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Growing businesses through grant funding

15 February 2021: Ian Dixon is a Director of Smart Technology Advisers – an independent technology advisory business – but he is also a member of the Investment Panel of the Humber (soon to be Hull and East Yorkshire) LEP. What drives the LEP’s investment decisions?

The role of Local Enterprise Partnerships (LEPs) is to drive the growth of the local economy. As a voluntary member of its private sector Investment Panel, Dixon contributes to decisions on business grant and loan applications, drawing on his commercial and financial experience and expertise.

The LEP has net-zero aspirations and is working alongside partners to work towards being a global leader in clean energy and accelerate clean growth on what it terms the “energy estuary” of the Humber. It aspires for the area to become a hub for energy-intensive industries – which it will serve with clean energy from within and around the estuary – and there are plans to develop the area's ports and manufacturing clusters too. 

It is a region that connects the UK with its international suppliers and trading partners through its international ports complex, as well as having a long-earned reputation for engineering and assembly of manufactured components. But it is also a significant food-producing region with an increasing reputation for transformative technology.

Not only does the LEP commit itself to generating more jobs, but also better jobs, that will enable the delivery of both the local and the national industrial strategies. To do this, business growth by the right teams within the right companies with the right strategies is needed.

And the LEP has been actively investing where it sees these criteria are met. Comprising business owners, financial advisers, bankers, solicitors, property experts and other professionals, the Investment Panel of the LEP – including Dixon – is charged with investing in applicant businesses where certain criteria are met.

“We’ve committed almost £12m from the Humber’s Local Growth Fund allocation through Growing the Humber business investment grants and we’ve generated over £53m worth of private sector leverage.” Says Dixon. “To apply for a grant, the applicant has to commit to investing a certain amount of private sector funding alongside any funds they require from the LEP. And we are on target to create around 950 jobs as a direct result of this funding programme, with 800 having already been created. In the Humber area, that’s a large number of jobs.”

The applicants are mainly SMEs, but some larger businesses have also been successful in applying too. Businesses range from niche sectors within food production to a range of manufacturing activities. Despite their differences, they all have one thing in common - they are ambitious to grow their businesses in the Humber area and are looking for a grant (or sometimes a loan) to help provide that last piece of funding they need to take them to the next level of growth. Dixon comments that all applicants need to clearly demonstrate a need for funding, otherwise the application is likely to fail.

Applications coming in front of the Investment Panel need to demonstrate what the project is about, how it fits into the business’s growth plans, its opportunity to create jobs within an agreed timeframe and why funding from the LEP is needed to make it a success.

Dixon comments that grant applicants would do well to follow some basic principles when making applications for grant funding. These are:

  1. Come to us with a clear business plan, supported by realistic forecasts, etc. These will be scrutinised and rejected if incomplete and/or too optimistic.
  2. Understand and be able to talk about your business in terms of the local economy, how you will generate and sustain the number of jobs you are committing to (job creation is monitored as part of the grant process post-approval) and how you will deliver the project within the timeframes you are alluding to.
  3. Be clear about what form and how much private sector funding you are committing to the project, eg asset finance, own funds, sale of assets, etc.
  4. Demonstrate in your application what training and skills you will be offering the new employees you are proposing to recruit.
  5. Remember that people often invest in people, so demonstrate in your application what experience and expertise you have within your business to ensure the project is a success. The Panel occasionally allows applicants to present their application in person, so be prepared to be quizzed!

The Humber region is brimming with talent – Hull University is located in the region, but York University and Lincolnshire University are just across the border – and a number of further education colleges complete the picture, many of which work with local businesses to deliver and support apprenticeship training.

What is clear about the Humber region is that its legacy of ports, manufacturing and engineering continues to create the basis on which growth will be built – albeit that green energy will underpin all these industries.

But the smaller companies – the ones that need a leg up via grant funding, especially in the prevailing harsh economic climate – contribute to the complex business matrix of the region too, and are perhaps the unsung heroes of local employment and community-building.