There are substantial changes affecting the form of finance available to promote enterprise growth. Issues relating to the main stream banks seem to feature in the media every day! National evidence suggests that the scale of lending has reduced to levels pertaining before 2006 though the government’s Funding for Lending scheme is trying to reverse this trend. Meanwhile, a Business Bank is being formed and will provide a single brand for the range of government enterprise finance streams (amounting to a total of £3.9bn capital), due to be fully operational as a separate institution from the middle of 2014.
More radical changes will flow from the Heseltine Review which has set the context for the government’s approach to growth and decentralisation, ‘breaking Whitehall’s monopoly on resources and decision making, and empowering Local Enterprise Partnerships to drive forward growth in their areas.’ In particular, the framework for the Single Local Growth Fund is established, with broad criteria for determining what is devolved. Transport, housing and skills are three themes which the government regards as central to the success of this Fund. Details will emerge as part of the Spending Review towards the end of June. There will be strong links between the Single Local Growth Fund and the European Programme funds for 2014-20. Please see the Europe section for updates. For business, there will be much greater emphasis on ‘financial engineering instruments’ (loans, interest rate subsidies, guarantee funds, equity and venture capital). This includes sources of European investment support, such as Jasmine and Jessica, through the European Investment Bank where there is sufficient scale.
Another innovation which will impact on business support and finance is the Plymouth City Deal. This is expected to focus on the marine sector with related initiatives on funding for infrastructure and youth employment as well as a comprehensive business support service across a substantial swathe of Devon and Torbay and much of Cornwall.
Funds traditionally channelled through local authorities also are evolving into new mechanisms such as the New Homes Bonus, Community Infrastructure Levy, Regional Growth Fund, Growing Places Fund and others, often with the Local Enterprise Partnership influencing the priorities for project support.
This brief summary is elaborated in the attached note and sets the scene. A local response is formation of the Devon Investment Partnership which aims to bring the main enterprise finance providers and business support services together to:
- Improve awareness;
- Create stronger links between ‘investment readiness’ services and loans finance;
- Increase the scale of funds available to enterprises locally;
- Collate measures of the impact of enterprise finance.
A list of business funds can be found here.
More detail is available at www.investdevon.co.uk/business/devon-investment-partnership/