Is your business being held back by an inability to fund expansion or relocation projects through a lack of finance options from traditional sources? Have you seen news items of companies receiving financial help from Government, but have thought this would not apply to your company? Are you aware that there is a range of government financial assistance available for companies of all sizes in the UK?
Government funding is available for private sector organisations and public / private partnerships looking to create economic growth and sustainable employment via relocation or expansion through the establishment Regional Growth Fund, Grant for Business Investment, Advanced Manufacturing Supply Chain Initiative and the establishment of new Enterprise Zones.
Regional Growth Fund for England
The Regional Growth Fund (RGF) was established by the coalition government in 2010 to encourage and support private sector enterprises to expand and create new jobs to help replace those jobs lost in the public sector through government cutbacks. It is a £2.4bn fund that all businesses, large and small, across England can apply to for grants and loans until 2015.
The funds to date have been allocated in a series of rounds: in the previous two rounds £1.3bn of funds were allocated and the application process for the third round is open. The closing date is 13 June 2012, but we do anticipate additional rounds and funding will be provided.
Who can and should apply?
Any business irrespective of size or sector can apply for a grant. The minimum bid threshold for the RGF is £1m. However, companies can apply individually for a single project or package of projects, and as part of consortia. The criteria used to assess applications are flexible, although the government has stipulated that applications will be viewed more favourably if they are in areas which:
• Have high unemployment
• Have a higher percentage of people employed in the public sector
• Have a relatively low number of private sector businesses per capita
• Have a low rate of private sector job growth
A common misconception is that the only regions which meet these criteria are in the former industrial areas of the north of England. However, this is not the case and the map (figure 1) clearly shows these criteria combined into a single index, demonstrating the favourability of particular locations and regions.
As highlighted on the map there are a number of large cities in the south of England where RGF applications would be viewed favourably, such as Bristol, Portsmouth, Plymouth and Southampton.
RGF case study one: Portsmouth Naval Base Property Trust: A two-part proposal. The first part will create business units and studios with services to support enterprise skills development, early stage business funding and mentoring, in a location that uses a heritage cell block building. The second part is an International Boatbuilding Training College with apprenticeships and training for young people in the wider marine, conservation and environmental sectors.
RGF case study two: Pirelli Tyres Ltd: A project to develop and manufacture less carbon intensive car tyres at current site in Carlisle. The project will develop a new range of tyres which will reduce the CO2 emissions of the vehicles they are on.
The location of 24 new Enterprise Zones (EZs) was recently announced by the government. EZs are specific areas where incentives and support are used to encourage the creation of new businesses and jobs and contribute to the growth of the local and national economies. The principal benefits include:
• Business rate discount over a five year period
• Simplified planning procedures
• Government support for superfast broadband
• Retention of eventual business rate growth into the local economy
• Some EZs also benefit from 100% first year capital allowances for plant and machinery
Grant for Business Investment
For exceptional, large projects in England where a grant of over £2m is being sought, the Grant for Business Investment (GBI) scheme may be able to provide funding and was recently been used by Nissan for their expansion in Sunderland. However, the GBI can only be allocated within designated areas of England, where the proposed project would mitigate or avoid a downturn in the local labour market.
Advanced Manufacturing Supply Chain Initiative
This is a new £125m fund set up to support projects in the advanced manufacturing sector, and is specifically designed to improve the global competitiveness of advanced manufacturing supply chains and encourage new suppliers to locate within the UK. Administered by Birmingham City Council and the Technology Strategy Board, it will be open to all businesses in England, including small and medium enterprises.