The Phoenix Fund is designed to encourage entrepreneurship in disadvantaged areas. A shortage of jobs, local services and enterprise are common features amongst the socially excluded. Encouraging entrepreneurship will help create jobs and stimulate activities in communities where crime and unemployment are high. This helps meet the basic needs of local people by providing services like shops. It also helps to develop self-confidence and determination in local people and communities which are the real drivers of regeneration in the long run.
Due to a lack of support, advice and access to finance, entrepreneurs in disadvantaged areas experience even greater difficulties in launching their ideas than somebody starting a new enterprise generally faces. The Phoenix Fund will help these new businesses by providing assistance to business support providers and finance to Community Development Finance Institutions.
The Phoenix Fund was created to address certain of the recommendations set out in the Policy Action Team report Enterprise and Social Exclusion which was published by H M Treasury in November 1999.
ADevelopment Fundto promote innovate ways of supporting enterprise in deprived areas.(England only)
A pilot network ofvolunteer mentorsto pre and early start-up businesses, through the Business Volunteer Mentoring Association.(England only)
Capital, revenue and loan guarantee support forCommunity Development Finance Institutions(CDFIs).
ACommunity Development Venture Fund(CDVF) to create a venture capital fund for SMEs in disadvantaged communities. (Parts of England only).
City Growthis designed to encourage towns and cities to develop and implement strategies which put enterprise and business at the heart of regeneration, focusing on the competitive economic advantages of inner city areas rather than the social disadvantages. The seven pilot areas (StHelens, Nottingham, Plymouth and four areas of London) have developed their strategies and are currently in theimplementation phase. The second phase of city growth continued inApril 2004. The Phoenix Fund is supporting eight of the ten new areas, which include Liverpool, Manchester, Leeds, Derby, Leicester, Luton, Portsmouth and Park Royal Wembley in London.A further two london areas,Deptford New Cross and Heart of South Londonare being funded by the London Development Agency. PricewaterhouseCoopers have been appointed to support the SBS in order to project manage this second phase and to further develop a UK model for City Growth. Further information is available on this website or from Diane Robertson, SBS Social Inclusion Unit, e-mail:diane..gov.uk
The Development Fund for Rural Renewal (England only). Projects finished 31/03/2004 and the evaluation report is due July 2004.
The devolved administrations in Scotland, Wales and Northern Ireland are responsible for business support in their own areas and have made their own arrangements for spending their allocations of Phoenix Fund money.
The PDF is designed to encourage innovative ideas to promote and support enterprise in disadvantaged areas and in groups currently under-represented in terms of business ownership. Its purpose is to encourage experimentation, the evaluation of new ideas and the identification and spread of best practice in an area where there is currently too little knowledge. In 2000/2001, fundingwas awarded to 90+ projects, all of which ended in March 2004.Details of all of these projects can be found inLeading Lights – experiences from the phoenix development fund.
Additional funding was allocated to the Development Fund for 2004-6 following the 2002 Comprehensive Spending Review. The fundingis being used to:
Enable the originalPDF projects to build on the best of what they have achieved so far. Two competitive bidding rounds have been held with 26 projects being funded. Follow the link to viewdetails of the successful bidders. The projects receiving Building on the Best funding will continue until March 2006. (Please note this funding is now closed)
identify gaps in provision in previous bidding rounds, in terms of:
communities of interest, for example serving and ex-offenders, people with mental healthconditions and refugees;
sectoral interests, for example the retail sector and the caring industry;
geographic communities, for example areas of industrial decline or restructuring; isolated coastal hinterlands. Six development projects run byHousing Associationsare focusing onEnterprise Areas;
Self-employment and enterprise for people with mental health conditions. We are currently inviting organisations to apply for funding to run enterprise-related projects. For some people with mental health issues, an alternative to trying to compete directly in the job market is to look for oppurtunities to become self-employed.The bidding guidanceexplains a new intiative, to explore innovative ways of encouraging and supporting people with mentalhealth conditions who wish to become self-employed, to start a small business or a social enterprise. For a hard copy of the bidding guidance call Robert Lawson on 0114 2794462. The closing date for applications is 5.00pm Friday 10th September.
build capacity to deliver business support within intermediary organisations, including through Phoenix Bursaries. Further details of the bursaries are available from
pursue work with Business Link Operators and Regional Development Agencies and others to mainstream business support.
