Engineering news
Local enterprise partnerships are “potentially more powerful” than the regional development agencies they replace because they can work together to serve specific areas of the economy rather than operating geographically, the Greater Birmingham and Solihull partnership has said.
Steve Hollis, the organisation's deputy chairman, made the comments in the wake of an announcement that a number of local enterprise partnerships (LEPs) from across the country working together had secured £25 million from the Regional Growth Fund for engineering suppliers. LEPs from the Black Country, Coventry and Warwickshire, and Liverpool City Region worked with Birmingham and Solihull on the bid.
Hollis told PE: “This has been an example of a working partnership that potentially is more powerful than having a big pot of money that you then have to distribute reasonably evenly around a geographic patch.
“The important point to note is we're not competing against each other. We're there with a common cause: to try and create employment, create investment in new industries and encourage start-ups.”
This is the first time that LEPs have worked together to win funding in this way, they said. Rather than focusing on regions, the LEPs cooperated to look at sectors.
Grants or loans will be made available to suppliers for tooling costs, for example, and will be expected to be repaid. However the terms are far preferential to those of banks, which can be reluctant to lend to small engineering firms in the current climate, Hollis said.
Grants could provide 10-20% of the finance required by suppliers to prepare for new orders, with the rest of the funding coming from other sources, where risk would be reduced by the initial loan.
Hollis said: “I don't think credit conditions have got worse, but it's hard to say they are better. Public money will hopefully de-risk part of the lending proposition for banks.”