Issue details

23/00088 - Kent & Medway Business Fund 2023

Proposed decision:

Reopen the Kent & Medway Business Fund (KMBF) in October 2023 and continue to provide loan finance to businesses until March 2032


Approve the KMBF Scheme Governance and decision-making arrangements.


Delegate authority to the Director of Growth and Communities to take relevant actions, including but not limited to entering into contracts or other legal agreements, as necessary to implement this decision. 


Reasons 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.


BEIS (now DBT) arranged for these contracts to be administered by the Department for Levelling Up, Housing and Communities (DLUHC) 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 KMBF.



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-£500,000 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 5 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: 104; Total Loan investment: £13,889,299

         No. of Equity Investments: 9 companies; Total Equity investment: £4,350,000

         KMBF Jobs Created Full Time equivalent (FTE) 449.92

         KMBF Jobs Protected Full Time equivalent (FTE) 138.91


Options (other options considered but discarded):

The Options considered during and following the approval by the DLUHC for KCC to retain the recycled KMBF/RGF investments have been:

         Close down the scheme:  However,

o        KCC’s on-going management cost of the existing investment portfolio would not be covered as there would be no new loan expenditure, therefore recovering KCC management costs would have required special approval from DLUHC.

o        This would not support KCC’s economic drivers to increase growth, productivity, innovation, and job creation/protection.


         Commissioning the scheme out to a 3rd party provider. Not pursued at this stage for the following reasons:

o        It is unclear if doing so would offer up any significant savings (scheme administration), improve investment performance over time, or reduce bad debt; nor ensure complete alignment during any procured contract term to KCC’s priorities.

o        Within the RGF Evaluation and throughout the approval with DLUHC the internal administration of the scheme was highly commended.


The proposed decision supports Framing Kent’s Future – Our Council Strategy 2022 – 2026 as follows:

         Priority 1 – Levelling Up Kent (2, 3, 4, 5, 6 and 7)

         Priority 2 – Infrastructure for Communities (3)

         Priority 3 – Environmental Step Change (7)


Legal Implications: 

The ability for KCC to continue to manage the recycled KMBF/RGF investments and to offer investments via loans in local businesses in Kent & Medway area has been granted until March 2032.  Confirmation of KCC’s approach requires this Key Decision.


Since August 2023 to date, the Business Investment Team have been working alongside colleagues from both the Office of General Counsel (legal expertise) and KCC Finance (debt mitigation) and this work has covered the following:


·      Full review of the suite of legal documentation by external lawyers (Bevan Brittan).

·      Review of the Investment Advisory Board, Sub-Group and Debt Recovery Group’s Terms of Reference.

·      Full and comprehensive review of the entire application process, including debt recovery by finance with specific recommendations to the strengthening of the appraisal process and alongside legal colleagues, security requirements.

·      The updated governance and scheme arrangements for the relaunched scheme will be approved formally as part of this decision.


Data Protection implications:

A Data Protection Impact Assessment screening has been undertaken leading to a full DPIA being submitted on 27 July 2023.

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: 07/09/2023

Decision due: Not before 6th Oct 2023 by Cabinet Member for Economic Development
Reason: To allow the required 28 day notice period under Executive Decision arrangements

Lead member: Cabinet Member for Economic Development

Lead director: Stephanie Holt-Castle

Department: Growth, Environment & Transport

Contact: Susan Berdo, Strategic Programme Manager Email: Tel: 03000 317024.


The proposed decision was considered and endorsed at the Growth, Economic Development and Communities Cabinet Committee on 26 September 2023.


Financial implications: The approximate overall KCC revenue costs of administering the loan scheme are around £670,000 per annum. The overall administration costs are made up of staff costs, legal, due diligence/appraisal, and the ongoing monitoring costs throughout the lifetime of the loan. These will be covered through the administration and management fees. These costs will be reviewed to confirm they represent value for money when compared with alternative options.

Legal implications: See above.

Equalities implications: The Equality Impact Assessment completed in October 2022 has been reviewed, and a further Equality Impact Assessment (Kent & Medway Business Fund 2023) has been completed using data collated via an anonymous and voluntary Equality and Diversity Survey. The updated Equality Impact Assessment (Kent & Medway Business Fund 23023) was submitted for approval on 27 July 2023. An EqIA will be published alongside the ROD and Decision report when the decision is taken.