Capability and Innovation fund | Deloitte UK has been saved
New £100 million grant programme available to encourage innovation in the business banking SME and FinTech market
The Capability and Innovation Fund (CIF) – established by the UK government after the 2008 financial crisis – was created to encourage competition in the SME banking industry. The fund is comprised a total of £425 million which was divided into four pools designed to address a specific issue within the UK business banking sector. The Banking Competition Remedies (BCR) was then established to assess applications and distribute the grant funds.
However, recently, a £100 million grant pot was launched, as some existing beneficiaries have not utilised the funding. BCR announced that the available funds would be split (£80m/£20m) between financial players that fit into the existing categories of Pools A-C and those who fit into Pool D (more information on the four pools).
Pools A-C: £80 million to support existing business banking players and the expansion of business offerings to include lending or payments services to SMEs in the UK or international payment services to SMEs in the UK. Funding is currently envisaged to be awarded from £5m, increasing in £5m increments to £20m.
Pool D: £20 million to facilitate the commercialisation of financial technology that is relevant to SMEs and FinTechs alike. This is likely to be of interest to a wide range of applicants, including those who develop technology that banks use. Awards are envisaged to be made in the range of £2.5 to £5 million.
The consultation process started on 28 April 2020 and ran until 12 May 2020 to solicit views on the scale of awards to be made within the overall scheme parameters. We anticipate the timetable for applications, appraisal and award notification will announced by the end of May.
Further background and context to the competition
European Commission state aid approval to The Royal Bank of Scotland Group plc (“RBS”) was granted to implement a restructuring plan to divest part of RBS’s branch based retail and small and medium sized enterprise (“SME”) business.
The Banking Competition Remedies Limited (BCR) was then established to implement the Alternative Remedies Package of measures agreed between the UK Government and the European Commission. BCR is independent from RBS and the UK Government and is governed by an independent Board of Directors.
For further information on the scheme or how Deloitte can help with grant applications, please do contact the team.
Alistair Davies
Director
Alistair leads our Location Strategy and Grant & Incentives division in the UK. He has spent time seconded to Government where he was responsible for the negotiation and detailed financial appraisal of a wide range of grant applications. Alistair has more than 25 years’ experience advising clients to make the most of available grants and incentives. He has previously acted as Chairman of a property development grant fund and in a Princes Trust mentor. Alistair has experience supporting projects incorporating manufacturing, R&D, business support services and distribution.
Mark McQueen
Partner
Mark is Deloitte’s Global Head of Insurance Audit and has over 20 years’ experience of working with insurers, asset managers and intermediaries. He works with a range of multi-national, FTSE and national insurers and mutuals providing a mix of both audit and advisory services. He leads the UK firm’s IFRS 17 (IFRS 4 Phase 2) proposition. He met regularly with both the Prudential Regulation Authority and the Financial Conduct Authority and has been actively involved in briefing and training boards on regulatory requirements, including Solvency II, and working with clients to respond to risk mitigation issues highlighted through regulatory visits. From 2004 until 2010 he led our Regional Financial Services Audit and Advisory Practice from the South West and Wales and from 2010 until May 2016 led our UK Insurance Audit and Advisory Practice.
