Blackburn with Darwen Council said it wanted to avoid "creatives having to move away to further their careers" The fund will help pay for 250 volunteers and 12 paid workers in Lancashire, which has a historic reputation for manufacturing.
The money would be used to develop skills and improve employability, and to set up pop-up events and school initiatives.
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The Charities Aid Foundation has set up a scheme, called the Social Enterprise Assist, that will render interest-free loans of up to £10,000 each to help social enterprise start-ups.