£100,000 fees cost of £100m boost for business

Last year, it was revealed that Yorkshire and the Humber was to receive a £100m windfall from the third round of the Government’s regional growth fund.

Yorkshire’s 15 winning regional growth fund bids included a plan by healthcare giant DePuy International to construct a new research centre in Leeds.

The regional growth fund is a £2.6bn fund operating across England from 2011 to 2016.

It supports projects and programmes that use private sector investment to create economic growth and jobs.

In response to a Freedom of Information request about the amount charged by professional services firms in connection with successful bids for the third round of the regional growth fund in Yorkshire, a Department for Business Innovation & Skills spokesman said: “Of the 15 round three bids in Yorkshire and the Humber, we know the due diligence costs in 10 cases.

“These total £98,600; less than one per cent of the £84.8m awarded in support of these 10 projects and programmes.

“The maximum due diligence percentage of a single award is three per cent.”

Speaking during a tour of the North East yesterday, Business Secretary Vince Cable said: “The regional growth fund is playing a pivotal role in supporting British manufacturing and helping to rebalance the economy by creating jobs and stimulating private investment.”

In the third round of funding, Leeds city region LEP (Local Enterprise Partnership) received £30m from the regional growth fund, which will be used for grants to firms in industries including life sciences, digital and creative, low carbon, advanced manufacturing and financial and business services.

The Humber LEP received £30m from the same fund, which it will use to support the renewable energy sector on the south bank of the Humber.

The cash will also be used to drive growth in other key sectors including logistics, food and digital, in order to stimulate economic activity.

Sheffield city region LEP – covering all South Yorkshire – secured £25m, which it said will create 1,500 new private sector jobs by 2015.

Speaking last year, Able Group development director Neil Etherington described the announcement that the Humber LEP was to receive funding from the regional growth fund as “another resounding vote of confidence for the development of the Humber as a whole”.

Able UK plans to build Europe’s largest offshore wind park on the south bank of the Humber (AMEP) – a £450m development which alone would create more than 4,000 jobs.

Ten private companies in Yorkshire and the Humber submitted successful bids for the third round of the regional growth fund.

The fourth round of the regional growth fund closed in March. Ministers will announce the bids selected to receive a share of the £350m in the summer.

The latest recipients of funding from the regional growth fund include UK Steel Enterprise, which has been awarded £1.2m.

The funding will help the organisation provide loan and equity funding for SMEs (small and medium-sized enterprises) and businesses in steel areas across England. Funding could be for a variety of uses, such as new premises or equipment.

Over the last 35 years, UKSE has helped create more than 70,000 new jobs.

Simon Hamilton, regional manager for UKSE in the North of England said yesterday: “The regional growth fund award allows us to fund projects that otherwise wouldn’t be able to go ahead, so it is giving a real boost to businesses alongside the support that UKSE traditionally provides.”

Representatives of UKSE met Mr Cable during his tour of the North East yesterday.

Mr Cable also launched UKTI’s “Exporting is great campaign” at St James’s Park in Newcastle yesterday.

Money safeguarding 500,000 jobs

The regional growth fund supports projects and programmes that are using private sector investment to create economic growth and employment.

The first three rounds allocated £2.4bn which, according to the Government, will leverage more than £13bn of private sector investment and create or safeguard more than 500,000 jobs across the country.

Bids can be submitted either as a project or a programme. The fund has a minimum bid threshold of £1m.

More than 300 bids have been received in round four, competing for a share of £350m. Bids are being appraised and results will be announced in the summer.