Yorkshire companies fight for £350m to boost growth

Ministers announced yesterday that the latest round of bidding to the Regional Growth Fund has again been hugely oversubscribed, with Whitehall receiving more than 400 bids nationwide worth £2.68bn.

Only £1bn is available in the third round of bidding, which closed earlier this month.

The Government said Yorkshire firms have submitted 61 separate bids – more than the West Midlands and South West, but fewer in number than the other regions of the North.

It follows news last month that Yorkshire did relatively poorly out of previous funding rounds, receiving significantly less support than both the North East and North West from a fund which was set up specifically to support private sector growth in areas deemed over-dependent on the public sector.

Civil servants insist any disparity in the allocation of money was simply down to the quality and number of bids put before them.

Business leaders in Yorkshire said they were determined to redress the balance this time around.

The latest round of bids will be considered by the Government’s independent advisory panel – chaired by Tory peer Lord Heseltine – this summer, with an announcement due in October on which have been successful. Winning projects have to show how their expansion would support the local economy and must also include their own portion of capital investment.

Business and Enterprise Minister Mark Prisk said the high number of applications for the latest round of funding was therefore “encouraging” in the current climate.

“Despite the uncertainty in the financial markets concerning the eurozone, the Regional Growth Fund has still recorded over 400 bids from a wide range of projects,” he said.

“Initial indications show that Round Three bids could deliver similar levels of private sector leverage to previous rounds – approximately £6 for every £1 of taxpayers’ money.”

The fund has come under sustained criticism over recent months following delays in delivering money to successful bidders from the first two rounds.

A recent National Audit Office report also suggested that many of 328,000 jobs the fund is designed to support would have been created anyway.

Ministers insist, however, the administration of the fund has now been improved markedly and that financial support is now making its way to the successful businesses.

Praising the “fantastic response” from businesses to the latest funding round, Deputy Prime Minister Nick Clegg said: “The Regional Growth Fund is already helping companies across the country grow their businesses and create jobs that last.

“A total of £1.4bn has already been allocated to 176 businesses, which are expected to create and protect up to 328,000 jobs.

“So far 96 of these businesses have started accessing their funding, and many projects have started their projects while they wait for a final offer.

“This third round will continue to create jobs by unlocking private sector investment, letting businesses in Britain thrive.”

Previous successes from the Regional Growth Fund for Yorkshire have included a £2m grant for David Brown Gear Systems in Huddersfield towards the establishment of a new research centre for wind turbine gears, and £18m towards a scheme improving the key link road to Doncaster Robin Hood airport in South Yorkshire.