'Programme bids' encouraged for RGF cash
Businesses and organisations will be encouraged to submit ‘programme bids’ to the second round of the £1.4bn Regional Growth Fund, the chief secretary to the Treasury has told Insider. Danny Alexander said bids could take the form of a loan fund for small companies in the region as the minimum bidding threshold of £1m was often unsuitable. His comments came as the chief executive of the Birmingham Chamber of Commerce told Insider that the region had done “perhaps better than expected” after details of the five successful bids emerged.
The West Midlands was granted five pockets of funding from the government’s RGF pot. In the first round of the investment, £450m was handed out to 50 businesses across the country.
Speaking to Insider, Danny Alexander revealed that the next round of bids for the remaining £1bn RGF could take the form of a loan fund for small companies in the region. He said that the minimum bidding threshold of £1m was often unsuitable and so funds for specific geographical areas could help to benefit more businesses.
“Programme bids are one new area that we’re interested in for the second round of the fund,” he said. “That might be a fund to help small businesses in a certain geographical area. If people come forward with those sorts of bids, we’ll be keen to look at them.
“The minimum threshold is often not at the level smaller companies want. But by looking at programme bids I think areas can really support growth among small businesses. Lord Heseltine and Sir Ian Wrigglesworth (chairman and deputy chairman of the fund’s approval panel) will be encouraging those kinds of bids in the second round.”
Bids from Birmingham Chamber of Commerce on behalf of the city council, Staffordshire-based engineering business Alstom, Jaguar Land Rover, Bosch Thermotechnology and the Prince’s Regeneration Trust all secured funding.
Jerry Blackett, chief executive of the Birmingham Chamber of Commerce, said the city’s £15.7m bid could create up to 10,000 jobs.
The investment will be ploughed into major improvements to the A45 near Birmingham Airport, the total cost of which is estimated at £32m.
Blackett said: “The region has come out of the first round of funding very well - perhaps better than we thought we would. I think a lot of people are still coming to terms with the fact that we have succeeded so well.
“But I don’t think we should be surprised – the West Midlands has all the credentials that were needed for the RGF scheme, as it prioritises job creation. The bids we’ve secured so far will definitely help to mop up some of the public sector job losses.”
Blackett added that the chamber thought the next round of bidding, for the remaining £1bn, would be “broader and thinking more long term”.
Engineer Alstom won a total of £4m from the cash fund, which it says will contribute towards its research and development programmes.
Bosch Thermotechnology, based in Worcester, was awarded £17.5m to bring forward 70 hectares of land to assist with the creation of Worcester Technology Park.
The scheme was put forward by Worcestershire County Council, Worcester City Council, Wychavon District Council and Advantage West Midlands, supported by the Worcestershire LEP.
Dean Attwell, who is on the business board of the LEP, said: “The £17.5m pledged will potentially spearhead phase one of a major relocation expansion of Worcester Bosch costing £234.6m, which will ultimately result in the creation of up to 1,700 jobs over the next five to ten years.
“Importantly, the economic and business benefits locally are clear. It is great news for local businesses looking to expand here and for Worcestershire to attract new and diverse companies to the county.”
Bidding has now opened for the second round of the RGF scheme, which will seek to invest the remaining £1bn in organisations and businesses across the UK.
Danny Alexander admitted that the government would assess every second round bid on its individual merit, but would prioritise those in areas likely to be affected by the government’s spending cuts.
He said: “People have to understand that the funds are limited and the whole point of the RGF is to make the very best use of the public money we have available. There were a number of factors involved in the decision-making, including the quality of bids and private sector job creation possibilities.
“But it was also taken into account the extent to which the applications could stimulate private sector growth in areas that are likely to be affected by cuts made in the public sector. It’s right that we prioritise bids like that.
“What we are trying to do is to get the very best value we possibly can from the public money we do have. That’s what we’ll be looking for in the second round.”
