AT LONG last, the North West’s new venture capital and business loan funds are up and running, with fund managers appointed and terms of reference agreed.

Reading between the lines, the six new funds have been set more commercially-focused performance targets than those set a decade ago for its forerunner, Merseyside Special Investment Fund (MSIF).

Despite the fact that the new fund managers have been asked to invest a total of £185m of public money over the next five years, the North West Fund, as it is now called, has not been set any overtly social goals. MSIF, in contrast, was part of the EU-funded Objective 1 regeneration programme which had the ambition of creating new enterprises and wealth in deprived areas.

This often involved investing in business propositions that would not on their own have attracted support from the usual private sector sources. As a result, MSIF suffered a high level of write-offs arising from investments that went wrong and the financial returns on its venture funds looked weak. Indeed, some have incurred losses of -95%.

It is hoped the new funds will make a positive return, say around 10%, and that those returns can then be re-invested in fresh legacy funds at some point in the future.

The job of setting parameters for publicly funded business investment funds is a fuzzy one, particularly if social goals don’t form a part of the plan. It is reasonable to ask why public money is being used to make commercial returns from private enterprise at all. If there are commercial returns to be made, then surely private venture funds will queue up to do so.

Except, in the current tight lending conditions, that is not happening. The NWF may have been long delayed by bureaucratic haggling, but its timing could hardly be better. The new cash should help loosen the banks’ tightly-held purse strings. It may help the region’s business recover from the recent recession.

THE new Office for Budget Responsibility may have issued revised government estimates for economic growth, but most of us knew that the original estimates were hopelessly optimistic from the moment Alistair Darling uttered them during his Budget speeches.

We, the British public, is being softened up for the great public spending onslaught that is to come.

I suspect that the doom-laden predictions that are currently emerging from Whitehall are over the top and won’t actually be matched by the reality, when it is unveiled by the new Chancellor next week. There is a chance that once the details have sunk in, most people will react with the thought that things weren’t quite as bad as feared. In which case, the spin doctors will go home happy in the knowledge that they have done their job.

Psychological tactics aside, there will be deep cuts.

Many public sector workers will, over the next 24 months, lose their jobs.

Yet, during the General Election, there was cross-party consensus that the cuts were necessary.

The person who may have the hardest job next Tuesday is Mr Darling, when he stands up in the Commons to deliver his Budget response. What can he say?

Surely he can’t oppose something that he was advocating himself just a few months ago?

Yes, Labour wanted to delay cutting public spending until next year, but “you should do this next year” hardly makes for the greatest polemic.