Memorandum submitted by The Glasgow Regeneration
Fund (15 July 1998)
WHAT IS
THE GLASGOW
REGENERATION FUND?
1. The Glasgow Regeneration Fund is a unique
organisation, comprising a partnership between the Glasgow Development
Agency, Glasgow City Council and the private sector. (We have
attached a fact file, which gives an at a glance guide to the
Fund*[1]
).
2. Developing Strathclyde, a company limited
by guarantee, was formed in 1993 to operate the Glasgow Regeneration
Fund whose remit is to provide funding of last resort to new and
existing companies who would find it difficult to secure finance
from traditional sources. The GRF will consider offering financial
support for example to a person, or persons who a traditional
funder might not consider because they do not have any security
to offer, ie a tenant or an unemployed person.
3. Currently the £3 million Fund operates
only in Glasgow's eight regeneration areas—Castlemilk, Drumchapel,
East End, Glasgow North, Gorbals, Govan, Greater Easterhouse and
Greater Pollok.
4. However, it was the original intention
of those involved in the formation of Developing Strathclyde Ltd,
which included the now defunct Strathclyde Region, that the principles
of the Fund could and would be extended to other parts of the
Region.
5. With the demise of the region this did
not happen though there is nothing to prevent other local authorities
and enterprise companies throughout Scotland adopting our model,
and tapping in to our extensive knowledge and experience.
WHAT HAS
THE GLASGOW
REGENERATION FUND
ACHIEVED SINCE
ITS FORMATION?
— Over £1.5 million has been invested
in loans, grants and equity.
— Around 200 companies, half of them
start-ups have been assisted.
— Over 1,200 jobs have been created
and over 250 saved.
INWARD INVESTMENT
V INDIGENOUS
INVESTMENT
6. We fully understand the need to provide
a balance in all aspects of economic investment. Inward investment
by its nature will always tend to go towards attracting the larger
companies, and therefore in terms of publicity will always gain
the most coverage in the media.
7. Bodies such as ours who finance the smaller,
micro enterprise perhaps only creating two or three jobs are not
likely to go in the same media coverage. This could distort the
reality of existing funding arrangements with a growing public
perception that more is being done to attract inward investment
than is being done to assist indigenous companies or entrepreneurs.
8. The same can be true of our policymakers
who may not be aware of what is being done to stimulate indigenous
enterprises at grass root level, and the economic impact that
assistance is having.
9. It is our belief that an informed balance
has to be determined and maintained in the current and future
allocation of resources and that there should be strategic decisions
made at senior political levels as to the broad division of financial
support aimed at inward v indigenous.
10. We would argue that the time is right
to consider an increase in financial assistance offered to leading
edge organisations such as ours who are involved in socio-economic
investment.
11. The European Union is moving towards
implementing subsidiarity policies, and power at home is being
devolved to a Scottish Parliament. Policymakers and planners realise
that we have to tackle the problem of social exclusion by formulating
inclusive policies. Partnership with local communities is seen
as the way ahead if deprived areas are to be regenerated. We believe
that the model of the Glasgow Regeneration Fund can play a role
in future partnerships using the experience we have already gained
in this field.
12. We have built up a fund of knowledge
and experience in the field of social economics. The Chief Executive
of the Glasgow Regeneration Fund is invovled at director level
with the UK Social Investment Forum, also a founder member of
the Rebuilding Society Network. In recent weeks he has been requested
to join the UK steering committee of the ILO to discsuss the issue
of providing wider access to capital.
13. In a recent article in The Observer
newspaper (31 May 1998) outlining the Government's attack
on social exclusion the Prime Minister wrote: "I have asked
the Treasury, with Trade and Industry, Environment, Transport
and the Regions, Education and Employment and Social Security
to work alongside the Social Exclusion Unit to look at another
crucial area: helping people in many of Britain's poorest areas
to get access to the capital and know-how to start their own businesses,
and help themselves out of poverty."
14. In Scotland we have had an "access
to capital initiative" in the shape of The Glasgow Regeneration
Fund for five years. As in any new initiative problems were encountered,
but we have learnt from these and now have extensive strategic
as well as operational experience in this area.
15. We believe the Select Committee, when
considering how investment assistance should be distributed, should
give serious consideration to building on the experience we have
gained.
16. We ourselves are a partnership of local
authority, development agency, EU and the private sector, and
we urge that consideration should be given to creating further
Regeneration Funds which would benefit from a central administration
geared to servicing decision makers based in their own localities.
*
1 Not printed. Back
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