New Growth Fund doesn’t Make up for Cuts, says BCC
A new Regional Growth Fund to support small firms in areas worst hit by Government cuts will offer “significantly less resources” than before the Regional Development Agencies (RDAs) were abolished, the British Chambers of Commerce (BCC) has warned.
The £1 billion Regional Growth Fund, announced in the Emergency Budget and launched by the deputy prime minister Nick Clegg, will provide funding for struggling businesses that can demonstrate that their survival will create jobs and promote growth in their region.
The Fund will run from April 2011 to 2013, and has been set up in addition to National Insurance tax breaks being offered to new firms heavily dependent on public sector employment, in order to ease the blow of austerity measures.
However, the BCC said that the new funding is likely to offer far less support for firms than the previous network of RDAs, which had a collective budget of around £1.5 billion. The Government announced its plans to abolish RDAs last month, replacing them with Local Enterprise Partnerships (LEPs).
While the BCC said it would wait to see “detailed plans” showing how the new Fund will work, it stressed that investment in business must remain a key priority.
“This is particularly true for areas of the country that have not seen significant private-sector growth,”
said BCC director general, David Frost.
“Given the long-standing economic challenges that face so many parts of the country, business must be assured that private sector growth, job creation and balanced local economies are LEPs’ overriding priorities,” he added.
Further details of the Regional Growth Fund and Local Enterprise Partnerships are due to be set out in a White Paper this autumn.