Co-op Bank joins plea to think small on funding

THE Co-operative Bank and accountancy firm Grant Thornton have written to business secretary Vince Cable, urging him to divert some funds from the forthcoming Green Investment Bank (GIB) towards small community renewables projects.

The two companies are concerned that smaller projects - which they claim have the potential to create 6,500 UK jobs - will lose out amid speculation that the Department for Business, Innovation and Skills (BIS) will next week announce that the bank will initially concentrate on backing large nuclear and offshore wind projects.

According to a report sent to Cable today, the GIB could make several "early economic gains" by channelling 200 million of its 3 billion budget towards small projects while large schemes are likely to be held up in planning and development.

The Co-op Bank and Grant Thornton argue that returns on initiatives between 250 kilowatts and 5 megawatts in size are almost immediate compared to "complex" nuclear and offshore wind projects, which could take several years to come to fruition.

By using less than 7 per cent of the GIB's initial budget to fund local wind, solar, hydro, anaerobic digestion and biomass projects, the report suggests the investment would result in 273.5m of economic activity a year, 6,512 jobs and 56m of additional tax revenue. Scotland would be a particular beneficiary of many of these jobs, according to a spokesman for the Co-op Bank.

Up to 200m of investment in community schemes would also lead to the generation of 2,940 gigawatt hours of renewable power a year, the research says.

Neville Richardson, chief executive of Co-operative Financial Services, said: "We're concerned that an opportunity to create jobs and boost economies at a local level will be missed if GIB focuses solely on financing large-scale projects such as offshore wind and nuclear.

"There is a significant number of projects that can generate returns for the taxpayer even before these larger schemes begin."

Business groups and Scottish politicians are lobbying for the GIB to be set up in Scotland.