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Small businesses set to cash in with £32 million HS2 growth fund

Small businesses set to cash in with £32 million HS2 growth fund

🕔17.May 2016

Almost 600 small West Midlands engineering supply chain businesses will benefit from a £32.6 million HS2 expansion fund.

A Business Growth Programme (BPG) financed through the European Regional Development Fund and private sector contributions will operate in areas covered by three local enterprise partnerships – Greater Birmingham and Solihull, Stoke-on-Trent and Staffordshire and The Marches.

The programme, to be run by Birmingham city council, is designed to provide cash grants to 576 small and medium enterprises, specifically supply chain businesses targeted on HS2 suppliers.

The fund has been developed to help with purchasing new plant and equipment, relocating to new premises, developing new products and processes, systems and marketing, coaching and mentoring, especially where energy efficiency and green benefits can be identified.

A report to Birmingham city council cabinet sets out benefits flowing from the fund:

The BGP will contribute towards the city council’s priority outcome one: A Strong Economy by helping SME’s within the eligible area to grow and create new job opportunities. The proposal will also support strategic initiatives such as Enterprise Zone and Economic Zones by attracting investment and supporting the development and growth of businesses in the region.

BGP is also fully aligned to the GBSLEP ‘The Midlands HS2 Growth Strategy’, which seeks to maximise the benefits of the largest infrastructure project in Europe and accelerate the UK’s engine of growth.

Total BDG project expenditure is anticipated to be £32.588 million, comprising £16.294 million ERDF grant and an equivalent amount of public and private sector match funding.

The ERDF grant will support estimated grant payments to SMEs of £14.775 million and programme delivery costs to the city council which are estimated at £1.519 million.

BGP is described as “an integrated and comprehensive business support package strengthening supply chain companies, stimulating innovation and growing existing SMEs”.

It is designed to respond to new opportunities from investment on the HS2 high speed rail project and will typically provide revenue and capital grants of between £10,000 and £200,000.

BGP will target SMEs:

  • Requiring grant interventions in innovative production processes leading to new products and services, which are close-to-market.
  • Looking to expand, relocate and improving access to markets.
  • Creating jobs for people from within the local enterprise partnership areas

An Investment Board with powers to allocate grants will be led by an independent chair from one of the LEPs. It will comprise three LEP partners, four industry experts, and two university representatives.

Cllr Tahir Ali, the current Birmingham cabinet member for development, transport and the economy, said the BGP would provide a “comprehensive business support programme” for supply chain companies.

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