At today’s Spending Review, the government has announced its plans for spending over the next three years, from 2022/23. This includes a number of measures to support smaller businesses, to be delivered by the British Business Bank.
Catherine Lewis La Torre, Chief Executive, British Business Bank, said: “The package the Chancellor has announced today enables us to build on our range of programmes to support sustainable economic growth by increasing the supply, diversity and demand for finance for UK smaller businesses.
“We welcome the provision of this funding to deliver our expanded programme of activity, enabling us to make over £4.9bn of financial commitments and loans. This includes £1.6bn to provide investment funds for the Devolved Nations, and the North, Midlands, and South West of England, £150m to invest alongside business angels across the UK, and resources to provide 33,000 Start-Up Loans over the next three years.”
“A six-month extension to the Recovery Loan Scheme will also provide valuable support for smaller businesses as they look beyond the pandemic towards the opportunities available to them in the recovery.”
The announcements in the Spending Review include:
Supporting finance across the regions and Nations of the UK – expanded Regional Funds and Regional Angels Programme
The British Business Bank’s three regional funds – the Northern Powerhouse Investment Fund, the Midlands Engine Investment Fund, and the Cornwall and Isles of Scilly Fund – and the Northern Ireland Growth Finance Fund have delivered over £1bn of public and private sector funding to smaller businesses in those regions, helping to address regional funding gaps.
The government recognises the success of these funds in its £1.6bn commitment to a next generation of funds:
- £660m for the Northern Powerhouse Investment Fund, including an expansion into the North East of England
- £400m for the Midlands Engine Investment Fund
- £200m to provide a new fund for businesses in the South West of England, building on the Cornwall and Isles of Scilly Investment Fund.
- £150m to provide a new fund for Scottish businesses
- £130m to provide a new fund for Welsh businesses
- £70m to expand provision for businesses in Northern Ireland
We look forward to working with the Devolved Administrations’ economic development banks and local stakeholders to deliver this increased support.
We also welcome the additional funding for the Regional Angels Programme, which will enable commitments of a further £150 million over three years, investing alongside angel syndicates into high potential businesses across all the UK’s regions and nations. The programme has fully committed its initial £100m allocation, with 85% of investments outside London helping to reduce regional imbalances in access to seed and early-stage equity finance for smaller businesses.
Multi-year settlement for Start Up Loans
The government also announced that it will provide funding for 33,000 Start Up Loans over the next three years, maintaining delivery at the expanded level agreed at Spending Review 2020.
We welcome this extension to the programme, which means that even more people across the UK will now be able to access the finance they need to start a business. The programme has a strong record of providing funding to less well represented groups including women, people from diverse ethnic backgrounds, and the unemployed. This new funding will help create more opportunities for the best talent to access finance regardless of factors such as social background, gender, ethnicity and age.
Extension of Recovery Loan Scheme
At Autumn Budget 2021 the Chancellor announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022, having already seen total funding of over £1bn offered to businesses by the scheme’s diverse range of accredited partners.
The government has confirmed that throughout the three years from 2022/23 it will continue to provide the British Business Bank with the resources to help drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by supporting access to finance for smaller businesses. This includes confirming funding for the Future Fund Breakthrough programme and the Life Sciences Investment Programme, both of which launched this year.