Barclays to provide venture funding to depressed UK regions

Barclays Bank is looking to provide tens of millions of pounds in venture funding for some of the UK's most depressed areas.

Barclays Bank, one of the UK’s main financial services groups, has committed to providing venture funding to businesses based in some of the country’s most economically depressed areas. If the bank is successful it will have secured a virtual monopoly in providing public-private venture capital in Britain, reports the Financial Times.

The bank first investigated this opportunity in February 2001, when it established its Urban and Regional Economic Unit, with a reported £200m of investment capital and a mission to help regenerate some of the most disadvantaged parts of the country.

In September the bank committed £66m to nine venture capital funds run by the regional development agencies and the Department of Trade and Industry. Then earlier this month it pledged a further £84m to four funds in what the UK Government has dubbed Objective One areas, which are extremely disadvantaged areas. These are Cornwall, Merseyside, South Yorkshire and West Wales and the valleys.

The funds the bank is now hoping to run are focussed on Objective Two areas, areas deemed less disadvantaged than Objective One. Fund size will range from £15m and £50m and will include public money lent on a commercial basis, primarily as debt with a smaller equity component. Many will again be run by the regional development agencies.