Leese upbeat on prospects for next round of RGF

SIR Richard Leese, leader of Manchester City Council, has played down Greater Manchester LEP’s limited success in the first round of bids for the Regional Growth Fund.

In fact, he said the successful bid with developer Bruntwood for £2m for the £21m transformation of the landmark former Royal Eye Hospital site on Oxford Road, was by a “clear margin” Greater Manchester’s “number one project.”

Manchester submitted more than 20 bids for funding from the Regional Growth Fund, which was set up by the Government to boost private sector job creation in regions heavily reliant on the public sector.

Speaking to TheBusinessDesk.com, he said: “The first round for the Regional Growth Fund was massively oversubscribed, I don’t think anyone was going to get anywhere near what they put in.

“I’ve had a brief discussion with the Chief Secretary and explained that Greater Manchester took a particular approach, which looks at an evergreen approach, to recycling investment.

“This is far more suited to the second round. We will learn from the first round and go in that second round with confidence.”

He said the partnership between the public sector and private sector developer Bruntwood for the successful Former Royal Eye Hospital site on Oxford Road would be a blueprint for the future.

Sir Richard also believes that some successful RGF bids may run into difficulty in complying with state aid rules on grant funding.

“The approach that Manchester has put forward is not a grant-funded model and means we have very little issue with state aid. What we are proposing sees the public sector effectievely take an equity stake in a project, but there is as we all know, a risk to this.

“We are in a time of very tight resources so our ability to recycle investment and to keep pumping money back into economic development is very important.”

His views were echoed by Bruntwood chairman Mike Oglesby, who said the approach to recycling investment was the right one.

“Manchester has never been a grant-led city, recyling investment is very important. If a project needs any grant funding, the odds are it won’t succeed.”

Sources close to the Regional Development Fund told TheBusinessDesk.com that Manchester should ‘learn lessons’ from the first round, and return with more private-sector led schemes, rather than complex, lengthy  documents.

“Manchester simply got it wrong in the first round – but all is not lost. They need to look and see who has succeeded – and it’s clear that the pivate sector has to take the lead.”