A £20 million investment fund to grow local businesses that aims to create thousands of jobs for County Durham will go before Cabinet next week (15 June).
If approved, the scheme will see Durham County Council create Finance Durham, a standalone investment fund, which will make financial investments in local businesses based in the county.
Although designed as an ongoing scheme, Cabinet will hear that the modelling of the fund predicts the creation or safeguarding of 2,000 jobs, support for 500 businesses and direct investment in up to 70, all within the first 10 years. As well as supporting companies already based in the county it is hoped that the fund will make County Durham an even better prospect for businesses looking to relocate, further boosting the economy through the creation of more jobs.
The scheme will make similar investments to those of a traditional venture capital fund meaning that not only will companies benefit from the support but, by targeting businesses with potential for high growth, Finance Durham is estimated to make a return of around £6 million in its first 10 years. The council will have the option to realise these profits or keep them within a growing fund to invest in even more businesses. This will be in addition to a dividend of over £500,000 for the council over the first 10 years.
Although local authorities creating their own investment vehicle is an approach already used by some councils in the country, the fund will be the first of its type in the north east. The proposal of Finance Durham comes on the back of the council already taking direct action to support business and create jobs such as the recent investments in both Atom bank in Durham City and NETPark based Polyphotonix.
Cllr Neil Foster, Cabinet member for economic regeneration, said: “Finance Durham will allow the council to take direct action to improve the economic prospects of our county and create potentially thousands of much needed jobs.
“Not only will we be backing our county’s businesses but with the fund on offer we hope to see even more companies relocating to County Durham.”
If approved by Cabinet it is hoped that Finance Durham will launch in 2017. Cabinet will meet at 10am on Wednesday, 15 June at the council offices in Crook.