A North East council is taking a gamble on one of the region’s most anticipated new companies by taking shares in a start-up digital bank in exchange for rent-free offices.
Durham County Council has taken an equity share in Atom Bank, allowing it free use of Northumbria House at Aykley Heads as it prepares for its launch later this year.
As well as giving the council 150,000 shares in the bank, the deal secures the creation of at least 170 jobs in the city, with more hoped for if the bank succeeds.
It is expected Atom will later take on a larger building in the city as it grows.
Announcing the deal, Durham’s cabinet member for economic regeneration, Coun Neil Foster, said: “This is a cutting-edge business and it’s absolutely right that we find an innovative way to ensure that the hundreds jobs which will follow come to Durham.
“I believe we have demonstrated forward-thinking partnership working which has not only already ensured a multi-million pound investment here, but sent a clear message to the business world.
“We must continue to work with the private sector to attract and retain investment, create jobs and broaden the portfolio of businesses establishing their bases here.”
The deal was brokered by the council’s business arm, Business Durham, following an approach by Atom in the spring of 2014.
Business Durham’s managing director, Simon Goon, said the move was a coup for the county.
“Sites both within and outside the region were under scrutiny and this gave us a real opportunity to bring in hundreds of good quality jobs in financial services and cutting edge technology,” he said.
“By subscribing to shares based on the rent we have shown how flexible we can be in working with the private sector.
“I have also already been approached by a number of other companies interested in setting up business close to Atom so this deal will act as a catalyst for further investment in Durham City.”
Northumbria House previously housed a number of the council’s teams, including sport and culture and Business Durham, which are now being accommodated at the nearby County Hall.
Atom Bank is aiming to be a challenger to the existing players in the banking market, and has appointed former head of the North East LEP Ed Twiddy as its chief innovation officer.
The brainchild of Newcastle-born Anthony Thomson, who founded Metro Bank, Atom will be an online only bank with no branches.
Regional investors include Sir Peter Vardy, NRG’s Lorna Moran, British Engines and Jeremy Middleton, while others include Jim O’Neill, former chair of Goldman Sachs Asset Management, Polar Capital, Anthemis Group.