The coalition government has pledged that £450 million in financing for private sector businesses courtesy of its Regional Growth Fund will create or safeguard 127,000 jobs across the country.
It expects that the £1.4 billion Fund’s first investment round, which has provisionally been awarded to 50 bidders subject to due diligence, will directly create and safeguard 27,000 posts as well as a further 100,000 in secondary and tertiary industries.
The amount available in the first round was upped to £450 million from an originally posited £250 million due to the “large number of high quality bids submitted”. The government hopes that the money will be matched by more than £2.5 billion of private sector investment and some £150 million will be targeted specifically at small businesses.
Two high street banks have already promised to provide £30 million in match-funding through Community Development Finance Associations and the government is also in discussion with others.
Deputy Prime Minister Nick Clegg said: “This money will now help create and safeguard jobs in some of the communities worst hit by the economic downturn. Today is a step towards rebalancing our economy away from an unhealthy over-reliance on a small number of industries and a few areas.”
Beneficiaries of the conditional financing to date include the Haribo factory near Wakefield, which wants to expand; General Motors, which intends to build its new Vivaro van at its plant in Luton and Lotte Chemical, which aims to construct manufacturing facilities on Teesside to develop resins for food and drink packaging.
Bids for a second funding round will open on 12 April and be supported by a series of road shows around England to provide small businesses with advice. The closing date for submissions is 12pm on 1 July and a smaller third round may take place if all of the financing is not taken up at that point.
