Proposed decision –
Kent County Council to allow Thurrock Companies to access loans from the Regional Growth Fund (RGF) funded Kent and Medway Business Fund (KMBF). These loans will be financed from recycled loan repayments previously obtained from Thurrock companies that received funds via the former RGF Tiger programme. These loans shall be subject to the same rules, criteria and administrative charges as loans that are allocated under the existing KMBF to Kent and Medway companies.
Reason for the decision -
Kent County Council (KCC) administers under government contracts (Department for Business, Energy & Industrial Strategy - BEIS) the Regional Growth Fund (RGF) which offers investments to eligible businesses and receives repayment on these investments. Until January 2016 via the former RGF Tiger programme, companies in Thurrock were eligible to receive investment funding.
The Kent and Medway Business Fund (KMBF) was established in 2017 and replaced the former RGF Tiger programme, and the decision was made at that time to restrict access to the KMBF scheme only to Kent and Medway companies (Decision 16/00107) and draw up alternative arrangements for the transfer of funds to the former eligible areas outside Kent and Medway.
Please note, the underlying government contract with BEIS covering North Kent and Medway still includes Thurrock as an eligible area.
In 2019 KCC agreed to transfer the recovered loan repayments obtained from Thurrock companies back to Thurrock Council in line with a similar arrangement agreed with East Sussex County Council (Decision 19/00019). A KCC Key Decision was published to facilitate the Thurrock transfer (Decision 19/00041). The plan was for Thurrock Council to receive and oversee the use of these funds to support local small and medium sized enterprises in their local authority area. It has not proved possible to transfer these funds to Thurrock Council as this local authority does not have in place the required contract with BEIS.
Options (other options considered but discarded):
The preferred KCC option was to transfer the funds to Thurrock Council but this was not legally possible due to the lack of an existing contract with BEIS. The only way remaining to fulfil our current BEIS contract is for KCC to distribute funds directly to Thurrock companies via a small loan programme on behalf of Thurrock Council, covering the costs of the appraisal, decision-making and monitoring from an administrative charge levied on all loans to Thurrock companies (the same charge is currently levied on Kent and Medway companies).
How the proposed decision meets the objectives of ‘Increasing Opportunities, Improving Outcomes: Kent County Council’s Strategic Statement (2015-2020)’:
The decision supports the outcome “All Kent’s communities benefit from economic growth and lower levels of deprivation” as it will allow KCC to maintain its contractual obligations to Thurrock Council and BEIS as part of the delivery of the Kent and Medway Business Fund which is seeking to deliver business investment, create new jobs and safeguard existing jobs in the Kent area.
Decision type: Key
Reason Key: Affects more than two Electoral Divisions;
Decision status: For Determination
Division affected: Dartford East; Dartford North East; Dartford Rural; Dartford West; Faversham; Gravesend East; Gravesham Rural; Northfleet & Gravesend West; Sheppey; Sittingbourne North; Sittingbourne South; Swale East; Swale West; Swanscombe and Greenhithe; Wilmington;
Notice of proposed decision first published: 27/10/2020
Decision due: Not before 25th Nov 2020 by Cabinet Member for Economic Development
Reason: In order that the proposed decision can be published for a minimum of 28 days, in accordance with statutory requirements
Lead member: Cabinet Member for Economic Development
Lead director: David Smith
Department: Growth, Environment & Transport
Contact: Martyn Riley, Economic Development Officer (Expansion East Kent Programme) Tel: 03000 417161.
Has any public consultation been undertaken or is any planned?
After discussions with the KCC Engagement and Consultation Development Officer it was agreed that public consultation would not be required.
Which Divisions / Local Members are particularly affected:
Please note, there is no loss of funds to Kent based companies from this Decision. If the funds sourced from recycled loan repayments from Thurrock companies cannot be re-allocated to Thurrock companies, these funds will be ring-fenced in the KCC accounts and possibly returned uncommitted to BEIS after March 2023. The former Tiger RGF programme covered the Dartford, Gravesham, Swale districts:
Have views been sought from local Members?
We have not sort views from KCC local Members as this time because this Decision does lead to the transfer of funds away from Kent companies. However, should they be required we confirm that they will be sought and included in any report to Cabinet Committee / Cabinet Member and the record of decision if requested by the Local Members.
Financial implications: The Capital costs are the potential value of the recycled RGF loans repayments from Thurrock companies, currently KCC has recovered £212,456 in RGF loan repayments. A further £100,290 may be recovered from another Thurrock company in administration. The Revenue costs of this activity will be funded from an administrative charge levied on all Thurrock companies receiving loans. KCC Budget Book, the capital entry for the KMBF, row ref 26.
Legal implications: KCC has discussed with BEIS various options. We have an existing BEIS contract which still lists Thurrock as an eligible area. Therefore, Thurrock companies are still technically able to receive recycled RGF Funds but the current Key Decision (Decision 16/00107) for the KMBF programme does not have the provision to allow access for Thurrock companies. BEIS has confirmed that funds cannot be transferred directly to Thurrock Council as Thurrock does not have an existing contract in place with BEIS. If KCC does not facilitate access to the existing KMBF programme these funds will not be committed and may be returned to BEIS at the end of the current contract after March 2023. The loans will be awarded using the same decision-making structures, procedures, and safeguards as the current KMBF loans. Contracts will be signed using the same format as those for Kent and Medway companies and debt recovery will operate in the same way.
Equalities implications: An EqIA was prepared for the KMBF in 2017. A revised version is being prepared.