A crucial £120m business support fund will be invested exclusively into scores of North East companies after the North East LEP voted to keep it under local control.
The Treasury has backed the LEP board’s decision to keep the new JEREMIE 2 fund in the North East and not become part of the new Northern Powerhouse Investment Fund unveiled in yesterday’s Comprehensive Spending Review.
The LEP was asked by the Government to decide on JEREMIE 2’s future.
The original JEREMIE programme has been a spectacular success.
Known more commonly by business as the Finance for Business North East Fund, it has invested £140m in equity and loans from its North East base over the past five years into more than 800 local small and medium-sized firms.
The LEP understands the importance of keeping the JEREMIE scheme live. It has agreed an extra £4.5m from its North East Investment Fund to be pumped into the original JEREMIE fund to keep it running as normal until the new £120m JEREMIE 2 opens for business in the North East late next year.
Helen Golightly, North East LEP Chief Operating Officer, said: “We believe the decision we have taken to keep the JEREMIE fund administered from a North East base exclusively for investment in North East businesses, is the best option for the region.
“We have a tried, tested and highly successful funding eco-system in place which has delivered outstanding results for many North East companies, and we want to preserve and build on those foundations.”
The new JEREMIE 2 fund is likely to be branded as part of the Northern Powerhouse Investment Fund, but will be a separate North East pot of cash.
The Northern Powerhouse Investment Fund has £400m which will be invested in firms across the North West, Yorkshire and Humberside and Tees Valley.
The British Business Bank will run it from Sheffield.
Paul Woolston, North East LEP Chair, said: “The LEP has lobbied hard to ensure JEREMIE 2 remains North East based, North East run and fully invested into North East companies.
“JEREMIE is a huge success story for our region. It made no sense to take such an enormous leap in the dark to let its successor JEREMIE 2 leave the region when we have the proven track record of exceptional delivery and return on our investment right here.
“Our decision is excellent news for the North East economy. The new fund will be delivered in the North East as its predecessor was, through proven delivery channels with the repaid loan funding all being pumped back into even more growing local businesses.”
The North East LEP has committed a substantial proportion of its European structural funds to support the development of JEREMIE 2 along with match funding from the European Investment Bank.
It is hoped in time that the JEREMIE fund programme will become an ‘evergreen fund’, self-sustaining through the reinvestment of paid loans into even more new firms.
North East Finance is the holding fund manager for the Finance for Business North East fund, operating from offices in Grey Street, Newcastle.
The fund has helped create more than 2,600 new jobs, safeguard a further 3,000 and secure £180m in private sector investment.