A Birmingham firm which restores historic locomotives and runs steam trains on the UK rail network is aiming for further growth after securing a grant to expand its facilities.

Tyseley Locomotive Works (TLW) benefitted from a £100,000 grant from the European Regional Development Fund (ERDF) to help finance a new state-of-the-art workshop costing £300,000.

The grant came through Birmingham City Council’s Tyseley Property Assistance Programme grant scheme, set up to encourage SMEs in the area undertake site improvements or build new facilities.

The area became the Tyseley Environmental Enterprise District in September 2012 – one of six economic zones launched as part of the city council’s Economic Zones Prospectus.

The recently-completed 850-square-metre workshop at TLW will enable the firm, which restores, maintains and services steam and diesel locomotives and rolling stock, to meet growing demand for its services.

It has also led to the creation of four new jobs and helped to secure the long-term future of the existing workforce of 29. Two of the new roles are for apprentices, one of whom was recruited through Bournville College, which TLW has a close working relationship with.

Bob Meanley, managing director and chief engineer, said: “This is one of the most marvellous benefits we have had for many years.

“We have been growing little by little over the last 20 years but there has been no real input of capital until this came along. Previously everything has been out of what we earned.

“It has made the difference between us having this facility or not, though hardly a day goes by without people saying how did we manage without it?”

Mr Meanley said the new facility not only enabled heavy parts to be moved more efficiently and easily, but also meant work previously done outside could now been carried out indoors.

Emphasising the benefits he said: “It’s a cast-iron certainty that having a facility like this improves your business and we will be forever grateful. What it has given us is the best locomotive repair shop in the UK. It means we can improve the efficiency of the business and will send a message to people that we have probably the most professional workshop in the country.

“It will also allow us to be more competitive in our pricing as we can do things more efficiently.”

TLW, formerly Birmingham Railway Museum, was founded at its Warwick Road site by Pat Whitehouse, whose son Michael is chairman and trustee of parent company the Vintage Trains Charitable Trust, formerly the Birmingham Railway Museum Trust.

The Vintage Trains arm of the business operates the Shakespeare Express service, which runs on Sundays between Birmingham and Stratford-upon-Avon during the summer months and is England’s only regular mainline steam train. It also organises special steam train charters throughout the UK, most recently running one to Plymouth.

Annual turnover for the company is currently around £1.4 million with revenue split equally between engineering at TLW and the heritage trains business.

The company as a whole also has a number of partnerships with local firms involving everything from manufacturing components to catering for its charter trains.

Mr Whitehouse estimated the company spent between £300,000 and £400,000 in the local community each year.

Mr Meanley added: “We are almost a Unipart for Great Western Railway locomotive spares. These are components that you can’t just make from scratch but we have a network of suppliers who can machine things for us so it goes down the supply chain.

As well as its heritage engineering business, TLW also undertakes maintenance work for companies like Chiltern Railways and DB Schenker Rail.

Current restoration projects at TLW include Clun Castle, which was the last steam locomotive out of the old Snow Hill Station, and the privately-owned Nunny Castle.

“Clun Castle was going to go to Devon but the demand to run it with special trains was so great we kept it here,” said Mr Meanley. “It is now 63 years old and is undergoing a heavy overhaul where it is stripped down to the bare bones and put back together again.’’

Welcoming TLW’s grant, Councillor Tahir Ali, the city council’s cabinet member for development, jobs & skills, said: “SMEs and micro-businesses are crucial for Birmingham’s economy and will be at the centre of any help and support the city council will deliver.

“This is a positive outcome of the incentives the new administration has embraced and shows our commitment to manufacturing and engineering remains steadfast. Without grant funding this project would not have been possible.”