Business Grants - Business Recovery and Growth Fund
North Lanarkshire Council · 29 August 2022
Back to Enterprise, Growth and Fair Work Committee — 29 August 2022 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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North Lanarkshire Council Report Enterprise, Growth & Fair Work Committee Does this report require to be approved? ☒ Yes ☐ No Ref: GF/CW Date 29/08/22 Business Grants - Business Recovery and Growth Fund From Pamela Humphries, Head of Planning and Regeneration E-mail weiry@northlan.gov.uk Telephone Yvonne Weir Enterprise Manager 07508 001238 Executive Summary Following committee approval in August 2020, the council has progressed delivery of two in-house business grant schemes, namely the Back to Business Fund (BBF) and the Business Recovery and Growth Fund (BRGF). The purpose of this report is to seek committee approval to increase the maximum grant available to applicant businesses under the BRGF scheme from £20,000 to £50,000 per business over a 24-month rolling period. Raising the maximum grant threshold will give the council the flexibility to assist larger growth investments and projects of scale, resulting in increased impacts and outcomes from the business projects supported by the funding. Recommendations It is recommended that the Committee: 1) Approve the proposed change to the North Lanarkshire Council Business Recovery and Growth Fund, specifically to increase the maximum cumulative grant that can be awarded to an individual business from £20,000 to £50,000 over a 24-month rolling period. 2) Approve an increase in the number of capital expenditure, infrastructure improvement and combined capital expenditure/infrastructure grants to a maximum of 2 grants per business subject to the £50,000 maximum cumulative grant award per business over a 24-month rolling period. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (5) Grow and improve the sustainability and diversity of North Lanarkshire's economy
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1. Background 1.1 Whilst the wide range of Covid-related business funds delivered by both the council and other external parties on behalf of the Scottish Government focussed on supporting cash flow, fixed costs and loss of income, the council put in place a Back to Business Fund and a Business Recovery and Growth Fund to support businesses requiring financial assistance to adapt and grow in order to realise their growth ambitions aligned to the council’s Economic Regeneration Delivery Plan and Economic Recovery Plan. These funds have a budget of approximately £1.7m, excluding ERDF funding. 1.2 The funds are competitive and discretionary seeking to support as many businesses as possible. The funds seek to support local businesses to recover and grow following the impact of Covid-19. More recently, businesses have faced increased challenges arising from pressures on supply chains and rising input costs, leading to higher operating costs. By providing project-specific funding, the BRGF scheme offers businesses assistance to take forward growth projects despite the increasing financial pressures arising from global economic conditions. 1.3 Specifically, the council’s Business Recovery and Growth Grant Fund currently provides grants of up to £20,000, targeted at existing Small and Medium sized Enterprises (SMEs) to support their strategic, longer-term sustainability and growth. This grant funds specific activities to help businesses adapt and grow following the impacts of Covid on their operations through Capital Expenditure, Infrastructure Improvements, Training Support, Consultancy Support and Exhibition Support. In contrast to the Covid grants previously administered by the council, the BRGF grant scheme is geared towards supporting specific growth projects and cannot provide funding towards day-to-day working capital requirements. 1.4 The maximum grants currently available via the BRGF scheme are outlined below. BRGF grants can only contribute up to 50% towards eligible project costs (excluding VAT), and so a financial commitment from the applicant business is required in the form of match funding (minimum 50%): Project Type Maximum grant Capital Expenditure £20,000 Infrastructure Improvement £20,000 Combined Capital Expenditure and Infrastructure £20,000 Consultancy Support £5,000 Exhibition Support £4,000 Training Support £4,000 Furthermore, applicant businesses can only apply for and receive one BRGF grant per category within a rolling 24-month period, and the maximum cumulative BRGF grant awarded to any business within a 24-month period is limited to £20,000 at present. 2. Report 2.1 The financial support available from the Council continues to be a valuable mechanism to help businesses adapt, grow, and recover from the impacts of the Covid-19 pandemic, and also helps them take advantage of new business opportunities at a time when increasing economic pressures are creating financial barriers to growth. However, despite these challenges, growth opportunities also exist in various industry sectors within North Lanarkshire and many businesses are now undertaking expansion projects.
