Grants to Expand and Modernise a Business

The UK government has stated its belief that private sector expansion will create jobs and prosperity. Businesses, however, require capital to expand. Many also need to modernise their fixed assets such as machinery, buildings and technology in order to remain competitive. Again, this requires capital.

Previously, companies could seek help from Regional Development Agencies (RDAs). These were abolished in 2012; Local Enterprise Partnerships took over some of their functions with an emphasis on locally-based business knowledge, although government support for LEPs ended in 2024 and their responsibilities have since passed to local and combined authorities.

Along with the closure of the RDAs, the government has ended the Grant for Business Investment scheme. This provided capital to help businesses grow and improve their facilities. For a time the only proposals that remained eligible for money under the Grant for Business Investment scheme were those for large-scale, unique projects, and for projects instigated by makers of offshore, wind-driven power-generators; the scheme is now fully closed.

New Initiative

With the closure of the Grant for Business Investment scheme to most proposals, the government launched a new initiative: the Regional Growth Fund (RGF). In general terms, the aim of the fund was to encourage the private sector to develop and create jobs. The RGF has since closed: its final bidding round was held in 2014 and the programme ended in 2017. No new applications are accepted. For business grants and finance available today, check GOV.UK.

In practice, this means that the government wants the private sector to expand and modernise. This goal is no different from the broad intentions of similar grant schemes in the past. There is, however, a difference in the detail of the RGF’s purpose.

Difference

In broad terms, the RGF accepted grant proposals that are likely to bring long-term growth to the economy. But there is a specific rider to this objective: proposals made to the RGF should preferably apply to communities that have relied on the public sector for employment. Projects should help these communities transfer their working-age residents to long-term private sector jobs.

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Who Can Apply?

Anyone applying for RGF money had to bear the above point in mind. Applicants also had to be from public/private partnership organisations or from private companies. The Department for Business Innovation and Skills (BIS), the body that administered the RGF, advised that partnerships are likely to be a mix of public bodies, social enterprises, small- and medium-sized enterprises (SMEs) and private entrepreneurs. BIS itself no longer exists: it became the Department for Business, Energy and Industrial Strategy in 2016, and its business functions now sit with the Department for Business and Trade.

To this advice, BIS added that it expected Local Enterprise Partnerships to become involved. These could organise bids for money and act as the lead bodies that submit grant proposals.

BIS gave one further piece of guidance. There were no restrictions on where in England the bids for money could come from; but areas with low unemployment, a good general standard of living and a thriving private sector were at a disadvantage. Bidders from such areas could find it hard to show how they can adjust any imbalance between public sector reliance and private sector growth.

Successful Grant Bids

As already indicated, grant applications had to directly address the way in which private sector development will provide work for those who may lose their jobs in the public sector. What’s more, the RGF would not give grants for projects that proposed schemes with a high element of risk. Grants had to lead to certain long-term expansion. This would only occur if projects create jobs and stimulate investment from the private sector as well as the government.

Any attempt to expand and modernise may also need improvements to infrastructure such as roads, services and buildings. RGF was willing to help fund such improvements if they were essential for business growth.

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Money Available

The RGF had a total of over £3.2 billion available over the period from 2011-12 to 2016-17. Grant applicants had to bid for a minimum of £1 million.

The amount of a bid for RGF funds had to represent the lowest sum of money necessary for a project. In other words, bids had to be competitive and grounded in realism.

If it was clear to BIS that a proposal would take place whether it approved RGF funding or not, the bid would fail.

The Decision Makers

The government made RGF grant decisions through BIS. The people who had the final say on bids were the Deputy Prime Minister; the Secretary of State for Business Innovation and Skills; the Secretary of State for Transport; the Secretary of State for the Environment Food and Rural Affairs; the Secretary of State for Communities and Local Government; and the Chief Secretary to the Treasury.

Lord Heseltine chaired an Independent Advisory Panel that submitted bid recommendations to this ministerial group.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Grant Eligibility Finder lets you tell us what you need funding for and we will match you with the types of UK grant most likely to accept your application. Try it now →