A new report on economic development says the Nova Scotia cabinet should relinquish its control over a contentious job-creation fund to improve the program's accountability.

The report by former Dalhousie University president Tom Traves says the cabinet-controlled Jobs Fund requires an arm's-length decision-making process to ensure it has the public's trust.

Nova Scotians pay tens of millions of dollars every year to attract and keep business.

The Jobs Fund has often been criticized as a slush fund guided by the political motivations of cabinet rather than sound economic policy.

Last November, the province's auditor general said he found examples of unsecured loans and loans that were approved but did not always include the required financial and economic analysis.

Premier Stephen McNeil says he has yet to read the Traves report, but he endorses the idea of making the fund more transparent.

Maureen MacDonald, interim leader of the New Democrats in Nova Scotia, says Traves stopped short of telling the government to stop spending. Instead, he offers praise to Innovacorp and Nova Scotia Business Inc.

"Stephen McNeil ran an election based on a promise and a message that there would be no more public money for big companies and this report now sets the stage for Stephen McNeil's u-turn which is about to come down," she said.

Traves says some kind of fund is needed to deal with major projects or emergency situations that don't conform to the requirements of Nova Scotia Business Inc., the province's business lending agency that is overseen by an independent board.

With files from Paul Withers