A £120m fund to support the growth of hundreds of North East businesses hopes to go live early next year after an important milestone was reached today.
The North East Fund – also known as “JEREMIE” – will offer a range of equity investments and loans to firms to drive local growth and job creation in the North East LEP area.
The final piece of the funding jigsaw was agreed in principle this week by the European Investment Bank’s (EIB) top level Management Committee, after several months of intensive negotiations, following the triggering of Article 50 in March. The £60m loan represents a significant vote of confidence in the North East.
The EIB contribution will form part of a £145m funding package supported by the Department for Communities and Local Government (which has responsibility for the European Regional Development Fund in England) and legacy returns from earlier successful funds operating in the region. The seven North East Local Authorities, working through the NECA Leadership Board, have also been fully engaged in bringing the programme to fruition.
The North East Local Enterprise Partnership (LEP) led the project team negotiating for the Region. Although the Fund will invest exclusively in the North East LEP area, it will also sit alongside the Northern Powerhouse Investment Fund (NPIF), operating in other LEP areas, to drive business growth right across the Northern Powerhouse.
The North East Fund will provide financial support for over 600 businesses, creating around 3,500 jobs over the life of the fund and delivering a legacy fund of up to £80m for further investment in the region over the next decade.
Helen Golightly, executive director for the North East LEP, said: “Our project team has been working continuously with HM Treasury and the EIB behind the scenes to make this fund a reality. Both have been committed to the new Fund from day one and we are grateful to them for their support. This hugely positive decision, though still subject to contract, is a real coup for the north east and, critically, enables us to retain independence and local control over how these funds are used.
Andrew Mitchell, chief executive of the North East Fund Limited, which will deliver the new programme, added: “This announcement follows months of painstaking work and we are delighted that the European Investment Bank will remain a major long-term investor in the North East. We will now focus on getting money to businesses as soon as we possibly can”
Notes to Editors
The North East Local Enterprise Partnership (North East LEP)covers County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.
Our role is to drive economic growth in North East England by supporting businesses and creating more and better jobs for everyone.
Over the next decade, we aim to help the North East create an extra 100,000 jobs. An ambitious target, but one we believe is achievable working with our partners in the public and private sectors.
Our Strategic Economic Plan (SEP) for the North East outlines how we will create more and better jobs including the identification of our areas of strength, referred to as our smart specialisation areas; passenger vehicle manufacturing; subsea and offshore; life sciences and healthcare; and creative, digital, software and technology based services, and our plan to bring investment and funding to the area.
The North East LEP works across a number of themes and areas. These are:
- Funding: The North East LEP competes nationally to bring funding into the region. We are the holder of a multi-million pound pot of money, sourced from various funding streams, which is used to deliver the Strategic Economic Plan priorities.
- Business Growth: Our Business Growth Programme provides the framework for investment into small and medium-sized companies, opening up access to the finance and support they need to grow and thrive. The LEP is also delivering the ground breaking northeastgrowthhub.co.uk. It simply and efficiently brings together all the available business support information into one digital platform to ensure businesses have all they need to create competitive advantage.
- Skills: The LEP has created an Employment and Skills Board to give strategic leadership and direction on the skills needed to provide employers with the qualified employees they need. A significant part of our work is to create greater connections between businesses and schools.
- Enterprise Zones: The North East LEP has helped secure a second Enterprise Zone (EZ) from Government for the region. It is spread across ten sites and companies located there will benefit from business rate discounts, tax savings or enhanced capital allowances. This was a result of the huge success of the first Enterprise Zone and the significant improvements it brought to the region.
- Innovation: We are working with organisations across the North East LEP area to secure our place as one of the leading ‘innovation hotspots’ in Europe. We aim to achieve this by building a world class ‘open innovation eco system’ together with partners around the region. Important initiatives include the Super Network (Venture Fest), the Innovation Observatory and the Incubator Support programme.
European Regional Development Fund (ERDF)
The project is receiving up to £58,500,000 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Communities and Local Government (and in London the intermediate body Greater London Authority) is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding.