The second round of the Government’s £1.4 billion Regional Growth Fund (RGF) will support 119 bids from businesses and local partnerships with projects to expand their operations, create new jobs and attract private investment. Discussions are ongoing with a further 10 bidders about their projects.
Of the 201,000 jobs created or protected, around 37,000 will be directly created jobs, and more than 164,000 will be in the supply chain. The Government investment will support nearly £6 billion of private investment secured by the successful projects.
The RGF is a £1.4bn fund which is designed to encourage enterprise, growth and jobs in the private sector and support areas and communities that are dependent on the public sector. An expected 326,000 jobs will be created and safeguarded thanks to the fund.
Deputy Prime Minister Nick Clegg said: “I am delighted to be able to announce this boost to business, which will jump start growth and create jobs that last in the places that really need it.
“This targeted support for businesses across the country allows them to expand and create jobs. It unlocks private sector investment – with at least £5 put in for every £1 of public money.
“People in the rest of Britain have been let down for far too long by governments in thrall to one Square Mile of it.
“The first pot of Regional Growth Fund money is already making a difference across the country – helping to rebalance our economy so that every region and sector benefits.”
Business Secretary Vince Cable said: “We need to be doing all we can to enable businesses and organisations to create much needed jobs and inject private investment into the economy.
“We have announced today that a further 119 projects will benefit from the fund, and expect to deliver a huge number of jobs across their businesses and in the supply chain.
“This is a very significant boost to local communities, and the Regional Growth Fund will help businesses to drive local growth.”
Lord Heseltine, who has heading up the Regional Fund activity said: “I’m confident that the exciting projects the Government is supporting today will help rebalance the economy and help local areas thrive.
“The Government’s investment of £950 million is supported by nearly £6 billion of private investment, putting businesses firmly in control of their own economic future. The independent panel and I have been impressed by the creativity and innovative nature of these projects, and I look forward to following their progress.”
The CBI today welcomed the announcement, with Dr Neil Bentley, CBI Deputy Director-General, saying: “Medium-sized businesses have the greatest growth potential, but are often held back by difficulties accessing long-term finance for investment, so this funding will help them to grow and create jobs. Crucially it will help rebalance the UK economy, boosting areas that have been dependent on public sector funding.
“But despite its size, this fund does not have the capacity to plug the finance gap, so the Government needs to look at other funding options to help these firms grow, such as opening up bond markets to medium-sized businesses. We also want to see large companies encouraged to invest in medium ones bymaking equity investments tax deductible so that they are on a par with debt investments.”
However Chuka Umunna, shadow business secretary, accused the prime minister of being “out of touch” and said the government was failing to address a lack of economic growth.
Northern England and the West Midlands will receive the bulk of the funds, with winners including Pirelli, the Italian tyremaker, to development and manufacture less carbon intensive tyres at its factory in Carlisle; German-owned Getrag Ford Transmissions to expand capacity at its Halewood plant on Merseyside; and Ceram Research in Stoke, which tests materials for various industries.
Bradford is to also receive money to stimulate investment in its stalled city centre redevelopment. Westfield, the Australian mall operator, postponed its scheme in 2008 because of the credit crunch, leaving a gaping hole in the Yorkshire city’s business district.
Today’s announcements are in addition to those made in April that 50 projects in the first round of the RGF were successful and would benefit from a share of £450 million, subject to completing due diligence.