Government to launch Regional Growth Fund

 

A new £1 billion Regional Growth Fund is to be set up to support enterprises in those areas of England which are most likely to be affected by cuts in public sector spending.

 

Both private and public sector bodies will be able to apply for funding under the scheme, which will operate from 2011-2013.

 

The Government hopes the move will help those communities which are most dependent on public sector employment make the ‘transition to private sector-led growth’.

 

Unveiling the new Fund, Deputy Prime Minister, Nick Clegg, said: ‘The Regional Growth Fund will create the conditions for growth and enterprise in the regions by stimulating investment and create sustainable private sector jobs.’

 

However, some business groups have expressed concerns over an apparent reduction in funding. David Frost, Director General of the British Chambers of Commerce, said: ‘What's clear from the outset is that the Fund will have significantly less resources to support business growth than previous arrangements.

 

‘While business has been fully supportive of the Government's drive to reduce the UK's deficit, we believe that investment in the business environment must remain a key priority.’

 

Meanwhile, the Government has also set out plans to introduce Local Enterprise Partnerships to replace Regional Development Agencies (RDAs).

 

The new Regional Growth Fund will partly take the place of RDAs in nine of the English regions where they currently operate.

 

More information on the changes is expected to be published in a White Paper in the autumn.