The Department of Business, Innovation and Skills has today released an interim report detailing how money has been distributed through the £750m UK Strategic Investment Fund and further underlining the principles behind it.
The Strategic Investment Fund (SIF) was created at this year’s budget and is one of the routes Whitehall has forged to realize the New Industry, New Jobs strategy. It is to be implanted over two years with £400 million to be released in 2009/10 and £350 million in 2010/11.
Some investments made through SIF are channelled through or supported by other organisations including government backed factions including Technology Strategy Board and the East of England Development Agency; other government departments like the Department for Energy and Climate Change and private sector companies including Rolls Royce and GlaxoSmithKline.
BIS has now provided this interim report so progress can be monitored.
Business Secretary Lord Mandelson provided the foreword to the report. “The Strategic Investment fund is not about national ownership of companies or direction of industries,” he writes. “Instead it has identified areas where targeted intervention by government can unlock viable technological development or help get good ideas off the drawing board. It is an important part of our commitment to actively preparing Britain’s economy for a balanced and sustainable recovery.”
The report highlights globalisation as one of the key considerations in deciding which areas have been given SIF cash. It says UK manufacturers need to be set up and prepared for increased focus on intermediary goods rather than finished products, due to global supply chains; more expendable cash in developing economies; and international agreements like the European Union Emission Trading System.
However, as suggested in the New Industry, New Jobs strategy, government is also keen to focus on the areas that the UK is already comparatively strong in order to cement the country’s place in those markets, as well as being the first out of the blocks for markets that are new to everywhere. The medical and pharmaceutical products sector is an example of the former while the latter includes things like low carbon vehicles. The report is keen to elucidate that this does not mean the sectors that are currently worth most to the economy (to the likely dismay of the food manufacturing sector), more the ones that can benefit the most from investment.
Other criteria for investment are that the project must be sustainable on its own; that a range of geographical and sectoral locations are covered, that non-sector specific ventures are covered as well as sector specific ones and that all investments comply with Treasury Green Book principles which relate to effectiveness.
Finally, while as already stated a range of geographical locations has to be covered, investments will only be made to projects which are going to have some benefit for the whole of the UK.
Some of the investments that have been made out of the SIF pot so far include:
• Advanced Manufacturing:
o £45m aerospace R&D programme, funding through Technology Strategy Board, led by Rolls Royce – SILOET ( strategic investment in low carbon engine technology)
o £12m expansion of Printable Electronics Centre. Could provide 1,500 jobs by 2014
o £8m Manufacturing Advisory Service (MAS) expansion
• Low Carbon Energy
o £120m for offshore wind
o £60m for wave and tidal including Wave Hub demonstration project in South West of England
• Ultra-Low Carbon Vehicles
o £10m for charging infrastructure
o £14m for Low Carbon Vehicles innovation Platform which includes a demonstrator programme
• Life Sciences
o £12m towards Biotech Park at GSK research site in Hertfordshire. Park will initially be home to 25 companies but will grow fivefold over ten years
• Digital Britain
o Contribution delivering universal availability of broadband
• UK Innovation Investment Fund
o Help for small, high-growth technology companies to access equity finance
• UK Trade & Investment (UKTI)
o £3.8m for events across the advanced engineering, creative industries, energy, low carbon, construction, ICT, financial services and security sectors
o £1m for a programme which will encourage and enable exports
For more detail on both the principles SIF is based on and the investments made through it, click here to download a full PDF copy of the report.