RGF cash needs to be delivered faster to be effective – IoD

GOVERNMENT cash to support economic growth in the West Midlands needs to be delivered much more quickly if it is to be effective, a leading business organisation has said.

The Department for Business Innovation and Skills yesterday pledged £100m to the region as part of the second round of Regional Growth Fund settlements. The money is designed to create almost 4,000 jobs and safeguard a further 30,000.

However, the regional branch of the Institute of Directors said the delivery of the cash could well determine the success of the move.

John Rider, West Midlands chairman of the regional IoD, said many payments from the first round of RGF settlements, originally announced in April, had yet to be received and if the pattern was repeated it could negate any growth potential.

Mr Rider said what was needed was “more precision and certainty on delivery”.

“There are plenty of manufacturers in this latest list and that is very encouraging. But when is all this actually going to happen,” he said.

“The first round of RGF payments hasn’t gone out yet, something the Institute of Directors was the first to expose. The suggestion is that it will be next spring at the earliest before this latest tranche reaches the recipients.

“If these payments really will trigger the jobs promised we need more attention to timing. We must not hide behind delays caused by ‘due diligence’.”

The CBI was guarded in its support for the announcement.

Richard Butler, regional director for the body, said SMEs had the greatest growth potential but were often held back due to difficulties accessing finance, therefore the promise of new funding was welcome.

“Crucially it will help rebalance the UK economy, boosting areas that have been dependent on public sector funding,” he said.

However, he added that despite its size, the RGF did not have the capacity to plug the finance gap.

“The Government needs to look at other funding options to help these firms grow, such as opening up bond markets to medium-sized businesses. We also want to see large companies encouraged to invest in medium ones by making equity investments tax deductible so that they are on a par with debt investments,” he said.

The settlements announced by BIS yesterday are designed to support 20 projects around the region. The projects have a strong focus on supporting manufacturing and green technology initiatives.

Staffordshire was the major winner on the day, receiving support for five crucial projects, while a sixth pledge was made to support a new engine plant operation for county-based excavator manufacturer JCB.

Maitland Hyslop, chairman of the Stoke-on-Trent and Staffordshire Local Enterprise Partnership, said the announcement was “fantastic news”.

“This is testament to all the hard work that has gone into these applications,” he said.