Newspaper article The Journal (Newcastle, England)

Investing in a Vital Industry? They Aren't Pressing the Right Buttons; 'Risk Averse' Government Accused over Growth Fund

Newspaper article The Journal (Newcastle, England)

Investing in a Vital Industry? They Aren't Pressing the Right Buttons; 'Risk Averse' Government Accused over Growth Fund

Article excerpt

Byline: Adrian Pearson

HOPES of bringing more than 500 jobs to the North East were dropped because the Government is "risk averse", a leading North East firm will today warn.

The influential Business Select Committee will today be told Nick Clegg's flagship Regional Growth Fund has not shown enough support for a range of firms.

David Dunn, chief executive of Sunderland Software City, will warn MPs on the committee that the fund has failed to create jobs because it has not invested in the growing digital and computer technology industry. The fund, which reports to the Deputy Prime Minister, would have seen the firm work with five software companies, helping them to expand and create hundreds of jobs. A second round bid requested just over pounds 1m from a fund now worth more than pounds 2.4bn, to be matched alongside pounds 9m of extra cash ready to invest in the region.

Mr Clegg's growth fund has predominantly helped manufacturing firms meet the cost of expanding, purchasing new machinery and creating suitable infrastructure.

The bid by Sunderland Software City included help for firms to purchase computer equipment and high definition storage equipment, along with some office expansion work, but was eventually unsuccessful.

Mr Dunn said: "We would have brought hundreds of jobs, highly skilled jobs, to the region. From a growth fund point of view it was fairly cheap, but it would have done what the Government says it is trying to do, create a knowledge economy of well-paying jobs.

"If we were building a big factory they would get it, but when it comes to new jobs they think it is more risky and they are less keen to back it.

"We work with 1,300 software companies that employ around 9,500 people in the region. It is small in regional terms, but it is a growing business that has huge potential with firms that can become internationally successful very quickly. …

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