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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.
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. Funding has been awarded to 90+ projects. Details of the projects being supported are available on the Phoenix Fund Development Fund Successful List. All of these projects will be completed by March 2004.
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 the PDF & Social Enterprise page.
Additional funding was allocated to the Development Fund for 2004-6 following the 2002 Comprehensive Spending Review. The funding will be used to:
Apart from 'Building on the Best', activity is currently at the research and planning stage. Further information will be provided here as plans develop.
For further information about the Fund, please contact:
Maria Kenyon
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 SME's, 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 visit Bridges Community Ventures Ltd website. (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 local Business Link, accountant or specialist bank adviser.
Policy and related enquiries should be made to:
Robert BrennanThe initiative is being run by the National 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 the NFEA website or by contacting your local Business 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 the first round and second round projects 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.
A Participation Plan has 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:
Mark Hambly© Crown Copyright 2001 - 2004 | This phoenix fund page managed by Martin Smith | Last updated: 29-Dec-2003
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