HC Deb 28 April 1988 vol 132 cc219-20W
Mr. Pike

To ask the Chancellor of the Duchy of Lancaster if he will publish the various forms of assistance available from his Department for the assistance of small firms; and what is the respective expenditure involved.

Mr. Kenneth Clarke

We operate a number of schemes which are specifically directed at small firms. Details are set out as follows.

(i) The consultancy initiatives which are available under the enterprise initiative offer financial support to independent companies or groups with fewer than 500 employees for between five and 15 days specialist consultancy in the following key management functions: quality, design, marketing, manufacturing systems, business planning, financial and information systems. DTI pays two thirds of the cost in the assisted areas and urban programme areas and 50 per cent. of the cost outside these areas. Total provision is £274 million over the next three years.

(ii) Regional enterprise grants, which were introduced on 1 April 1988, provide assistance to small firms with fewer than 25 employees for investment and innovation projects in the development areas. Grants of 15 per cent. of the cost of fixed assets in an investment project are available up to a maximum of £15,000. Grants of 50 per cent. of eligible costs in an innovation project are available up to a maximum of £25,000. DTI expenditure on these grants is expected to rise to over £50 million per year by 1990–91.

(iii) The business improvement services (BIS) scheme, which is jointly funded by the DTI and the European regional development fund, comprises a package of measures designed to assist firms with fewer than 200 employees. It includes an element which enables firms to claim grants of up to 70 per cent. of the cost of consultancy advice. The scheme is available to firms located in specified areas of England affected by the decline in the steel, shipbuilding, textiles and fishing industries. More recently BIS has been introduced in west Cornwall following the closure of the Geevor tin mine and in the Thanet travel-to-work area. Total expenditure on BIS will amount to £56.5 million over the period 1984–90, when the scheme will come to an end.

(iv) The competition for small firms merit awards for research and technology (SMART) is open to firms employing fewer than 200. The 100 best ideas put forward will each receive a 75 per cent. grant towards total costs of £50,000 (a maximum grant of £37,500) to develop a new product or process over the course of a year. The closing date for entries is 30 June 1988; the winners will be announced in November 1988. It is expected that after one year about half the winners will go on to a second stage in which the maximum award per firm will be £50,000.

In addition to these specific schemes, small firms may also take advantage of other forms of DTI assistance which is available to firms of all sizes:

  • Regional selective assistance
  • The export initiative
  • The research and technology initiative
  • The business and education initiative

Small firms in the inner cities are also helped through many of the projects supported by the Government's inner city task force, for which my Department is responsible. Overall expenditure by the task force is expected to total some £16 million in 1988–89.