The Small Business Service is, through the PDF, supporting a number of programmes that focus on assisting social enterprises, over and above the 17 social enterprise projects supported through the 2 competitive bidding rounds. Details of these programmes are available on thePDF & Social Enterprise page.
Further information about the future PDF work will be provided here as plans develop.
For further information about the Fund, please contact:
The CDVF was launched on 14 May 2002 and is a 40 million equity and near equity venture capital fund. The Government is investing up to 20 million on a pound for pound basis with private sector investors.
The Fund aims to stimulate the provision (and benefits) of venture capital to viable SMEs, which are capable of substantial growth, and that are located in the 25% most deprived wards in England as classified under the Index of Multiple Deprivation (IMD) ranking.
In addition to demonstrating the need for, and returns on, venture capital investments, business plans must also demonstrate the benefits to the local communities (25% most deprived wards) in terms of either employment, sourcing or supply of goods and services.
Bridges Community Ventures Ltd, the appointed Fund Manager, will manage the Fund on a commercial basis. It is responsible for identifying and developing potential investment opportunities, raising the finance, making the investment deal decisions and liaising with regional and local partners.
Investment deal sizes may be up to 500,000 euros with a possible 250,000 follow-on. In those 25% most deprived wards also covered by EC Assisted Areas 87 (a) and (c), the deal sizes may be up to 500,000 with a 250,000 follow-on. Co-investments and staged deals are also possible. Should other publicly funded grant schemes, such as Regional Selective Assistance, also be involved in the same investment deal (project), then such grant in aid may only be allowed at 50% of the normal rate.
Businesses with ambitious plans, which wish to find out if this Fund is right for them, should visitBridges Community Ventures Ltdwebsite. (Regional Development Agencies and Local Authorities can also advise on deprived ward and EC Assisted Area status).
If you are unsure about the appropriateness of venture capital for your business or how to best present your business plan to a venture capital fund manager, help should be sought from your localBusiness Link, accountant or specialist bank adviser.
Policy and related enquiries should be made to:
The initiative is being run by theNational Federation of Enterprise Agencies(NFEA) for delivery through local enterprise agencies and other local partnerships. It is based on a core of volunteers drawn from all sections of the business community, who provide mentoring advice aimed at pre and early start-up businesses, including those in disadvantaged areas and ethnic and minority groups.
More information on the initiative can be found on theNFEA websiteor by contacting your localBusiness Link.
Through two previous rounds of Phoenix Fund support almost 20m of revenue, capital and loan guarantee support has been made available to over 40 CDFIs. Separate details of thefirst roundandsecond roundprojects are available. This has enabled those organisations to further develop their core activities of providing finance and associated business support to enterprises from disadvantaged communities that are unable to access part or all of the finance they require from conventional sources but nevertheless have viable business propositions which, if supported, are likely to have a positive impact on the community in which they are based.
Further support for the work of the CDFI sector was identified as one of the two priority areas for future activity through to 2006 when additional Phoenix Fund resources were announced as part of the 2002 Spending Review settlement.
AParticipation Planhas now been published setting out in detail the five specific types of CDFI activity for which support will be available. Information on regional priorities for CDFI development presented by the Regional Development Agencies (RDAs) is also included.
If you have any other questions not adequately answered by the Participation Plan please contact:
Office of the Deputy Prime Minister Regeneration
Office of the Deputy Prime Minister Regional Development Agencies
Office of the Deputy Prime Minister Single Regeneration Budget
Office of the Deputy Prime Minister Single Regeneration Budget Challenge Fund
Office of the Deputy Prime Minister Coalfields Task Force
Department for Education and Skills European Social Fund
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