Around 6,000 square metres of new industrial space is set to be created in Lancashire if the government gives the go-ahead to an EU-funded project to boost the county’s small and medium-sized businesses.
A £25m urban development fund (UDF) could be established later this year to spearhead projects which “the market would not otherwise invest in”, a meeting of Lancashire County Council’s cabinet heard.
It would involve loaning a £15m European Regional Development Fund (ERDF) grant to projects focused on creating commercial and industrial floorspace -with the aim of attracting a further £10m in private sector investment. The ERDF cash first has to be approved for release by the UK’s Ministry of Housing, Communities and Local Government.
The total pot would be used primarily to develop small units of around 930 square metres in size, but with some larger facilities built as part of the overall investment.
Papers presented to cabinet members said the cash would be used to help stimulate the region’s small and medium-sized enterprises – and make them more productive. It is hoped that the funding could also be used to unlock development sites which are currently stalled – and so boost employment in the county.
Cabinet members gave the green light to the recruitment of a fund manager, once the ERDF money has been confirmed. The estimated value of the contract is £330,000 per year.
The manager will be responsible for marketing the fund and making investment decisions, but will be guided by a local investment strategy which will be developed as part of the process. The meeting heard that the fund manager will be accountable to Lancashire County Council’s chief executive and the board of the Lancashire Enterprise Partnership.
EU rules state that as well as targeting small and medium-sized businesses, ERDF money should also be focused on at least one other specific sector – either innovation and research, the digital agenda or the low carbon economy.
The ERDF cash will stop in June 2023, after which point it is hoped that the returns and interest generated by the original projects will be sufficient to continue investing in new schemes over the longer term. Those resources would also be used to cover the costs of the fund manager once the EU money has dried up.
For the first four years of the UDF, 40 per cent of the fund manager costs will be covered by Lancashire County Council, with the ERDF cash covering the remainder.