Business Secretary, Vince Cable has launched a consultation into raising finance for private sector investment.

The new paper, entitled ‘Financing a private sector recovery’, looks at a range of issues surrounding access to capital.  In particular, it raises concerns that small businesses are unable to access funds as investors look higher up the economic ladder. 

ACE recommended to the Government in March this year that they explore re-establishing regional stock exchanges. 

The proposal was highlighted several times throughout the consultation.  

The paper seeks views on whether regional stock exchanges could boost investment and help to overcome regional economic disparities.  It also ponders whether there are barriers to listing with exchange-regulated markets that particularly hinder small companies. 

There are a range of other proposals highlighted in the consultation.  

ACE welcomes this paper and the fact that regional stock exchanges are now firmly in the Government’s sights. 

We look forward to engaging with this and helping to find solutions that work.

 ACE welcomes the appointment of Lord Heseltine to chair the £1 billion Regional Growth Fund.

Lord Heseltine will chair a panel to approve funding for private sector projects over the coming two years. Projects will be assessed for the boost they give to sustainable economic growth in areas particularly reliant on public sector employment. Sir Ian Wrigglesworth will be deputy chair.

Business Secretary Vince Cable commented: “I’m delighted that Lord Heseltine and Sir Ian Wrigglesworth have agreed to lead the approval panel for this important initiative. The Regional Growth Fund demonstrates that England is open for business. It will support enterprise and incentivise the growth of private sector-led local economies; mobilizing private sector investment across the country and creating sustainable private sector jobs.”

ACE is pleased to see support for private sector investment in the regions and hopes that the new panel recognises the high level of economic return that comes from infrastructure investment.

ACE welcomes BIS Secretary of State, Vince Cable, call for a balance between cutting the deficit and promoting sustainable economic growth in the years ahead.

The Business Secretary issued a new paper entitled ‘A Strategy for Sustainable Growth’ that sets out the need to secure a sustainable economic future while cutting the budget deficit now.

The report highlights the need to secure the recovery for the long-term by building on the UK’s traditional strengths in science and technology.

The plan emphasizes the need to promote free and open markets, strengthen business and individual innovation and encourage smarter public and private investment in the economy.

Dr Cable commented: “My department, which I have argued should be seen as the ‘department for growth’, has a key role to play in creating the conditions for businesses, the drivers of our economy, to start out, invest, grow and be profitable which is critical for the recovery.” 

Clancy Consulting has announced its acquisition of Scotland based Hodgins Smith Partnership this week.

Clancy, based in Manchester, approached Hodgins Smith Partnership with the aim of growing its business and offering its clients north of the border greater access to locally based staff.

The combined firm will be one of the UK’s strongest medium-sized, and privately owned, engineering consultants working across disciplines.

Clancy Consulting chief executive Alan Bramwell believes that there is excellent synergy in bringing the companies together. He explained that they share several similarities including strong reputations built over many years and a talented and loyal workforce.

Hodgins Smith Partnership was formed 22 years ago by Reg Hodgins and Ron Smith. They were later joined by John Mitchell and Neil Orrock. All four will continue in senior roles with Clancy Consulting. Reg Hodgins becomes a company director with Clancy.

One of the biggest barriers to putting up a building or growing a business is the up-front costs.  In this sense, the financial services sector plays a pivotal role in leveraging the capital required to get started.

Interest rates are at an all-time low, with little sign of an increase any time soon.  Yet some engineering businesses and their clients are still struggling to find loans that are affordable.  Without access to viable sources of credit, it is difficult for businesses to grow and projects to be developed without taking unreasonable levels of financial risk.

Lack of affordable lending also impacts on the housing market.  The inability to gain sensibly-judged, affordable mortgages reduces the incentive to build more homes and increases pressure on the private rental market.

It is clear that the implosion of the sub-prime market has led to a rethink of how financial risks are assessed.  However, reverting to a risk-averse approach to lending is not sustainable in the long term; certainly not if the reports that the UK needs another two million private sector jobs are to be believed.

The Government is intending to publish a green paper in the summer setting out proposals to get the financial system lending again.  Along with the recent proposals to establish a Green Investment Bank, this is to be welcomed as a step forward in the debate.

Yet any proposals that are put forward must be carefully thought out.  Poorly developed regulation could be difficult to implement.  At worst, it might result in more expensive credit – and business will be the worse for it.

Industry will be looking for sensible approaches that encourage responsible business growth and sustainable development.