
The Business and Local Government Departments have both speeded up the process of making final offers to bidders, but they face a "significant challenge" to spend money as quickly as originally expected, especially in the coming year, when the budget is £1.4 billion.
The Government launched the fund to support private firms in English regions, especially in areas dependent on public sector employment.
Business Minister Michael Fallon said: "The NAO report rightly recognises the steps we've taken to strengthen RGF by improving its governance and getting money into the hands of businesses more quickly to support economic growth.
"RGF is working. Over £2.6 billion of RGF investment has now been allocated to 400 local projects and programmes which is unlocking nearly £15 billion of private investment and delivering 550,000 jobs."
The NAO report was based on the first four bidding rounds of the fund, which in total is worth £3.2 billion.
Shadow minister for small business, Toby Perkins, said: "To grow our way out of the cost-of living crisis we desperately need to see better-balanced and sustainable growth across the UK's regions, but the Tory-led government's flagship Regional Growth Fund has been plagued by chaos and delay.
"A potentially valuable contributor to re-balancing the economy is being undermined by ministers' failure, meaning that more than a third of winning bidders under the scheme's first round have now pulled out entirely while others have been left waiting almost two years to receive their money.
"This report highlights ongoing concerns over bureaucracy and delays in money getting out of the door to the businesses which need it and worryingly finds that hundreds of millions of pounds have been left gathering dust in government coffers. The RGF was set up to boost private sector growth in deprived areas but instead we are seeing areas and regions held back - ministers urgently need to raise their game."