Enterprise Initiative

HC Deb 13 November 1991 vol 198 cc541-2W

Mr. Morgan

To ask the Secretary of State for Trade and Industry what evaluation there has been so far of the usefulness of his Department's enterprise initiative to(a) consultancy companies and (b) entrepreneurs in receipt of assisted consultancy advice; and if he will make a statement.

Mr. Leigh

Since it was introduced in January 1988 the enterprise initiative consultancy scheme has made a major contribution towards overcoming the reluctance of small and medium-sized firms to use outside expertise to improve their competitiveness: more than 90,000 firms have sought assistance under the scheme, the majority of which have never before used consultants.

The need for monitoring and evaluation has been built into the enterprise initiative consultancy scheme from its inception. On going in-house monitoring is supplemented by independent evaluation. This is centered on interview surveys with two samples of assisted firms, carried out by independent consultants, Segal Quince Wicksteed Ltd. The two panels of firms are interviewed shortly after project completion and then again one to two years later. Reports of the first three stages of the four-stage survey programme have been completed and published as follows:

1. (a) Evaluation of the Consultancy Initiatives by Segal Quince Wicksteed, published in 1989 by HMSO, ISBN 0 11 514677 6.
2. (b) Second Stage, published by HMSO in 1991, ISBN 0 11 515269 5.
3. (c) Third Stage, published by HMSO in 1991, ISBN 011 515270 9.

The results of the fourth stage will be published in the new year.

Evaluation has demonstrated the benefit to firms of an assisted consultancy project. It has found that 70 per cent. of assisted firms began to reap clear commercial benefits within a year of their assisted consultancy project and expected to recover their full project costs within three years. Firms had experienced improvements in the relationship between operating costs and turnover; and had experienced wider benefits in terms of improvements to management capability and an increased confidence in running the business.

One of the major aims of the enterprise initiative consultancy scheme is to encourage the use of consultants among small and medium-sized firms. Evaluation has found that 51 per cent. of assisted firms were more likely to use full-price consultancy in future. The benefits to consultancy companies of the scheme are the opportunity to work on projects encouraged and supported by the scheme; and, in the longer term, the general opening up of the small and medium-sized firm market to consultancy.