Only 11% of loans from the British Business Bank pandemic fund went to northern companies
Figures seen by the Yorkshire Post reveal that of the 1,236 convertible loans granted by the British Business Bank’s Future Fund, only 35 went to companies in Yorkshire. In the meantime, 696 loans have been granted to London companies.
Of the £ 1.2bn loaned under the scheme by Sheffield Headquarters British Investment Bank, a total of £ 33.7million was sent to Yorkshire businesses. This compares to £ 720.1million for businesses located in London and £ 147.8million in the South East, accounting for almost three-quarters of all loans.
The Future Fund program was launched by Chancellor Rishi Sunak in April last year. It is designed to issue convertible loans to what it at the time called “good potential UK companies which typically rely on equity investments and are currently affected by COVID-19”.
The Treasury said the program will provide financial assistance throughout the coronavirus crisis to enable successful applicants to continue “on their growth trajectory and reach their full economic potential.”
It closed to new requests in January.
Henri Murison, Director of the Northern Powerhouse Partnership, said: “Although the funds allocated have greatly helped the Northern Powerhouse companies, London and the South East received three quarters of all loans, compared to just 11% for the Northern Powerhouse. North.
“While this reflects the sectors and stage of growth supported by the fund, in order to compensate for this imbalance, the North needs a patient capital fund to ensure both growth and decarbonization in the recovery.
“We will call on all political parties to present thoughtful and coherent proposals to close the North-South divide as we move to ensure recovery.
A spokesperson for the bank said: “The Future Fund is monitoring the market and initial fears about a potential regional bias have not been confirmed, with distribution to regions being higher than equity market levels more generally.
“The British Business Bank’s 2019/20 Small Business Finance Markets report showed that regions outside of London received 34% of equity investments by value in 2019. Applications that met all eligibility criteria received investments, regardless of their location.