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Business Secretary Vince Cable and Lord Heseltine comment on the National Audit Office’s report on the Regional Growth Fund

Business Secretary Vince Cable and Lord Heseltine comment on the National Audit Office’s report on the Regional Growth Fund

News Release issued by the COI News Distribution Service on 10 May 2012

Responding to today’s publication of the National Audit Office’s (NAO) report on the Regional Growth Fund (RGF), Secretary of State for Business, Vince Cable said:"The NAO’s report recognises that the Regional Growth Fund is working."It shows that the RGF is set to create and protect 328,000 jobs for people in communities that need the most support and help companies grow. It shows that our processes are robust, competitive and un-biased. It shows that we chose to support the highest quality bids offering best value for money."We have already put in place some of the NAO’s recommendations such as making more administrative resources available, which means projects are being processed even faster. Round three will create thousands more jobs, and businesses have until June 13 to submit their bids."

Lord Heseltine, chair of the Regional Growth Fund’s Independent Advisory Panel said:

“The NAO report shows the positive impact that the Regional Growth Fund is having on some of the most disadvantaged parts of England.

“The report clearly states that 328,000 jobs will be created or safeguarded by companies like Bentley, Bridon and Haribo. RGF awards are conditional on these employment benefits being delivered.”

The third round of the fund is now open to bids with a further £1 billion available to businesses creating jobs in areas that have been over-reliant on the public sector.

In the first two rounds of the fund £1.4 billion was conditionally allocated to 176 bids across the country which will create and protect around 328,000 jobs. Nine of these projects have now withdrawn their bids from the fund.

The process the projects go through once they have a conditional offer allows businesses to assess whether being involved in the fund is right for them. It also then ensures that the Government is using taxpayer money to best effect.

The 70 projects across rounds one and two confirmed as having received a final offer of support have started accessing around £540 million of funding to create and support more than 70,000 jobs. A further 10 bids have just signed final offer letters and details of these will be available shortly.

The £2.4 billion Regional Growth Fund uses public money to leverage private sector investment in the projects. For every £1 put in by Government, the private sector invests at least £6.


Notes to editors:

Once a conditional offer of funding is received from the RGF, the business and the project is then subject to due diligence. If this is passed successfully the business can then start drawing down its funding.

The nine projects which have withdrawn from the Regional Growth Fund are:Ames Goldsmith, North WestConitech, North EastZegen (Wilton) Ltd, North EastCumbrian Holdings, North EastT&N Plastics Ltd, Yorkshire and HumberRapiscan Systems, West MidlandsIrwin and Sons, West MidlandsThales Properties Ltd, East Midlands Messier Dowty Ltd, South West

Due to commercial sensitivities, details of the specific reason for each of the nine companies withdrawing from the fund will not be published. Making this detail available could compromise commercial interests.

For many of the bidders, they withdrew because of global market conditions, not wanting to pursue the project or changes to senior management. In rare cases it was down to the parent company not supporting the project, or the project not complying with state aid rules.

The total value of withdrawn bids is just under £13 million. The money will be put back into the fund to be distributed in the third round.

The details of businesses which most recently signed their contracts will be announced in due course.

The third round of the fund is now open to bids. The deadline for applications is midday June 13. For more information on submitting a bid, visit www.bis.gov.uk/rgf.

BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

Contacts:

BIS Press Office
bispress.releases@bis.gsi.gov.uk

Joanna Fletcher
Phone: 020 7215 5951
Joanna.Fletcher@bis.gsi.gov.uk

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