Innovation funding details
Regional Growth Fund (RGF) (England)
Description
The Regional Growth Fund is the government's main financial instrument for investing in private sector and public/private projects that will stimulate sustainable growth and create additional employment.
| Status: | Open |
| Start Date: | 28/09/2010 |
| End Date: | 30/04/2015 |
| Application Deadline: | 20/03/2013 |
| Last Updated: | 17/01/2013 |
| Last Significant Update: | 17/01/2013 |
Further information
| Fund Value: | £ 2,600,000,000,000 |
| Minimum Value: | £ 1,000,000 |
Value Notes
The RGF is a £2.6 billion challenge fund that will be spread over several bidding rounds. A minimum bidding threshold of £1 million assistance applies in order to ensure that the Fund is accessible to SMEs, which should encourage a wide diversity of bids, harnessing innovation from all sectors.
Note: A lot of interest in the Fund is anticipated so bidders need to present realistic and competitive bids.
To support potential bidders there will also be a series of road shows taking place across England to provide further information about the Fund, provide an opportunity for potential bidders to network and to attend “clinics” aimed at supporting bidders in the process. Further information about these events will be published on the Department for Business, Innovation and Skills’ RGF webpage when they become available.
Extended Description
The £2.6 billion Regional Growth Fund was first announced as part of the Coalition Government's Emergency Budget by Deputy Prime Minister Nick Clegg on 29 June 2010. The aims of the fund are to encourage private sector enterprise and create sustainable private sector jobs, and assist the areas of England that are most reliant on public sector spending make the transition to private sector led growth. Working in parallel with the new Local Enterprise Partnerships, the Regional Growth Fund will operate across England from 2011 to 2016, providing support for private sector and public/private projects that offer significant potential for sustainable economic growth and job creation.
The two main objectives of the Regional Growth Fund are to:
- Encourage private sector enterprise by providing support for projects with significant potential for economic growth and creation of additional sustainable private sector employment.
- Support, in particular, those areas and communities that are currently dependent on the public sector make the transition to sustainable private sector led growth and prosperity.
The Fund is not overly prescriptive in the type of bid or project that can be funded and will assess proposals according to their individual merit. Proposals can be received from the private sector or public/private partnerships, including the Local Enterprise Partnerships, and should seek to contribute to the delivery of sustainable increases in private sector employment and economic growth. Investment will be targeted at areas of comparative advantage, such as part-funding research and development, training or productivity-boosting technology, and the provision of infrastructure to remove barriers to private sector-led economic growth, such as improved housing supply; energy and transport services; land remediation; physical environmental improvements.
Bids eligible under the RGF will take three forms:
Projects
Private sector or partnership bids proposing individual projects - meeting the minimum bid threshold of £1 million - which make a specific and significant contribution in their own right to the core aims of the fund.
Project Packages
Bids comprising of multiple projects that either:
- Bring together a number of smaller projects (less than £1m) in a coherent way that collectively meets the minimum bidding threshold or
- Represent a strategic partnership of individual projects that individually already meet the threshold, but collectively present a more compelling proposal.
Programmes
Proposals from individual bodies or partnerships for strategic investment programmes, the collective aim being to meet the criteria of the Fund. Programme bids make provision for a collaborative approach to delivering smaller end proposals which are too diffuse to be included within specific project packages, yet fall within the wider remit of a strategy for economic growth. Proposal should demonstrate a clear over-arching investment strategy for a specific geographical area, showing the additionality of the programme in terms of significant private sector growth and/or leverage and create sustainable private sector growth.
The following stipulations apply:
- All areas of England are eligible:
- It is anticipated that some areas of the country, particularly where there is currently a vibrant public sector, may struggle to demonstrate how they meet the second objective of the fund, and as such the assessment process will take into account intelligence from the DWP led Labour Market Group.
- Bids are invited from:
- Private sector - including SMEs, large enterprise and social enterprises).
