Manchester is one of over twenty cities which has made an official bid to host the Green Investment Bank (GIB) which will be government-funded to the tune of £3 billion. The bank is expected to funnel £15 billion of private finance into green projects over four years and employ up to 70 members of staff. Its main areas of work will be offshore wind, energy from waste, waste processing/recycling, non-domestic energy efficiency and supporting the Green Deal. The final decision on which city gets the bank will be made by Vince Cable, aided by an advisory panel, this February and the bank will be launched April 2012.
MCFly: Why do you want the Green Investment Bank to come to Manchester and what do you think will be the major benefits for the city?
Ashcroft: We see the Green Investment Bank as a key part of the low carbon agenda and we really want to be a success. We believe that the best to ensure that success is here in Manchester.
I think from a Manchester perspective we see three levels of benefits. Firstly, there is the installation cost of having the bank here which will bring in revenue in terms of rents rates and services – so there is a direct benefit in that respect. It will also bring 52,000 [UPDATE: should read “50 to 70” – transcription error on MCFly’s part] new jobs into Manchester which would be quite key and will mean new high profile jobs in the city. Thirdly, is the spin-off from 3 billion investment programme which could well spiral into 200 or 400 billion. So there are enormous benefits to the city and we also believe that we are the best place to guarantee its success.
MCFly: The government set out three criteria that each city or area making a bid had to fulfill. These are 1) the ability to recruit and retain staff with the necessary specialist expertise 2) presence of a specialist businesses ecosystem and 3) cost effectiveness. Do you feel Manchester meets these criteria?
Ashcroft: Manchester is well-placed both nationally as and regionally as well as internationally due to Manchester Airport to be able to make the most of the Green Investment Bank. In terms of the strength of the financial sector, we’ve got the strongest financial services sector outside of London, we have enormous private equity groups so in terms of the local ecosystem to support the Green Investment Bank, Manchester does very well. Another strength is that Manchester has quite a compact economy.
MCFly: London is clearly quite a serious contender due to the fact that it is already a strong financial hub. Can Manchester compete with the capital city?
Ashcroft: Based on the three criteria, I think Manchester can compete very well against London. And in terms of economics, Manchester offers a very compact economic solution which takes London out of the equation. But let’s face it, there are 22 cities and places which are competing for the Green Investment Bank so it’s a hot topic and there is a lot of interest from all types of places. You have interest from place like Scotland, Wales, Cardiff and Peterborough but nevertheless we feel that on all the criteria, Manchester comes on top in pretty much all of them.
MCFly: I understand that Manchester is offering low rates of rent to show the cost effectiveness of hosting the bank in the city. Is Manchester doing anything else to make sure its bid is successful?
Ashcroft: Technically, we didn’t lower the rents. There were some misquotes relating to how much it would cost to bring the Green Investment Bank to Manchester and so we want to say that you could bring in big banking projects and investment into the heart in Manchester, into Spinningfields which could be the equivalent of London’s Canary Wharf let’s say, and you could do that for less than £20 per square foot. It’s not that we are giving cut price deals, we are just offering attractive market rates which demonstrate how well Manchester competes with any other city in the UK.
Ashcroft: There was no issue with regards to our website. I mean, we had a website under development through December and our final site was launched successfully. There was no issue as far as we were concerned- it was a blip, a fleeting moment which nobody saw apart from one journalist. It was a drop for 30 seconds and it was supposed to have lorem ipsom and latin text up there. If you look at the website now, it shows what we’ve been doing and the enormous commitment from key players from Manchester. All the big players have pulled together to support this bid and have committed to video content which is great. We are very proud of our website and the finished product.
MCFly: The Green Investment Bank won’t have full borrowing powers until 2016 at the earliest. Friends of the Earth have said that in order to avoid being a lame duck bank, GIB must be able to undertake independent borrowing from capital markets. Will this be a problem if the bank comes to Manchester?
Ashcroft: There are many ways that the fund can be amplified whether its through leverage borrowing or join venturing with partners. There are lots of ways that the issue of borrowing can be dealt with.
MCFly: The decision on which city will be chosen to host the Green Investment Bank is due in February 2012. What will happen between now and when the decision is made?
Ashcroft: We’re currently working with our parlimentary group of MP’s to make sure that they are fully briefed and we are going to be deciding with them over the coming week what the programme will be that we taking to the House of Commons.
The key date is the 30th of January as documents have to be submitted by then and all our attention is focused on getting the final document together. In fact, we had a meeting just today to look at that and that document has to be submitted by 5pm on the 30th. After that, the the decision will take place pretty quickly we think and we expect a decision in February some time.
MCFly: As you mentioned before, there is a lot of competition to host the Green Investment Bank. What happens if Manchester isn’t chosen? Will the city still be able to take advantage of the opportunities it provides?
Ashcroft: We want the Green Investment Bank to be a success and we believe that the best place for it to succeed is in Manchester. We will be demonstrating the strengths of Manchester as a location for inwards investment and indeed for any financial banking proposition. However, the green investment agenda is enormous and the 3 billion kickstarter for the bank is essentially backing up what could be a 400 billion investment programme in terms of energy loans. It’s going to be a key component of the economy and so, yes, there will be benefits for everyone even if it is based in Manchester. There will be spin-offs nationally.
:: Green Bank Manchester.
:: John Ashcroft is the chief executive at pro.manchester which is a professional services group.