Consultancy Initiatives (Hansard, 9 November 1990)

§ Mr. Lilley

Since they were introduced in January 1988 the consultancy initiatives have made a major contribution towards overcoming the reluctance of small and medium-sized firms to use outside expertise to improve their competitiveness: over 63,000 firms have sought assistance under the scheme, the majority of which have never before used consultants. Two out of three firms which have completed consultancy projects achieve increased profitability within a year.

Nevertheless, many established smaller firms with a potential for growth remain to be convinced that using expert advice can bring them real benefits. Moreover, consultants can do much more to market their services to small firms. I am therefore extending the scheme for a final three years from 1 April 1991, by which time I expect the consultancy market among small and medium-sized firms to be self-sustaining.

A recent independent evaluation of the scheme, to be published in due course, confirms that a majority of consultancy initiative clients need only one assisted consultancy to be stimulated to further use of consultants at full market price. In order to increase value for money to the taxpayer, I have therefore decided to concentrate the support available: from 1 April 1991, only firms which have not previously used consultants under the scheme will be eligible.

Many small firms have already been helped towards improved competitiveness and growth by the consultancy initiatives. In extending the scheme I intend that many more should be able to plan, with the scheme's help, to meet the challenges facing management in the 1990s, including the single market, environmental issues and new technology.