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Economy Funding business

Will Peakin Business Correspondent

New business centres and wireless technology zones are set to proliferate

In financially straitened times, new sources

of funds are scarce so it should come as no surprise that local authorities across Scotland are busy preparing bids for a joint European Union and Scottish Government grant. COSLA’s environment and regeneration team has been highlighting the SNP’s manifesto commitment to use the £50m fund as a way of kick-starting town centre and urban renewal schemes that were put on hold during the recession. Te so-called Jessica (Joint European

Support for Sustainable Investment in City Areas) Fund allows EU grant funding to be invested in a regeneration delivery partnership known as an urban development fund. Te initiative was developed by the European Commission and the European Investment Bank, in collaboration with the Council of Europe Development Bank (CEB). Te main difference is that Europe’s financial support for its regions has previously been restricted to the provision of grants towards individual projects, but it can now be committed to a fund. In addition, the fund can be managed on a commercial basis with the aim of generating returns to all investors, including the original funders thus allowing money to be recycled into further projects in the future. As well as Scotland, Jessica funds have also

been established in London, the north-west, Wales and the east Midlands. Substantial areas of Scotland’s towns and cities will benefit from major regeneration work including new business spaces, wireless technology zones, green energy for social housing, the renewal of derelict sites and more efficient transport schemes. Te funds are part of a push by Europe to encourage the use of financial levers – essentially equity, guarantees and subordinated loans – to support investment in urban areas as a way of improving social cohesion in communities. It is hoped the private sector institutions will increase the value of the funds and investment in

communities. Behind the scenes, work has been progressing

on how the fund would operate in Scotland, with local authorities, urban regeneration companies, Government directorates and the enterprise agencies among the anticipated managers of projects. Ministers agreed the fund, comprising roughly equal contributions from the European Commission and the Scottish Government, last year.

“Regeneration is critical to boosting our economy and safeguarding jobs”

At the time, the then Housing and

Communities Minister Alex Neil said: “Regeneration is critical to boosting our economy and safeguarding jobs. Tis new flexible £50m fund will help kick start a whole range of fantastic regeneration projects that will revitalise communities most in need and support economic recovery. Importantly, by ensuring we recycle the cash investment, through an ‘invest now, repay us later’ model,

we will support many key projects and leave a lasting legacy to fund regeneration in Scotland for many years.” Simon Brooks, European Investment Bank

Vice President responsible for the United Kingdom said: “Te European Investment Bank looks forward to supporting significant regeneration across Scotland’s towns and cities. Tis will support economic recovery, revitalise local communities for the benefit of their inhabitants and attract additional much needed investment.” Johannes Hahn, Commissioner for Regional Policy, European Commission said: “I am delighted that the Jessica Scotland Fund is being launched. Te European Regional Development Fund will grant £24 million to this fund that will boost regeneration and economic development in Scotland’s deprived urban areas. Te Jessica Fund encompasses a sustainable approach to regeneration by establishing an evergreen fund, by creating premises that will support economic growth, by focusing on land redevelopment and by supporting areas of social need. Tis fund can be recycled and re- invested and therefore provides a longer-term contribution to economic development.”

13 June 2011 Holyrood 63

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