MPs probe £2.5bn fund for business

Backed with £2.5 billion from the main high street banks, the fund has injected less than £60 million of equity into 11 projects since May 2011.

Labour business spokesman Gordon Marsden called on ministers to explain if they are content with its progress.

The Opposition is concerned it could be a re-run of the faltering Regional Growth Fund, which has struggled to get investment into the parts of the country hit hardest by public spending cuts.

But Jon Rhodes, director of communications at the Business Growth Fund, said the initiative was ahead of its business plan.

“We are ahead of where we expected to be at this point,” he added. “We are investing commercially and for the long term.

“We are taking time to understand these companies and these companies have to understand us. These companies can double in size.”

Two of the fund’s 11 equity investments, the Barburrito Mexican restaurant chain and the Wear Inns pub group, have operations in Yorkshire.

Mr Rhodes said the fund will soon announce a £4.5m investment in a Harrogate based health care group. The fund is also appointing an investment director for Yorkshire, he added.