Second Round of Growth Fund Swamped with Bidders
The second round of bids for the Government’s Regional Growth Fund (RGF) has attracted almost 500 businesses pitching for the £950 million of funding available. The £1.4 billion RG fund, launched last year, will provide backing for struggling businesses that can demonstrate that “their survival will create jobs and promote growth in their region”.
The first round of investment provided £450 million of investment to companies and partnerships across England, creating 100,000 new jobs.
Applications for the second round of funding, targeted at small and medium-sized enterprises, were accepted between April and July this year. Each organisation could bid for between £1 million and £5 million to be used for growth and job creation in the private sector.
In total, 492 bids were submitted, requesting £3.3 billion in funding. It is now the task of the independent advisory board, chaired by Lord Heseltine, to assess each claim and make recommendations to a board of ministers led by deputy prime minister Nick Clegg.
“We knew from the road shows there was going to be a huge amount of interest in the second round of the Regional Growth Fund, and we have been overwhelmed by the volume of bids submitted,” said Lord Heseltine. “There is clearly a hunger for public support which will allow new and exciting projects to deliver jobs and growth in their local communities to get off the ground.”
The North West registered the highest level of interest, accounting for 28 per cent of the bids. Frank McKenna, chairman of private sector lobby group Downtown in Business, suggested this was a positive reflection of local business savvy.
“Outside of London, our region is arguably where most of the action is as far as business and business growth is concerned. These figures would tend to bear that out.”
“I also think that previous work carried out by Northwest Regional Development Agency and Business Link, promoting venture capital funds and encouraging businesses to not simply rely on banking finance, means that North West businesses are possibly more aware of the alternative access to finance models that are available,” added McKenna.
Speaking earlier this year, Federation of Small Businesses spokesman Andrew Cave said the second round of bidding was more focused on small firms.
“The second round is looking much more specifically at small businesses, but this won’t necessarily be a fund that your average small business will be applying for — the lowest amount you apply for is £1 million. Where it’s likely to have an affect is where you have partnerships coming together and putting forward proposals for community finance initiatives, which can then distribute micro-loans to small businesses.”