- Public/private partnerships - e.g. involving local authorities, universities and colleges, local trusts and agencies).
- Local Enterprise Partnerships - where they are suitably constituted with clear business presence and leadership of their boards.
- Bids should meet the aims of the fund and contribute to sustainable economic growth and creation of new private sector employment.
- Bids should lever in private sector funds and align with European Regional Development Fund where possible.
- Projects must demonstrate additionality in that they would not progress without funding support and will lead to additional economic activity.
Proposals will be assessed according to five main factors:
- Rebalancing the Economy (RGF Objective 2) - the fund is eligible throughout England, but will focus on assisting the transition to private sector-led growth of the areas most dependent on public sector funding. Assessment will be based on the following factors (metrics):
- Percentage of residents (aged 16-64 years) claiming out of work benefits.
- Public sector employee job share.
- Number of active enterprises per 1,000 resident population.
- Private sector employee job growth.
- Additionality - projects must not be able to progress without RGF support and must stimulate additional economic activity. Additionality will be assessed with regard to the commercial attractiveness of the project or projects and market failures that prevent the private sector from taking the project forward without support. The assessment will also determine the minimum level of funding require for the project to process.
- Sustainable Private Sector Jobs and Growth (RGF Objective 1) - proposals must meet the main objective of the fund and deliver sustainable private sector economic growth, taking into account the commercial logic and the extent of private sector commitment. The assessment process will involve a qualitative assessment of market forecasts and quantitative assessment of the project investment and employment schedule.
- Value for Money - projects must demonstrate good value for money, with proportionate treatment of risk, uncertainty and optimism bias. The assessment will take into account the creation and safeguarding of employment, including additional benefits such as supply chain impact, R&D and skills spillover, agglomeration benefits and social and environmental impacts.
- State Aid Compliance - projects must be compliant with EU State Aid restrictions, taking into account ineligible sectors, regional aid limits in relation to the Assisted Areas and rules on eligible expenditure.
Latest Information
The deadline for receipt of applications for Round 3 is 20 March 2013
Last Significant Update Reason
Round 4 of the Regional Growth Fund (RGF) is now open to applications. £350 million is available for this round and the deadline for receipt of applications is noon on 20 March 2013.
The minimum threshold for Round 4 applications will be £1 million.
Key Criteria
Bids for funding from private bodies and public-private partnerships across England on a challenge basis are accepted. It is envisaged that bidding partnerships will come together that include a combination of large private sector players, SMEs and social enterprises working together with public partners. In particular, it is expected that Local Enterprise Partnerships (LEPs) will play a role in coordinating across areas and communities, and in bidding for the Fund.
Eligible Expenditure
It is envisaged that the Regional Growth Fund will provide a mixture of direct support for private sector investments that would not otherwise occur and which will create sustainable employment and infrastructure provision to remove barriers to private sector-led economic growth. It will subsequently provide support for some basic infrastructure that removes the barriers that trigger private sector led economic growth as part of a wider investment. Bids must, therefore, be able to demonstrate that the Fund will create long-term growth by levering private sector investment and jobs and must demonstrate how they will help deliver the objectives of the RGF.
The first round of RGF funding (operational from 28 October 2010 until 21 January 2011) was open to applications for Projects and Project Packages which are defined as follows:
- Projects: Individual projects that make a specific and significant contribution to the core aims of the RGF. These bids will individually need to meet the ‘bid threshold’ of £1 million and should be at an advanced stage of planning.
- Project Packages: A number of individually specified projects that form a coherent package and that together make a specific and significant contribution to the core aims of the RGF. In aggregate, the package must meet the ‘bid threshold’ of £1 million.
For the current round of RGF funding, Programme bids that demonstrate a clear over-arching investment strategy for a specific geographical area are accepted, in addition to Projects and Project Packages.
