Government allocates £1bn for new businesses

The government has announced plans to set up a venture capital fund to be worth an estimated £1 billion over the next ten years.

The Department for Business, Innovation and Skills said the money will be targeted at small businesses and start-ups in the technology sector.

Priority will be given to companies with high growth potential and a focus on the digital sciences, life sciences, clean technology, or advanced manufacturing.

“This fund will help build Britain’s future by investing in key sectors,” said Prime Minister Gordon Brown.

“It will provide crucial support for our most promising start-ups and existing small companies when they need it most.”

Lord Mandelson, secretary of state for business, said the fund will create UK jobs and encourage innovation.

“The UK Innovation Investment Fund will be a shot in the arm for the British venture capital industry,” said Mandelson.

“It is also a challenge to UK venture capitalists to follow the government’s lead in backing British entrepreneurs in building exciting new companies, investing in new technologies and creating jobs.”

The Department for Business, Innovation and Skills, with help from the Departments of Health and Energy, will initially invest £150 million alongside private sector investment on an equal basis.