By Daniel Hunter
The £1 billion third round of the Government’s Regional Growth Fund will create or safeguard thousands of jobs over the long term, benefitting 130 projects and leveraging £6 billion of private sector investment, the Deputy Prime Minister Nick Clegg will announce today (Friday).
The 130 selected bidders to the fund, which will use public money to leverage private sector investment, were whittled down from an initial 414 applications through a competitive process.
The Government investment will help manufacturing firms, small businesses and local partnerships across England to expand their operations, create new jobs and stimulate growth — the Government’s top priority.
Bidders will be putting in £6 billion of their own cash for these projects and programmes which are expected to create and safeguard more than 240,000 jobs over the long term. This comes in addition to the 300,000 jobs that are being created or safeguarded from rounds 1 and 2 of the fund – the majority of which are being added over the next 5 years.
Figures show that for every £1 of taxpayer money spent, the Fund will leverage £6 of private sector investment. This will be key to sustaining jobs for the long term.
£697 million of the £1.05 billion pot (which includes £55 million recycled from rounds one and two) will go to the private sector including 101 companies. A further £358 million will go to 29 intermediaries such as local authorities and local enterprise partnerships to ensure that funding goes to local growth priorities in parts of the country that need it most.
The announcement will be made in the North East as the Deputy Prime Minister visits two companies that have benefited from the Regional Growth Fund.
Deputy Prime Minister Nick Clegg said:
“This £1 billion boost for growth in towns and cities across England is creating jobs that will last in the parts of the country that need it most.
“In tough economic times the Regional Growth Fund is good value for taxpayers’ money — this £1 billion round of the fund is pulling in £6 billion of private sector investment.
“I have seen for myself the real difference this makes on the ground — from iconic businesses like Eddie Stobart expanding in Widnes and creating 3,450 jobs in the local area, to the Sunderland car parts factory, Unipres who have used their funding to buy a new 3,000 tonne press, letting them accelerate production and take on an extra 316 people.
“The Regional Growth Fund is working, on track and supporting businesses to create jobs and grow the economy.”
The Business Secretary, Vince Cable was in Liverpool yesterday to visit Redx Pharma, a UK-based pharmaceutical company which has been allocated £4.7 million in round 3 for research into drugs against microbial infection, influenza, hepatitis C and HIV. The project is expected to create 119 jobs over five years.
Speaking at Redx Pharma, Vince Cable said:
“The Regional Growth Fund is creating the long-term growth and jobs that this country needs. The projects support important local priorities and there is a good alignment with key sectors in our Industrial Strategy including automotive, aerospace and life sciences.
”Redx Pharma’s previous award of £5.6 million in round two has already helped them establish an impressive oncology research centre and has created over 50 new jobs since April this year. I look forward to seeing the progress of vital drugs research they intend to carry out thanks to their round three award.”
Business Minister, Michael Fallon said:
“Round 3 created a lot of high-quality demand for the fund which made the decision process very tough. However the selected bidders represent a good breadth of different sectors and a strong distribution across the country.
“The selection process has been very fast – from companies applying to allocating funds in only five months. So we are keen to get a move on which is why this time, those selected have now only three months to agree final offers, and three months to complete due diligence. We want to ensure good value for the taxpayer and to get these projects started as soon as possible.”
Local Growth Minister, Mark Prisk said:
“Local enterprise partnerships need the right tools and resources to help deliver growth and jobs in their communities. So I’m delighted to announce today that over £350m will be shared between 29 partnerships, enabling them to build on their successes and plan for the future. This funding will ensure they remain locally-led, and focused on helping to boost businesses in their area without the need for long-term central-Government support.”
Michael Fallon also provided Parliament with an update on previous rounds of the Regional Growth Fund which showed that there is now a firm and agreed position with nine out of ten bids from rounds one and two; and that six out of ten projects have started (or 160 projects and programmes). 29 bidders have withdrawn, allowing over £108 million to be recycled back into the Regional Growth Fund.
Bidders have begun to report back on jobs which demonstrate that over 10,000 jobs have been created and protected so far, and many more jobs will follow as private investment flows to different projects. And those 160 projects and programmes that have started will inject almost £4.9 billion of private investment into our economy.
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