Regional Growth Fund

One of the main initiatives for lending to small and medium-sized enterprises (SMEs) is the Regional Growth Fund (RGF).

Launched in April 2011, the RGF allocated £450 million to 50 bids, attracting £2.5 billion in private sector investment.

Under the fund, organisations have the opportunity to apply for a minimum of £1m funding. Projects are assessed on location, value for money for taxpayers, their ability to create jobs in the private sector, project management expertise and state aid rules.

When Round 1 was launched, the Government said that the projects would create or safeguard over 27,000 direct jobs, with around 100,000 more in companies that are suppliers.

In the October of that year, £950 million was invested in 126 bids, attracting nearly £6 billion of private investment. This time the estimate was that around 200,000 jobs would have been created or protected along with around 37,000 direct jobs, and more than 164,000 in companies that are suppliers.

Then in October last year, £1.055 billion was allocated to 130 bids, attracting £6 billion of private investment. It was estimated that the projects would create or safeguard 240,000 jobs.

Last month, Business Secretary Vince Cable announced the launch of Round 4 of the fund, with an allocation of £350 million. The deadline for applications is Noon on 20 March 2013.

Dr Cable said that the projects the Government chooses must attract private funding to match the public funding it provides. Furthermore the projects that the programme chooses to support must also include investment of private money.

The Government then provides grants, loans and loan guarantees.
The Business Secretary also explained that, since the RGF is a competitive fund, in order to get Government support, businesses must explain how much money they need and what they will use it for.

Bids are then considered by an expert panel who recommend to ministers which bids to support. Ministers then choose the bids that they believe will give the best value for money to the taxpayer.

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