Issue details

21/00001 Kent and Medway Business Fund Extension

– Kent County Council is seeking to extend the Kent and Medway Business Fund (KMBF) which is currently due to end on the 31 March 2021, for a further 2 years, until the 31 March 2023. The extended KMBF scheme will offer investments in the form of grants, loans, and equity, financed from recycled equity and loan repayments received from recipients of both the KMBF and the former Regional Growth Fund (RGF) schemes - Expansion East Kent (ExEK), Tiger and Escalate programmes. Investment in the extended KMBF scheme will be subject to the same decision-making structures, procedures, and safeguards that operate under the existing KMBF scheme.


Reason for the decision


KMBF and the former RGF schemes are administered by KCC via two contracts with the Department for Business, Energy & Industrial Strategy (BEIS). An East Kent contract (original contract end date 31 March 2021) and a West Kent, North Kent, Medway & Thurrock contract (original contract end date 31 March 2023).


BEIS have now unilaterally extended the East Kent contract until 31 March 2023 to bring its end date in line with the West Kent, North Kent, Medway & Thurrock contract.


When the Key Decision for the Kent and Medway Business Fund (KMBF) was agreed in 2016 (Decision 16/00107), the decision was made to seek approval to spend until the end date of the then East Kent contract – 31 March 2020. Now that the East Kent contract has been extended, KCC are seeking to extend the KMBF scheme until 31 March 2023.



BEIS allocated £55 million from the Government’s Regional Growth Fund to KCC between 2011 and 2014. This funded three RGF schemes covering the whole of Kent and Medway and additional local authority areas:


        East Kent (Expansion East Kent - £35 million).

        North Kent, Medway, and Thurrock (Tiger - £14.5 million).

        West Kent (Escalate - £5.5 million).


These schemes operated from November 2011 to January 2016. For most businesses, loan finance was provided at 0% interest, with a repayment period of between 5 and 7 years.


Since January 2017, KCC has used the recycled RGF loan repayments to enable the Kent and Medway Business Fund (KMBF) to provide loans and equity investments ranging between £50,000-£500,000 to eligible businesses across Kent and Medway. Most funding recipients receive 0% interest loans, with a repayment period of up to 5 years. The recycled RGF loan repayments are also used to finance the Kent Life Sciences (KLS) Fund, a sub-programme of the KMBF scheme. This provides equity investments predominantly in the life science sector. Since 2017, KMBF has made the following investments:



No. of Investments

Value of Investments

KMBF Loans



KMBF Equity (Kent Life Sciences Fund)







KMBF Jobs Created FTEs


KMBF Jobs Protected FTEs


* FTE=Full-Time Equivalents


KCC are seeking to operate the extended KMBF scheme in a similar way, offering grants, loans, and equity.


Options (other options considered but discarded)


KCC could seek to appoint an external third-party to manage the grant and loans (an on-going external equity management arrangement already exists). This option has not been pursued due: a) the value of the contact would require a lengthy procurement exercise; b) this contract would only initially last for a maximum of two years i.e., March 2023; c) it is unclear if these arrangements would offer savings or improved  investment performance.


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 deliver 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: Recommendations Approved

Division affected: (All Division);

Notice of proposed decision first published: 04/01/2021

Decision due: Not before 2nd Feb 2021 by Cabinet Member for Economic Development
Reason: to enable the proposed decision to be on the FED for 28 days

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) 03000 417161.

Consultation process

After discussions with the KCC Engagement and Consultation Development Officer it was agreed that public consultation would not be required.

Financial implications: The Capital costs will be sourced from current and future recycled loan and equity investments from the KMBF and former RGF schemes. These are estimated at £24,662,159 - this consists of: a) current uncommitted recycled loan repayments (£15,181,300); b) estimated value of future recycled RGF loans repayments up to March 2023 (£9,480,859). The Revenue costs of this activity will be funded from: a) a management charge of 5% levied against payments to funding recipients; b) an administrative charge of 5% levied on all companies receiving loans. The annual cost to KCC of administering the KMBF scheme (inc. staff, legal, appraisal and monitoring costs) is £450,000 per annum. The KMBF scheme has allocated £6 million towards loans for 2020-21. A similar allocation of KMBF funds is anticipated for 2021-22 but will be formally agreed based on a review of the economic and business situation in 2021. KCC is responsible for the recovery of outstanding investments, if these funds can

Legal implications: KCC will continue to act as the managing authority for the existing two BEIS contracts. KCC will also continue to be responsible for developing and marketing the funding schemes. KCC will undertake eligibility and due diligence checks on all applications before being examined by an Investment Advisory Board (IAB). Most of the members of the IAB come from the private sector, including Finance and Banking, Manufacturing, and the Scientific and Creative Industries. Once an application has been reviewed by the IAB, it makes a recommendation to KCC to Approve or Reject the project and what conditions should be set if funding is approved. Invicta Law Ltd will continue to provide advice on contracts, insolvency issues and works with the KCC Business Investment Team to recover the maximum amount of loan value. KCC Internal Audit will oversee the investment procedures and processes and advice on other matters related to the use of the funds. To minimise riskfor loans, KCC will require applicant

Equalities implications: An EqIA has been prepared for the KMBF.


Agenda items