A LOCAL authority is poised to invest in dozens of fledgling businesses by setting up a £20m investment programme.
Durham County Council will invest taxpayers’ money in up to 70 businesses either starting up or relocating to the county.
The authority hopes the support for businesses will both create thousands of jobs and produce a return going back into the pot for future investments.
Finance Durham LP Fund will invest between £10,000 and £700,000 in each firm and aims to support up to 70 companies over the next ten years.
Although other UK councils have set up similar investment arms, it is thought to be the first of its kind in the North East and follows a deal done with Atom Bank two years ago, in which the council took 150,000 shares in exchange for a rent-free deal on the digital bank’s Durham headquarters.
Equity investment company Maven Capital Partners will manage the stand-alone fund, which is expected to begin operating within the next few months.
They say they will work closely with companies to improve performance, but will not interfere in the day-to-day running of businesses.
Councillor Simon Henig, leader of Durham County Council, said: “We’re seeing more and more firms locate, start up and grow here in County Durham.
“This £20m to support those businesses as they scale up, create jobs and add economic prosperity to the county, will be a major boost and testament to our commitment to help County Durham’s economy grow.
“They will be investments to yield a return, so we expect to see the £20m grow to help even more businesses in the future.
“It’s very pioneering for a local authority to do this and we’re very proud to be able to offer support in such an innovative and direct way.”
Managing director Simon Goon, managing director of economic development company Business Durham, said access to finance had historically been an issue for businesses in the region.
He added: “I honestly think that in five years’ time we will look back and see this as a transformative time for Durham. No other local authority is doing this to the extent that we’re doing.”
Most investments will range from £200,000 to £700,000, with ten per cent of the fund set aside for smaller investments, of between £10,000 and £40,000.