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2.2 The increasing scale of investment proposals coming forward to the council from local businesses has resulted in a recommendation that there should be an increase in the maximum grant to £50,000 in order to help these larger projects take place sooner, on a larger scale, or to achieve enhanced outcomes. The council has received specific enquiries from a number of applicants concerning any flexibility to apply for grant in excess of the current £20,000 maximum. Typically, such examples relate to conversion or fit-out of commercial premises (for example when a business is re-locating to accommodate growth), or to investment in advanced industrial plant and machinery required to enable expansion into new markets or improved productivity. Debt finance via Business Loans Scotland can be an alternative source of funding for some of these projects, and where appropriate the council will signpost companies to BLS, however in terms of grant funding there are very few other options available to local SMEs apart from the council’s business grant schemes. 2.3 The requested increase to the maximum grant value would only apply to Capital Expenditure and Infrastructure Improvement project proposals received from businesses, as such investments tend to be of a scale which generates the greatest economic benefit in terms of job creation, turnover growth and local economic impact. Raising the maximum grant threshold will give the council the flexibility to assist larger growth investments and projects of scale, resulting in increased impacts and outcomes and potentially an increased return on the council’s investment. It is recommended that the current grant thresholds for Consultancy Support, Exhibition Support and Training Support remain unchanged as outlined in Section 1.4 above. 2.4 The demand for BRGF grants to date provides some context of the business growth and innovation that is taking place despite prevailing economic conditions. Since autumn 2021, the BRGF scheme has approved 58 grant applications from 45 businesses, totalling £629,171.61 in grant funding. A further 12 applications from 8 businesses are pending assessment or currently awaiting supporting information, equivalent to an additional £169,144.96 in potential grant awards. Supported projects encompass a wide range of major investments, but frequently feature large-scale conversion and improvement of premises or the purchase of expensive items of equipment and machinery to facilitate business growth (as referenced above). 2.5 The impact in terms of job creation and turnover increase within the businesses receiving support is significant and these projections are recorded when a grant application is received and then actuals are requested from the business once the project is completed (within 12 months of the grant award date). The projections at application stage for the approved and pending applications are: • 61 jobs created immediately • 210.5 jobs created after 12 months • 460 jobs safeguarded immediately • 499 jobs safeguarded after 12 months • £11,364,999.50 increase in turnover 2.6 The additional funding required to extend the maximum grant amounts will be funded through the Local Authority COVID Economic Recovery (LACER) funding received by the council from the Scottish Government to support local economic recovery and through the drawdown of funding from the European Regional Development Fund. 2.7 It is proposed that the BRGF grant maxima for Capital Expenditure and Infrastructure Improvement projects is amended as follows:-
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Type of grant PROPOSED maximum number of grants in a 24- month period PROPOSED maximum grant award in a 24- month period – New Applicants PROPOSED maximum grant award – Previous Applicants (within a 24 – month period) Capital Expenditure 2 applications £50,000 £50,000 minus previous BRGF award Infrastructure Improvement 2 applications £50,000 £50,000 minus previous BRGF award Combined Capital Expenditure and Infrastructure 2 applications £50,000 £50,000 minus previous BRGF award Consultancy Support 1 application £5,000 £5,000 Exhibition Support 1 application £4,000 £4,000 Training Support 1 application £4,000 £4,000 2.8 In addition to the above limits per category of grant, the maximum cumulative BRGF grant awarded to any business within a 24-month rolling period will be capped at £50,000. This includes all capital expenditure, infrastructure, consultancy support, exhibition support and training support funding for which the applicant may apply. Furthermore, the total amount of public sector funding support for the project in question must not exceed 50% of total project costs (exclusive of VAT). 2.9 For applicants who previously applied for BRGF grant support since the launch of the scheme in November 2021 (when the maximum grant was capped at £20,000) it is proposed that businesses can now be considered for additional grant support (for new projects) up to a maximum cumulative BRGF grant award of £50,000 within a 24-month rolling period. 3. Measures of success 3.1 North Lanarkshire Council continues to play a leading role in supporting local SMEs and aiding their growth and prosperity. The North Lanarkshire Business Recovery and Growth Fund measures the number of jobs safeguarded, jobs created, number of businesses supported and any growth in turnover as a result of the support provided. 4. Supporting documentation 4.1 The existing Business Recovery and Growth Fund guidelines can be viewed at: Business Recovery and Growth Fund | North Lanarkshire Council. Pamela Humphries Head of Planning and Regeneration
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The total budget for the programme is £1,314,283.60 which is subject to approval of an additional £450,000 of ERDF funding. The North Lanarkshire Council additional match funding required to extend the grant amounts will be funded through the Local Authority COVID Economic Recovery (LACER) funding received by the council from the Scottish Government to support local economic recovery and through the European Regional Development Fund (ERDF). ERDF will be in place until June 2023. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact
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Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Changes to the grant scheme criteria will be published on the council’s website and promoted on social media channels. 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The key risks which are assessed and recorded in the Service Risk Register are as follows: - Fraud: The council has robust grant processes in place. Grants are paid retrospectively following evidence of expenditure by the business. - Eligibility of grants for the European Regional Development Fund: All grants are checked for compliance prior to payment to ensure there is no risk of non-compliance with funding rules and regulations.