Around 5,000 jobs are expected to be created with support from an EU-backed fund that aims to stimulate economic growth in the North, writes Deputy Business Editor Greg Wright.
Ever wondered what the European Union has done for the North of England’s economy?
You ought to visit just one of the hundreds of firms that have been supported by the Northern Powerhouse Investment Fund (NPIF) over the last two years.
The EU-backed fund provides commercially focused finance to help entrepreneurs achieve their goals. It is supported by a collaboration between the British Business Bank and 10 local enterprise partnerships in the North West, Yorkshire, and the Tees Valley which aims to stimulate economic growth.
Ken Cooper, the managing director of venture capital solutions at the Sheffield-based British Business Bank, is proud of the role the NPIF has played in creating jobs across Yorkshire.
The success stories include Cobra Sport, a Sheffield company which manufactures high-performance vehicle exhausts.
It has expanded across the Pennines with the support of a six-figure loan from NPIF - Mercia Debt Finance, which is managed by Mercia Fund Managers and is part of the NPIF.
Cobra Sport acquired the assets of the Macclesfield firm JP Exhausts in a deal which secured the jobs of all its 16 staff. The acquisition also allowed Cobra Sport to expand into the motorsport market. Cobra Sport was set up by Rachel Abbott and her brother Peter Jarvis in 2004, although it can trace its roots back to a business founded by their father, Philip Jarvis, 50 years ago.
It’s just one of many firms that have received support at the right time from Mr Cooper and his team. Mr Cooper was delighted to see the NPIF, which was established almost two years ago, being used to support two growing businesses.
He said: “So far we have deployed just under £100m from the Northern Powerhouse Investment Fund. We are hoping by our second anniversary to have exceeded that figure. We’ve got about £80m alongside that from the private sector.
“So far, in the first two years, we’ve supported 371 SMEs (small-and-medium-sized enterprises) across the North of England. As companies grow we expect to see further jobs created.”
Mr Cooper and his team are determined to hit the fund’s target of creating 5,000 jobs.
The £400m investment vehicle was launched in 2017 by the British Business Bank. The NPIF project is supported by the European Union using funding from the European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme and the European Investment Bank.
The Chancellor has confirmed that all structural and investment funds projects, including the NPIF, which were granted before the UK leaves the EU will be guaranteed by the Treasury. The funding from the European Investment Bank is a commercial loan that will remain in place when the UK leaves the EU.
The British Business Bank is starting to play a significant role in Yorkshire’s economy.
Headquartered in Sheffield, the bank has an essentially simple mission – to increase the supply of finance available to smaller businesses.
It is Government owned, but independently managed. It was established to bring expertise and Government money to the smaller business finance markets.
Although, it does not lend or invest directly, the bank works alongside more than 100 partners such as banks, leasing companies, venture capital funds and web-based platforms.
But why is the head office in South Yorkshire and not the City of London?
“It’s because the Manpower Services Commission was based in Sheffield,” Mr Cooper said.
“It had responsibility for small business finance back in the days when the Government thought that small businesses were a way of getting people out of unemployment.
“That’s changed a lot. We now see small businesses as drivers of economic growth and employment. The Manpower Services Commission had responsibility for small business finance.
“That led to a pool of talent being developed in Sheffield, which meant that when we were looking at developing the Enterprise Capital Funds programme, the natural base for that was Sheffield.
“The British Business Bank has always had a twin site approach, with staff in London and Sheffield.
“Roughly half of the staff of the British Business Bank are Sheffield-based. Over time we will see that balance shift towards Sheffield. We are just taking on an additional floor in Steel City house.”
The bank’s staff numbers in Sheffield could increase from 100 to around 160 in the near future.
“We have put money to work in the Northern Powerhouse region at a time when perhaps London and the South East is a little bit overheated,” Mr Cooper said.
“There is plenty of money for investment there. In the North there is really untapped talent to invest in.”
He added: “Every fund manager has an eye to the next fund. There is a legacy in the jobs and the economic output we create. I don’t think it will be ‘job done’ after one fund.”
NPIF investments have provided an economic boost for all corners of the North. The fund has supported everything from a Cumbrian cheesemaker to an advanced manufacturing business in Hull.
One business – Libertine, which is developing motor generator systems – has moved its headquarters from Cambridge to Sheffield with support from the NPIF.
In late 2017, Libertine revealed that it was taking the first unit at the second phase of Sheffield’s Vantage Park Industrial Estate to advance its linear motor-generator technologies.
The move will pave the way for new product development and testing facilities following a £650,000 funding injection which was led by the NPIF.
Mr Cooper added: “We do have a real South Yorkshire focus. We back lots of businesses. Sheffield is good for the bank as well as the bank being good for Sheffield. We’re getting great quality staff in Sheffield.
“It’s a great place to live and we’re here to stay.”