UK Steel Enterprise (UKSE), a wholly owned subsidiary of Tata Steel, has been working since 1975 to improve the economies of areas in England, Scotland and Wales that have been most affected by changes in the steel industry. In over 35 years, it has invested more than £78 million and supported more than 4,800 businesses that are estimated to have created over 70,000 new jobs. Additionally it has provided over £8 million in supporting community projects.
“Our objective is to create new job opportunities in the steel areas of the UK,” says Stuart Green, managing director, UKSE. “We assist in regeneration of the areas by providing finance and workspace to growth businesses and supporting the wider community in its endeavours to regenerate itself.”
The organisation began with a funding of £50 million from British Steel Corporation and Europe but is now self-sufficient. Income is generated from a loan and investment portfolio, as well as rents received from small business tenants using its innovation and business centres; the money is reinvested in new and growing enterprises as well as community projects.
UKSE has offices in four regions — Scotland, North England, Yorkshire Humberside and the Midlands, and Wales — and operates in 14 areas within these regions. A small tight-knit organisation with just 27 people, UKSE follows a three-pronged approach when selecting applications for funding: the business must be small or medium sized and be able to add significantly to job opportunities in steel areas; it must have a sound business plan; it must be based in or moving into any of the 14 areas that UKSE works in. The organisation offers different options for financing businesses — loans (secured, unsecured and EFG — Enterprise Finance Guarantee) and investment through share capital.
Says Keith Williams, regional manager, UKSE, “In terms of business support, we look primarily at investing in good quality management teams rather than a company that has great products but a poor management team, because the former is more likely to survive and prosper.” Some of the companies in which UKSE has equity investments are Macalloy (tension rod systems [see box]), Hardmetal Products (carbide tungsten cutting tips), ACM Bearings (composite bearings) and Bolton Surgical (medical instruments).
The success stories of the organisations supported by UKSE are many and varied — a heating and plumbing company in Redcar that is now expanding into the renewable energy market; Glasgow-based Safehinge which has developed an award-winning, child-safe door hinge system; EnPlus Solutions, a supplies company in Tees Valley in North England that provides recyclable and compostable products.
“Our primary aim is to reach out to businesses and individuals who are affected by the changes in the steel industry, helping them set up new businesses or grow existing businesses so that new jobs continue to be created,” says Mr Green.
UKSE also provides support to local community initiatives and enterprises with small loan and grant schemes. A case in point is the Kickstart Fund set up in 2009 in Rotherham, Black Country, Sheffield (Stocksbridge) and Scunthorpe to help new and fledgling micro businesses. Over 480 businesses have been assisted in these areas. These business-focused initiatives are enhanced with charitable support provided to local community programmes such as young entrepreneur initiatives, organisations dealing with drug or alcohol abuse, and projects for youngsters with learning difficulties.
A current example of its targeted assistance is the approach taken to mitigate the impact of 1,200 job losses anticipated in Tata Steel’s plant in Scunthorpe. UKSE is working with Tata Steel in discussions with local authority councillors and MPs on how best to help the affected workers and their families, and UKSE sits on the Government’s Economic Response Task Force. The support that UKSE has already announced includes setting up a new UKSE Kickstart Fund that will provide grants and small loans for micro businesses and the provision of low-cost loans (£25,000) for companies that will create jobs, as well as additional commitment from their community support fund for local regeneration projects.