New council and business-led economic development partnerships will be play the ‘lead role’ in submitting bids for a share of a new £1bn growth fund with a deadline for the first round of funding set for the end of the year, the government has indicated.
A government consultation paper on the Regional Growth Fund (RGF), a £1bn fund over 2011-12 and 2012-13, said that the deadline for the first round of bids would likely be the end of December 2010, with successful bids announced by the end of February 2011.
The paper (see right) said that while all areas of England would be eligible to bid - apart from London where “different arrangements” would be put in place - the fund would be focused in particular on “areas and communities that are currently dependent on the public sector”, with bids expected to demonstrate how they would create additional private sector jobs and support people vulnerable to public sector job losses.
Regional Growth Fund: Key points
- All areas of England (except London) eligible to bid but fund focused in particular on “areas and communities that are currently dependent on the public sector”
- Fund likely to be split into two pots: one for competitive bids for capital investment, the other for grants allocated to Local Enterprise Partnerships (LEPs) through a funding formula
- Bids for capital grants of at least £1m to be lead by LEPs, with deadline for first round of funding at end of year
- Bids expected to comprise a ‘package of projects’ brought together by LEPs that are: “transformational”in nature; focused on boosting private sector employment; able to demonstrate “significant private sector leverage”; address a “clear market failure”; backed by the community; and able to contribute to “green economic growth”.
It said that although the RGF, which is to be chaired by former deputy prime minister Lord Heseltine, would be open to bids from other private or private-public organisations, those that were supported by Local Enterprise Partnerships (LEPs) - new council and business-led sub regional economic development bodies - would be looked upon “favourably”.
The paper said the government wanted LEPs to play the lead role to ensure that bids received were part of a “coherent plan for economic growth for that area”.
It said bids should include a range of projects “submitted as a package that will lead to transformation for the area, providing confidence for all investors”. It said the LEPs would be expected to bring partners together to form such a “holistic package” and gain community backing for the projects.
The paper added that a “key consideration” in assessing bids would be whether they can demonstrate “significant private sector leverage”, address a “clear market failure”, and contribute to “green economic growth”.
It said bids should be for amounts of £1m or more, although smaller bids could be excepted from rural areas. “We should aim for projects that are transformational in nature and avoid spreading the money thinly across the country,” the paper said.
The paper said that other elements of the fund could be allocated on a grants basis to LEPs, potentially through a funding formula that allows the LEPs to “support priorities that they identify within their area”.
The consultation added that the fund should be flexible in terms of the activities that it supported. It said that some areas might prioritise investment to tackle worklessness, improve skills or attract new employment opportunities, while other areas, “particularly where there are significant barriers to growth”, may prioritise investment in transport or housing.
Other areas may prioritise investment in low carbon and environmental sectors, it said.
The consultation ends 6 September, when councils are also expected to submit their LEP proposals.