Sajid Javid: Midlands Engine is not lagging behind the Northern Powerhouse
Sajid Javid has insisted that the Midlands Engine is not playing catch up with the Northern Powerhouse – despite a lengthy delay in the distribution of a £250 million funding pot.
The minister was in the West Midlands to sign off on the latest stage of the Midlands Engine Investment Fund, a £100,000 cash boost to provide equity finance to businesses across the region.
Last year an initial £120m fund of debt financing and small business loans was delayed for six months due to challenges over the procurement process.
Meanwhile the £400m Northern Powerhouse started distributing cash to small businesses in the second quarter of 2017.
However, Midlands Engine champion Mr Javid told the Express & Star that the delay did not mean the region was lagging behind its northern neighbours.
"Its not a case of the Northern Powerhouse against the Midlands Engine, or for that matter any part of the UK," he said.
"We don't have to choose. What we have seen with the investments and strategies around the Midlands Engine, is that it can be firing on all cylinders, as well as giving the full support to other parts of the country such as the Northern Powerhouse."
The MEIF was announced by former Chancellor George Osborne in March 2016 and is aimed at boosting the region’s economy and supporting the growth ambitions of its 780,000 smaller businesses.
The funding is distributed by the British Business Bank (BBB) and financed by the EU, using funding from the European Regional Development Fund (ERDF).
BBB chief commercial officer Patrick Magee said the cash would be the 'jet fuel' of the Midlands Engine.
He said it would help the Midlands to plug the productivity gap it suffers with other regions, noting that only four per cent of equity invested in the UK comes into the Midlands.
"This is about more than money," he added. "We want to encourage entrepreneurship and build on growth."
Pat Hanlon, Chair of the Greater Birmingham & Solihull Local Enterprise Partnership access to finance group, welcomed the funding and encouraged businesses to 'make the most' of it.
“Opening up new streams of funding to local firms is critical in encouraging our large numbers of start-ups to scale up their operations and create new employment opportunities – supporting the wider economic growth of the region in the process.”
The Midlands Engine has pledged to add £54 billion to the UK economy by 2030. To do so it needs to bring productivity up to the national average.