Deputy Prime Minister Nick Clegg has today announced details of the first £450m worth of funding through the Regional Growth Fund and says the projects will safeguard or create 127,000 jobs.
The RGF is designed to help businesses in areas of deprivation or that are susceptible to public sector spending cuts in government’s continuing bid to rebalance the economy with more weight behind private sector growth.
Applicants had to demonstrate how they would create jobs and garner further investment if successful in their bids. This first round of money has been spread among 50 different companies and partnerships and is expected to instigate a total of £2.5bn in private sector investment and safeguarded or create 27,000 jobs directly. A further 100,000 jobs are expected to be secured through the associated supply chains. The West Midlands stands to gain the most so far, with an extra 6193 direct and 34,669 indirect jobs.
Companies can bid for cash through the second round of the competition from today, with almost £1bn left in the pot.
Projects that have received funding in the first tranche include an extension of the Haribo factory in Wakefield, a reconfiguration of Vauxhall’s van making Luton site to build its new Vivavaro model and the construction of a manufacturing plant on the Lotte Chemical site in Teesside to develop resins for food and drink packaging.
Mr Clegg, leader of the Liberal Democrat party and MP for the ‘steel city’ Sheffield Hallam which is to benefit from a new link road as a result of the RGF, said he was “bowled over” by the high standard of the bids.
“Today is a step towards rebalancing our economy away from an unhealthy overreliance on a small number of industries and a few areas,” he added. “We need to spread opportunity across the whole country, drawing on our many talents. I know that with the right support these businesses can work with their communities and together play their part in leading the country back into prosperity.”
There has been special considerations for small businesses which are being provided with over £150m, something Lord Heseltine, chair of the Independent Advisory Panel, says is vital if the project is to succeed. Labeling SMEs as “the lifeblood of our economy”, he said: “I have always believed in the need to give real support to small businesses for whom bidding for £1m is way beyond what they could normally expect.”
He said government and the advisory panel are now working to encourage high street banks to support microfinance through the Community Development Finance Associations, linked to the RGF through matched funding.
Steve Radley, director of policy at EEF, said: “Given the limited resources available, this is a welcome focus on supporting investment in research and development and backing high quality jobs in growing manufacturing sectors. The next stage must be to work in tandem with the national growth strategy to create a competitive business environment which will stimulate additional private sector investment across all regions.”
A series of roadshows across England will now take place to promote round two, which will close for bids on July 1. Details on these plus a regional breakdown of the bids allocated so far is available on the Department for business, innovation and Skills’ website.