Today my right hon. Friend the Deputy Prime Minister will announce the provisional allocation of a further £1.055 billion to 130 beneficiaries from the regional growth fund (RGF). The selected beneficiaries will proceed to a due diligence and contracting phase that will be complete within six months. This significant investment by the Government provides additional help for companies to create jobs within their firms and their supply chains. Every £1 of RGF money being allocated will be matched by £6 from the private sector. The RGF is generating private sector investment nationally and in local economies, creating and safeguarding jobs. The RGF supports the Government’s ambitions to make the UK the best place in Europe to start, finance and grow a business in addition to encouraging investment and exports.
There was a high quality of bidding to round 3. In June this year we received 414 bids asking for £2.78 billion of funding. Following a full review, 278 bids went forward for in-depth assessment and, earlier this month Ministers selected the final 130 beneficiaries after advice from the independent advisory panel chaired by my noble Friend Lord Heseltine.
Of the £1.055 billion—£697 million will go to the private sector consisting of 101 companies, bank schemes for small and medium-sized enterprise (SME) support, supply chain programmes and grant schemes with local media. These awards actively support the industrial strategy the Government are following.
Three hundred and fifty-eight million will go to 29 intermediaries such as local authorities and local enterprise partnerships directed at local growth priorities in their areas. This is a significant award putting funding directly into the hands of local leaders.
The round 3 contracting process will be quicker because lessons learned from the previous rounds are being implemented. I have set a deadline of three months from today until final offer, and a deadline of three months for due diligence before award.
Rounds 1 and 2
Progress remains good on rounds 1 and 2 where we have a firm position with nine in 10 bids and six out of 10 bids have already started. Over half the bidders (140) are contracted and able to draw down funding and a further 45 are completing their due diligence reports.
The priority now is to agree a way forward with the remaining few, will be done between now and Christmas.
Currently 149 projects and programmes have started, generating almost £4.8 billion of private investment into our economy. Several companies were happy to start work before receiving any funds; agreeing terms has given them the confidence to get going and start work. The number of withdrawn projects and programmes is 29 (12%). For a fund of this size this is low: withdrawals also point to the robustness of the process—something the National Audit Office (NAO) has been positive about.
All RGF projects and programmes are being monitored; this will continue for years to come, in order to understand the impact of the RGF and continue to protect taxpayers’ interests. Monitoring will include an annual review of progress that will be reported to Parliament at the end of each financial year, beginning in the spring of 2013.