Partner Article

Businesses should plan ahead for next RGF

SINCE the launch of the Regional Growth Fund in 2010, the North East has seen around £150m worth of grant funding awarded to businesses based in the region. This has been the trigger to stimulate investment of over £1bn by a diverse range of businesses involved in a wide variety of activities throughout the area.

Regional Growth Fund monies have helped towards the construction of new manufacturing plants, a rail freight terminal, training facilities, and in the process have secured some world class engineering facilities for the North East. This investment in people, equipment and product development has enabled our region to stand out as innovative and forward thinking.

The Chancellor’s Autumn Statement saw the announcement of a further £1bn in Regional Growth Fund monies, the first part of which is to open for bids in February. Exact details of the amount, the third round of RGF, have yet to be announced, and there is talk of changes to the bidding arrangements.

Rounds one and two had a minimum bid requirement of £1m, and with state aid rules limiting the grant assistance to 10% or 15% of the total investment this effectively precluded many SME’s from bidding. The rules did, however, allow a number of smaller projects to combine in a package bid, providing the total bid exceeded the £1m threshold, and several of these package bids were successful in the North East.

Until the exact details of round 3 are known it is difficult for companies to assess the likelihood of an application. But, forward thinking businesses should be considering whether their RGF could help deliver their plans for 2012. As with all state aid schemes the grant must be the incentive to trigger the start of the project, so it is important to plan well in advance to maximise the chance of success. Also, as with all funding applications, the awards given can vary from sector to sector. With RGF, the two main areas to consider are capital expenditure and/or job creation. RGF is a competitive bidding process and the last round saw only 119 successful applications from a total of almost 500 bids submitted.

Now is the time for business owners to take another look at where they want to develop or grow their business in 2012 and beyond. If you are looking at ambitious plans for your business you may have a project that would qualify for RGF. Even though at this stage precise details have yet to be announced, it is positive for businesses to plan early, seek advice from a professional who understands the mechanics of RGF and who can also provide support and ideas regarding funding.

This was posted in Bdaily's Members' News section by Sarah Chapman .