THE North East Combined Authority (NECA) today reaffirmed its intention to secure a valuable £120m pot of funding for the exclusive use of regional businesses.
The authority is working in partnership with the North East LEP to secure the funds.
Both organisations are working closely to an end of October deadline when funding agreements need to be signed with the UK Government and the European Union.
This is for the successor fund to Finance for Business North East, also known as JEREMIE (Joint European Resources for Micro to Medium Enterprises).
At its meeting today, in Sunderland Civic Centre (Tuesday 20 September), the NECA Leadership Board, which is composed of seven local authorities County Durham, Gateshead, Newcastle, Northumberland, North Tyneside, South Tyneside and Sunderland, agreed to put special local authority borrowing powers in place.
These powers would allow the new fund to be ready to invest in scores of North East businesses when the original scheme stops investing at the end of this year.
The successor scheme – known provisionally as JEREMIE 2 – proposes that £58.5m of European Regional Development cash, a loan from the European Investment Bank of up to £60m, and the remainder of legacy funding from previous loan investments will be brought together to create a £120m investment pot for North East businesses.
Councillor Paul Watson, the Chair of NECA, said: “We are working closely with the North East LEP to ensure this highly successful fund continues next year and for many years to come.
“Equity investment and loans are crucial for new and growing firms to be able to plan ahead with greater certainty, creating new jobs and economic growth in the North East.”
It is estimated that JEREMIE 2 could provide financial support for 600 businesses; help create around 3,500 jobs over the next five years and deliver a legacy fund of up to £80m over the next decade for further financial support to businesses.
JEREMIE’s predecessor has already seen more than £140m invested, leveraged in a further £200m for nearly 900 small to medium enterprises, and helped create or safeguard thousands of jobs.
Andrew Hodgson, Chair of the North East LEP, said: “We are working hard with our partners at NECA to ensure that the new equity, loans and mezzanine finance will be in place ready to invest in fast-growing, high potential firms from next year.
“The original Finance for Business North East Fund has been a major success story for the region and we are determined to extend this investment support to many more companies in future.
“Since its launch in 2010, it has invested £147m in 890 North East businesses, helping them to secure an additional £213m of other finance and to create and safeguard 6,400 jobs.”
The report to the leadership board outlined how the fund would help businesses to access finance supporting their growth and expansion plans; plus how smaller businesses would remain in the region if they can secure capital and how they would also source staff and materials locally.
Cllr Watson added: “As an authority NECA continues to do all it can to maximise economic opportunities by attracting, supporting and, where possible, funding investment opportunities.
“This funding is good example of devolved decision-making as it helps address the idea that local knowledge helps best address local needs.”