With a Programme, the ultimate recipients of the funding will not be known at the time of the application, rather the applicant will apply to distribute part of the RGF. The objectives of each Programme will need to be aligned with the core objectives of the RGF. It is expected that Programmes will be most workable of partnerships that involve social enterprises, such as groups of Community Development Finance Institutions. Each Programme will be required to meet the £1 million threshold.
Match Funding Restrictions
- Leverage of private sector funds will be a key criterion for successful bids.
- It is expected that bids will be match funded by other sources of investment and should align with European Regional Development Funds (ERDF) wherever possible.
Restrictions
General restrictions include:
- Public sector only bids.
- Sectors restricted under EU State Aid rules, including agriculture, steel, ship building, manufacture of synthetic fibres.
- Projects that are able to proceed without RGF funding.
- Large companies seeking capital investment must be located within an Assisted Area.
Further Information
December 2012:
On 5 December 2012 the Chancellor announced in his Autumn Statement 2012 an additional £310 million will be made available for the Regional Growth Fund, in order to “reflect on the successes of the previous rounds”. Government will confirm how applicants can apply for funding in due course.
November 2011:
The Chancellor of the Exchequer delivered his 2011 Autumn Statement to Parliament on 29 November 2011, amid fears of a double-dip recession in the UK.
A wide-ranging package of more than 140 reforms was announced to build a stronger and more balanced economy, including increasing the Regional Growth Fund by £1 billion to provide ongoing support to grow the private sector in areas currently dependent on the public sector.
Deputy Prime Minister, Nick Clegg, has confirmed that there will be at least two further rounds of bidding, with the next round opening during February 2012.
October 2011:
The Government has announced the successful bidders under round two of the Regional Growth Fund.
Additionally, the Fund has signed a strategic partnership agreement with the Scottish Investment Bank’s (SIB) Scottish Venture Fund to boost availability of equity funding for ambitious Scottish businesses.
October 2010:
On the 20 October 2010, the Chancellor announced, as part of the comprehensive spending review, that the Regional Growth Fund (RGF) would be extended to three years and increased from the £1 billion announced at the Budget to £1.4 billion. Strategic leadership in local areas will be carried out by Local Enterprise Partnerships (LEPs), who will be responsible for setting out local economic priorities.
The consultation on the Regional Growth Fund ran from 23 July to 6 September to seek views on how the fund should be operated and managed to best meet the needs of local areas and communities. The consultation included the following questions:
- Are there benefits to be had from allocating different elements of the fund in different ways?
- This question was to determine the need for the fund to be flexible in order to respond to needs on a local/regional basis.
- For example, allocations to LEPS to meet their identified priorities; scope for the RGF to issue capital investment and loans; targeting activity on an area-by-area basis that would best deliver sub-regional growth.
- What type of activities, that promote the fund objectives, should the fund support and how should the fund be best designed to do this?
- This was to determine how the fund should be allocated to meet the objectives and take into account factors and conditions that the fund should operate under.
- Do you think that these are the right criteria for assessing bids to the Regional Growth Fund?
- This question was the gauge views on the proposed arrangements for managing bids to the RGF (at least two bidding rounds, one by the end of December 2010 and another for 2012-13).
- Do you think we should operate a two-stage bidding process?
- To look at a two stage application/bidding process involving the Local Enterprise Partnerships and an Independent Approval Panel to be chaired by Lord Heseltine.
- Should a Regional Growth Fund become a long-term means of funding activity that promotes growth?
- To assess the on-going role of the RGF.
Local Enterprise Partnerships (LEPS) will be cross-sectoral partnerships, involving local authorities, private businesses and third sector organisations, that will take on many of the roles (e.g. planning and housing, local transport, enterprise, employment, supporting start-ups) currently performed by the Regional Development Agencies. Other duties will defer to national government, such as inward investment, sector leadership, business support, innovation and access to finance.
