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EU business investment scheme smashes West Midlands job creation targets

EU business investment scheme smashes West Midlands job creation targets

🕔26.Aug 2015

An EU grant scheme to help West Midlands businesses invest in innovative new products has proved to be an unexpected success, easily beating job creation targets reports Paul Dale.

The Business Innovation Programme (BIP), an £8.7 million European Regional Development Fund scheme, will create and safeguard over 600 jobs, significantly above a target of 350, according to an independent evaluation.

BIP provides grants of between £10,000 and £30,000 to businesses to invest in capital equipment and new products and process development.

Managed by Birmingham city council, the programme has created £9 million of net additional GVA from £3.6 million of investment and represents good value for money according to a report by economic development consultants, ekosgen.

More than 60 per cent of the 252 applications made to BIP have been approved with only 11 per cent rejected, and most of the fund has now been allocated. Average grants were between £25,000 and £30,000.

The evaluation concluded:

BIP is a sound and effective initiative which has enabled many beneficiaries to invest in new technology and equipment which is delivering efficiency gains as well as having a direct impact on business turnover and profitability.

Importantly, there is evidence of businesses changing their perceptions of innovation and investment in innovation with a high proportion of beneficiaries indicating they are more likely to invest in innovation in the future as a result of their involvement in BIP.

The independent evaluation said BIP was making an important contribution to the growth of the regional economy, with evidence that it has helped unlock investment more quickly and on a larger scale than would otherwise have happened.

The report called for BIP to be extended beyond its current timetable:

There is a clear need for small-scale grant investment to help remove the barriers to innovation amongst SMEs, and the evaluation findings suggest that the design and focus and delivery model of BIP remain appropriate and fit for purpose.

There would therefore be merit in seeking additional continuation funding for the existing project.

Councillor Tahir Ali, cabinet member for development, transport and the economy at Birmingham city council, said:

It is encouraging to see independent confirmation of the benefits of this programme that we have been able to deliver to Birmingham and the wider region.

This is all about helping businesses to help themselves. All levels of government – local, national and European – have a crucial role to play in creating the right environment for businesses in Birmingham and the West Midlands to flourish by helping them to invest and grow.

We hope to secure further funding for business innovation as this programme has shown just what we can do.

The report also said the success of the project has been supported by strong project management and good engagement with partners across the region. BIP has built on the council’s previous experience of delivering business support interventions which has ensured effective administrative processes and systems have been put in place. The application and appraisal process has been ‘fit for purpose’ and represents a model of good practice, Cllr Ali added.

Not only does it provide much needed investment into local businesses with growth potential, but it provides a solid offer to help engage businesses in wider business support provision, the report adds.

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