Auto manufacturers with operations in England are increasingly tapping into funds being made available from the UK government’s Regional Growth Fund, with Nissan being the latest company to benefit from GBP9m (US$14m) in cash – even in these straitened times – for its new Sunderland-based Invitation model. The Department for Business, Innovation & Skills (BIS) talked to Simon Warburton about the implications for the UK car industry and how manufacturers can benefit.
j-a: Just what is the Regional Growth Fund?
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BIS: “The Regional Growth Fund is now a GBP2.4bn fund operating across England from 2011 to 2015. It supports projects and programmes that lever private sector investment to create economic growth and sustainable employment. It aims particularly to help those areas and communities which were dependent on the public sector to make the transition to sustainable private sector-led growth and prosperity.”
j-a: Nissan’s GBP9m aid from the government sounds fairly small – how can it be levered?
BIS: “With the RGF, it means the government gives a grant, but they [Nissan] has to have private investment. The GBP9m is just a small fraction of the investment Nissan will be making.
j-a: How do automakers go about submitting an RGF bid?
BIS: “The RGF is a cross-government thing – we have a third round open at the moment – bids are assessed by [former Business Secretary] Lord Heseltine and then they are recommended to a committee chaired by [Deputy Prime Minister] Nick Clegg.”
j-a: What are the criteria to receive public backing and how does the ‘regional’ in RGF work?
BIS: “A successful project needs to show it can create new jobs and to create [them] where there are likely to be cuts in the future. Sunderland would fit that bill. The amount they are bidding for should be the minimum amount the project needs to get off the ground.”
“For the auto sector, we have had quite a few successful bids. They have to go through a series of legal checks and that the [bids] are sustainable for the company itself and not realise a few years down the line it is a big mistake.”
j-a: Has Nissan actually received the finance from your department yet?
BIS: “Nissan is going though due diligence. It is different for different companies. Some are quite quick, some like Nissan take a bit longer for reasons on their side rather than ours. We have not had any companies withdraw as yet, but that is what the process is for.”
j-a: The RGF seems to replace Regional Development Agencies money – why did you change the system, was it at the last general election in 2010?
BIS: “When we closed down the Regional Development Agencies, a lot of their funding was to invest in [auto] projects of that type. The issue was they were not always supporting the right kind of projects and companies. The RGF was created when the new administration came in.”
j-a: What other auto bids are going through the BIS due diligence process?
BIS: “Projects going through due diligence are Unipres and Vantec which are Nissan suppliers. Other companies are General Motors, Lotus, Jaguar Land Rover, Pirelli Tyres, Getrag Ford, Aston Martin and Bentley.”
j-a: The government has been making much noise recently about apprenticeships – to what extent is the RGF designed to encourage such a move?
BIS: “One of the Bentley projects is to up-skill staff and make sure they have the right skills. There is definitely a skills and apprenticeship focus on some of the bids.
j-a-; When is the next deadline for RGF bids to be submitted?
BIS: “Round three of funding is open to bids – there is GBP1bn up for grabs. Closing date is 13 June.