Payment Procedure
The following criteria apply:
- All areas of England are eligible:
- It is anticipated that some areas of the country, particularly where there is currently a vibrant public sector, may struggle to demonstrate how they meet the second objective of the fund, and as such the assessment process will take into account intelligence from the DWP led Labour Market Group.
- Bids are invited from:
- Private sector - including SMEs, large enterprise and social enterprises).
- Public/private partnerships - e.g. involving local authorities, universities and colleges, local trusts and agencies).
- Local Enterprise Partnerships - where they are suitably constituted with clear business presence and leadership of their boards.
- Bids should meet the aims of the fund and contribute to sustainable economic growth and creation of new private sector employment.
- Bids should lever in private sector funds and align with European Regional Development Fund where possible.
- Projects must demonstrate additionality in that they would not progress without funding support and will lead to additional economic activity.
Proposals will be assessed according to five main factors:
- Rebalancing the Economy (RGF Objective 2) - the fund is eligible throughout England, but will focus on assisting the transition to private sector-led growth of the areas most dependent on public sector funding. Assessment will be based on the following factors (metrics):
- Percentage of residents (aged 16-64 years) claiming out of work benefits.
- Public sector employee job share.
- Number of active enterprises per 1,000 resident population.
- Private sector employee job growth.
- Additionality - projects must not be able to progress without RGF support and must stimulate additional economic activity. Additionality will be assessed with regard to the commercial attractiveness of the project or projects and market failures that prevent the private sector from taking the project forward without support. The assessment will also determine the minimum level of funding require for the project to process.
- Sustainable Private Sector Jobs and Growth (RGF Objective 1) - proposals must meet the main objective of the fund and deliver sustainable private sector economic growth, taking into account the commercial logic and the extent of private sector commitment. The assessment process will involve a qualitative assessment of market forecasts and quantitative assessment of the project investment and employment schedule.
- Value for Money - projects must demonstrate good value for money, with proportionate treatment of risk, uncertainty and optimism bias. The assessment will take into account the creation and safeguarding of employment, including additional benefits such as supply chain impact, R&D and skills spillover, agglomeration benefits and social and environmental impacts.
- State Aid Compliance - projects must be compliant with EU State Aid restrictions, taking into account ineligible sectors, regional aid limits in relation to the Assisted Areas and rules on eligible expenditure.
Application Procedure
The RGF will operate as a challenge fund spread over a minimum of three bidding rounds until the end of April 2016.
The application form is in two parts. Applicants must complete both parts for their application to be deemed acceptable. Completed Expressions of Interest should be returned in electronic format to the RGF programme office at the e-mail address below.
The full application process can be viewed via the above link to guidelines; however the general stages are as follows:
- Stage 1: Expressions of Interest.
- Stage 2: Appraisal of Expressions of Interest.
- Stage 3: Sift of Expressions of Interest.
- Stage 4: Full Bid Stage.
- Stage 5: Appraisal of Full Bids.
- Stage 6: Advisory Panel and Ministerial Recommendation.
- Stage 7: Conditional Offer Letter.
- Stage 8: Confirmatory Due Diligence.
- Stage 9: Formal Offer Letter.
- Payment of Support.
Final decisions regarding support and prioritisation will be taken by a ministerial group chaired by the Deputy Prime Minister including the Chief Secretary to the Treasury and the Secretaries of State for: Business Innovation and Skills; Communities and Local Government; Transport; and Environment Food and Rural Affairs. The ministerial group will be assisted by an independent advisory panel chaired by Lord Heseltine that will make recommendations on which proposals best address the objectives of the RGF.
To ask a question about the Regional Growth Fund or to register to attend one of the road shows, interested parties should either telephone their local BIS Regional Growth Fund contact point or email the central enquiry point:
North West: 0161 952 4264.
North East: 0191 202 3838.
Yorkshire and Humber: 0113 341 2833.
West Midlands: 0121 352 5108.
East Midlands: 0115 971 2516.
East: 01223 372758.
South West: 01752 635067.
South East: 01483 882411.
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