Photo of Viscount Younger of Leckie

Viscount Younger of Leckie (Conservative)

My right honourable friend the Minister of State for Business and Enterprise (Michael Fallon) has today made the following Statement.

Today my right honourable friend the Deputy Prime Minister will announce the opening of a fourth competitive round of the regional growth fund. A total of £350 million is available for applicants. Building on the success of the regional growth fund over the past two years, this money will continue to support businesses to expand and create jobs.

The additional funding was announced in the 2012 Autumn Statement as part of a range of measures to target help for businesses and rebalance the economy to drive growth. This brings the overall total of RGF to £2.6 billion-helping create and safeguard thousands of jobs and attract private sector investment.

RGF is delivering jobs and growth through good value for money projects and programmes-so round 4 will be a further competitive bidding process, with the same objectives as previous rounds. We still need to build growth in key parts of the country which are overly dependent on the public sector and the RGF is a key part of this because of its success in generating private sector investment.

Round 4 of the regional growth fund is open now and will close to applicants on 20 March at noon. Bids will be appraised as quickly as possible. The accelerated timetable that I introduced for round 3 will be used which means the contracting process will be complete within six months of a bid being selected. Potential applicants should look out for expressions of interest events in their local area for support and further help with the application process. The first of these will be in Manchester on 31 January followed by meetings in Birmingham on 6 February, Leeds on the 19 February and Nottingham on 25 February. Other meeting dates, including one in London, will be announced shortly. These meetings are open to any organisation interested in bidding.

Further information for bidders is available at https://www.gov.uk/understanding-the-regional-growth-fund.

Progress to date

The contracting process for rounds 1 and 2 is now complete and 89% of all round 1 and 2 projects and programmes have started. In total, 180 projects and programmes have agreed final terms. This means that over £1 billion has been released generating £5.8 billion of private sector investment. A small number of contracts are either at an advanced stage of due diligence or have specific strategic value so have been given a little more time. However, in order to retain the sense of urgency, these have been moved onto the round 3 timetable which means that a final offer will have to be agreed by 19 April.

Selected bidders from round 3 are currently agreeing terms and conditions for their final offers from the accelerated timetable which was announced in October 2012. The deadline for agreeing a provisional offer is 19 January and I will be issuing a further Statement following this deadline to update both Houses on progress in round 3.

Exceptional RGF

Ministers have agreed Government reserve the option to use RGF funding flexibly in order to respond quickly to economic shocks and opportunities or to ensure that viable growth-promoting projects are not terminated because of minor funding shortfalls which need to be met quickly. This will be in exceptional circumstances only and will take place outside the normal bidding process, although detailed due diligence requirements will still need to be met.

Exceptional RGF will be funded through money recycled back into the fund because selected projects or programmes have either reduced in scope or withdrawn. I will include updates on exceptional RGF in my regular Statements to Parliament on RGF.

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