THE head of a £125m North East loan fund is gearing up to hand the region a multi-million pound European legacy.
Spending chiefs at North East Access to Finance say they are preparing plans to reinvest tens of millions of pounds of European cash as a result of years of helping other firms.
The fund works by recycling taxpayer money loaned out in previous rounds to small and medium-sized businesses. As the cash is repaid it is then available to be spent again, one of the legacy criteria which the EU insists on when awarding regeneration cash.
Chairman Geoff Hodgson said that the fund could offer vital funding for businesses wanting to expand and create jobs in the North East as they struggle to get loans for the banks.
It is the latest role for a man who has already helped organise the North East’s part in the London 2012 Olympics, overseen successful efforts to revive tourism over the last decade and even helped run one of Newcastle’s biggest breweries.
He said: “We are talking about significant amounts of money. We are talking with the local enterprise partnerships, including Ed Twiddy and Jeremy Middleton here, and in Teesside, because they are key to the decision-making process here. European rules state this money must be re-invested in the region, almost in some cases down to postcode level, so it is here for businesses locally.
“The whole point of this organisation is to create evergreen funds, to recycle money back into the region. The biggest problem we have here is there is a complete disjoint between the banks and companies here. For the last two years, raising bank finance has been very, very difficult.
“Do I see that getting any better? No, there are too many other things in the background. They are over-prudent and I do find that frustrating. So for the funds being managed now there is a big need and there will be for the foreseeable future.”
Mr Hodgson’s team oversee the fund, which different groups will then loan out, with civil servants in the Department for Business and Department for Communities and local Government overseeing the work.
Alongside this his team will commission research to see what has worked and what has not in previous rounds of European funding. He said: “We want to work out what is the best way to spend this, because it is very important to the region. We will need to look at leverage as well, to say we have this European funding, we need to match that against other sector funding, against private sector funding or pensions fund. We need to get the best we can out of this.”
At present around 400 firms have been handed cash from a £125m pot, with hopes of helping some 850 regional businesses through loans or equity investments by 2014.
North East Access to Finance was the first regional body in England to be approved by the Department for Business to handle such a scheme.