HC Deb 02 December 1985 vol 88 cc90-1W
Mr. Kenneth Carlisle

asked the Paymaster General when details of the new local enterprise agency funding scheme will be announced.

Mr. Trippier

Details of the new support scheme for enterprise agencies in England, the local enterprise agency grants scheme, are now available. A copy of the guidance notes on the scheme has been place in the Library.

The aim of the scheme is to help promote the establishment of viable enterpirse agencies across the country, particularly through encouraging greater private sector support. Agencies will be encouraged to expand and develop their services to small businesses, and to act as the focus for local networks of people and organisations similarly committed to helping local economic growth. The private sector is making a substantial contribution to local enterprise agencies. But we are very aware that many agencies currently face considerable difficulties in obtaining sufficient private sector funding to ensure their long-term future.

The new scheme will run for five years from 1 April 1986; £2.5 million has been set aside in 1986–87. In years one and two, assistance may be available to qualifying agencies up to a maximum of £20,000. The level of grant in individual cases will be dependent on the level of private sector funding but will also take account of the agency's business plan and, to ensure that support only goes to those who require it, the overall cash income of the agency. To encourage greater private sector support, the maximum level of Government grant will be reduced in later years while at the same time the private sector funding to trigger that grant will be increased. There will be no automatic entitlement to assistance.

To qualify for support, local enterprise agencies will need to be approved under the terms of section 48 of the Finance Act 1982. Applications will have to be supported by a three-year business plan as well as a five-year funding strategy. The business plan will have to show how Government assistance will be used to extend the scope and effectiveness of their services. The business plan will also contain indicators against which the agency's performance will be monitored. Assistance in subsequent years will be subject to satisfactory performance against targets in the plan.

The Government have asked business in the community to support local enterprise agencies in developing the business plan and funding strategies and in formulating their applications.

The Government are demonstrating through this scheme their commitment to helping develop a network of viable LEAs. But the success and strength of LEAs largely stems from the private sector's support for agencies. The Government look therefore to the private sector to step up its support to local enterprise agencies and to play its part in local economic development.