West Midlands 'left behind' as bulk of Government fund given to south of England

The Future Fund was launched to help new firms struggling to deal with the financial impact of the pandemic, offering Government loans which had to be matched by private investors.

In the West Midlands 30 firms put in successful applications and received £20.6 million – around two per cent of the £975.7m paid out up to December 17.

The data from the British Business Bank shows the region's firms had a 79 per cent success rate for applications, with start-ups awarded an average of around £687,000.

The majority of the funding went to London, where firms received £590.6m, and the South East, which saw £120m worth of loans approved.

Around two thirds of the 1,055 successful applications came from London firms, which saw an average award of just over £1m. In the North West 71 per cent of applications were successful, with £51.8m awarded.

Labour politicians say the figures showed the West Midlands was being "overlooked and left behind", while Tories say they highlight why the Government's work to level up the country was "so badly needed".

Birmingham MP Liam Byrne, Labour's candidate for West Midlands Mayor, said it was clear there was "more money to help" firms in London and Manchester.

He said: "Once again the West Midlands is being overlooked and left behind."

Mike Wood, the Conservative MP for Dudley South, said ministers were committed to balancing up the country's economy.

"This highlights why the work the Government is doing to level up the economy is so badly needed," he said.

"We want the West Midlands to be the best place to start up a new business.

"It's great to see the businesses that have applied having such a high success rate, but we need to be changing the way that government makes decisions about added value and invests in local skills and regeneration in the region, so that when people come to decide where they are going to invest or where they are going to base their new business, the West Midlands – and particularly the Black Country – will be the obvious place.

"We've still got a long way to go until that is the case. People who do start a business here should know that it has got the very best chance of success."

A Government spokesman said: “We have provided an unprecedented £280 billion of support for businesses affected by Covid in every nation and region of the UK.

“The Future Fund uses a set of standard terms with published eligibility criteria, independent of ministers. This a clear, efficient way to make funding available as widely and as possible, irrespective of location.

“In addition to the Future Fund, the British Business Bank has provided nearly half a billion pounds to high-growth firms outside of London.”

Shadow Business Secretary Ed Miliband accused the Government of "reinforcing economic imbalances" by investing more heavily in start-ups in London.

To qualify for the fund, firms needed to have raised at least £250,000 in equity investment from third-party investors over the past five years. Any loans that are not paid back become a stake in the company.

The fund closed to applications on January 31.