Chancellor announces £200m fund for the South West
The Chancellor has announced a £200m regional fund for the South West as a key part of the Government’s commitment to overcoming regional imbalances, specifically in access to finance for SMEs.
The new fund will provide significant scale growth capital for businesses and offer a combination of debt and equity funding to help businesses grow and create jobs.
Delivered by the British Business Bank, this builds on the success of the existing regional funds in operation since 2017 including the Cornwall and Isles of Scilly Investment Fund which was launched in 2018 and was set up by the British Business Bank and the Cornwall and Isles of Scilly Local Enterprise Partnership.
The Regional Funds have helped address market failures in access to finance, and are demonstrably effective in supporting regional economic growth, through supporting the creation of high-paying high productivity jobs, upskilling existing workforces, and supporting the scaling up of regional businesses.
The new South West fund will build on the success of the Cornwall and Isles of Scilly Fund across the wider region.To date the CIOSIF has invested £8.2m in 35 local businesses, attracting £16.2m of additional finance and is forecast to create around 400 jobs. Among its most recent investments is a £500,000 equity stake in Cornish sustainable packaging business Flexi-Hex as part of a £1.25m funding round.
The new fund is HMG funded and its design is subject to consultation with local stakeholders.
Catherine Lewis La Torre, CEO of British Business Bank, said: “Our regional funds are focused on those areas of the country where securing access to finance for small businesses is most challenging. We have seen how these funds address those market weaknesses and help change perceptions among businesses and other investors about investment opportunities in the regions. Our Cornwall and Isles of Scilly Fund continues to invest in the region and we welcome the opportunity to support smaller business in the wider South West region.”
LEP non-executive director John Acornley, who chairs the CIOSIF Advisory Board, said: “The LEP worked very hard to establish a fund for Cornwall and the Isles of Scilly because we knew there was a significant market gap in debt and equity finance. We’re delighted that the British Business Bank can now build on our achievements with a new fund for the South West as Cornwall will benefit from a thriving regional economy, with more opportunities for business growth and job creation especially in the post-pandemic recovery.”