Decision details

Proposed decision

To agree improvements and changes to the Kent & Medway Business Fund (KMBF) on 1 April 2026 with a revised loan offer, terms and eligibility to businesses within Kent & Medway.

Reason for the decision

Kent County Council (KCC) had two contracts with the Department for Business, Energy & Industrial Strategy (BEIS) (now Department of Business and Trade (DBT)), which enabled KCC to offer grants, loans, and equity finance to enable businesses in Kent and Medway to create new jobs and increase business investment. Funding was originally obtained through these contracts from the Government’s Regional Growth Fund (RGF). Both contracts ended on the 31 March 2023.

The Department for Levelling Up, Housing and Communities (DLUHC), now the Ministry of Housing, Communities and Local Government (MHCLG) and at the direct invitation of DLUHC, KCC applied to extend both contracts beyond 31 March 2023 and to retain the recycled KMBF/RGF investments.

On 12 June 2023, formal written approval was received from the Head of Regional Growth Fund, Department of Levelling Up, Housing & Communities, which permits KCC to continue to provide loans to local businesses until March 2032.

A Key Decision is now required to approve the continuation of the Kent & Medway Business Fund, with a revised offer, terms and eligibility criteria.

Background

Since January 2017, KCC has used the recycled KMBF\RGF investments (loan repayments and sale of shares in equity stakes) to enable the KMBF to provide new loans ranging between £26,000-£600,000 to eligible businesses across Kent and Medway in addition to a small number of equity investments managed separately by an external supplier. Most funding recipients receive interest-free loans, with a repayment period of up to five years. The recycled KMBF/RGF investments were also used to finance the Kent Life Sciences (KLS) Fund, a sub-programme of the KMBF programme, which provides equity investments in companies predominantly in the life science sector to support their growth. Since 2017, KMBF has made the following investments:

·         No of Loan Investments: 161; Total Loan investment £17,693,327

·         No of Equity Investments: 9 companies; Total Equity Investment £4,350.000

·         KMBF Jobs created Full Time equivalent (FTE) 623.89

·         KMBF Jobs Protected Full Time equivalent (FTE) 135.62

Options (other options considered but discarded)

Options considered:

·         To close the Fund and return the recycled money to the Ministry of Housing, Communities and Local Government.  This option was dismissed, as the funds are better utilised to support growth, increase productivity and job creation/protection within Kent & Medway.

How the proposed decision supports the Council’s Strategic Statement

The proposed decision supports the following priorities in the Council’s Strategic Statement:

·         4: Use Kent’s buying power to support local jobs and keep investment in the county:

·         5: Support local businesses to attract investment and create job opportunities for people in Kent.

·         6: Protect our countryside and give strong support to Kent’s farmers and rural pursuits and communities,

And the Kent & Medway Economic Framework (KMEF:

-          enable innovative, creative and productive businesses

-          widen opportunities and unlock talent

-          secure resilient infrastructure for planned, sustainable growth

-          place economic opportunity at the centre of community wellbeing and prosperity

-          create diverse, distinctive and vibrant places

As Cabinet Member for Economic Development & Special Projects, I agree to:

1. APPROVE the improvements and changes to the loan offer, terms, and eligibility criteria for the Kent & Medway Business Fund (KMBF), to take effect from 1 April 2026.

2. APPROVE the continued governance and administration arrangements for the KMBF, including the delegation of authority to the Director of Growth & Communities (and Head of Economy where appropriate) to approve individual loan and equity investment decisions in accordance with the Officers’ Scheme of Delegation

3. CONFIRM that the scheme will continue to operate until March 2032 under the approvals granted by DLUHC/MHCLG.