More than £700m of regional funding is hanging in the balance as the chancellor’s Autumn Statement deadline for guaranteeing approved grants looms.
European Regional Development Funding from the £250m Midlands Engine Investment Fund, £400m Northern Powerhouse Investment Fund and £50m North West Evergreen Fund 2 are among those still being appraised by government, Estates Gazette has been told by local authorities and local enterprise partnerships.
The Northern Powerhouse and Midlands Engine investment funds are subject to £50m and £90m of European Investment Bank funding respectively.
Chancellor Philip Hammond has set a deadline of 23 November, when he presents his Autumn Statement, for the government to guarantee European structural and investment projects for 2014-2020. Beyond that, it will back ERDF funds which meet a Treasury requirement for providing value for money and supporting domestic strategic priorities.
The funds yet to be signed off include a £50m North West Evergreen Fund 2, a follow-on to the original £60m Evergreen fund, which has provided debt finance to developments including Allied London’s XYZ Building in Manchester and Peel’s MediaCity in Salford and is set to unlock assets with a GDV of nearly £1.4bn by 2021.
Local authorities are calling on government to sign off funding applications before 23 November. Local Government Association chairman Lord Porter said the vast majority of EU regeneration funding was tied up in thousands of proposals yet to receive government approval.
He said: “Between now and 23 November the government needs to pull out all the stops in working with local areas to get the hundreds of projects currently in development and on the cusp of funding agreements over the finishing line.”
Eamonn Boylan, chief executive of Stockport Council, said Greater Manchester had received an indication that £50m for Evergreen 2 funding would be approved but was still waiting. “We believe there is a market failure and a need for this funding, otherwise we would not be proposing a further round,” he said.
CBRE’s Andrew Antoniades, senior director advising on the Evergreen fund, said the need for public funding was even greater following the post-referendum “allergic reaction”, with borrowers who had terms pulled by banks asking for help.
Bruntwood chief executive Chris Oglesby said North West developers were not dependent on funding, but it helped. “It increases the hurdle that we need to de-risk the project by and so it may in certain instances delay or in the extreme stop development that otherwise would happen if it were available,” he said.
A Treasury spokesman said: “We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities.”
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