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Small Firms Counselling Service

Volume 78: debated on Wednesday 1 May 1985

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asked the Secretary of State for Trade and Industry if he will make a statement on the continuing role of his Department's small firms counselling service in the light of the growth of the local enterprise agency movement.

The work of the small firms counselling service is being reorganised to operate increasingly through and in partnership with local enterprise agencies.

Is it my hon. Friend's intention therefore to change the objectives set for the counselling service?

I see a continuing role for the small firms service in giving its excellent advice to existing small businesses and start-ups. I hope that, over time, the local enterprise agencies will concentrate more on startups, leaving the resources of the small firms service to be concentrated in the area of special skills and also on the up-market counselling that it does so well.

Will the Minister give further consideration to the work in this field of the Co-operative Development Agency, which the Government supported last year? The small workers' and service co-operatives are now growing rapidly, and they need counselling in both marketing and accounting if they are to survive.

I know of the hon. Gentleman's interest in co-operatives. As I have said before, we are very anxious to support them. We have put the taxpayer's money where our mouth is by supporting the Co-operative Development Agency. We are funding it for the next six years to the tune of £200,000. More than 1,000 co-operatives have now been established in the country, but that figure must be compared with a total of 1·4 million small firms and 2·5 million self-employed. The £200,000 that we give the Co-operative Development Agency every year should also be contrasted with the £75,000 that we give to Business in the Community, which relates to the local enterprise agency movement. Business in the Community helps the local enterprise agency movement in many ways. We are incredibly generous to the Co-operative Development Agency.

Is my hon. Friend aware of the excellent work of the small firms service in west Norfolk. and in particular the work of Dr. John Knights? If my hon. Friend is to integrate the work of the small firms service into the local enterprise agencies, is there a continuing role for it as a separate entity?

My hon. Friend used the word integrate, but I prefer to use the word complementary in describing the way that the two services will operate. I envisage a continuing role for the small firms service and I do not envisage a time when we can do without it. It has doubled over the past two years. The expertise in the counselling teams, which are composed, as my hon. Friend knows, of industrialists and not civil servants, would be difficult to find in local enterprise agencies. Therefore, the roles are complementary.

Some of these agencies are undoubtedly doing an excellent job, but does the Minister recognise that many of them are virtually talking shops? Is the Department carrying out a cost-benefit analysis of their work, and is any consideration being given to the establishment of some objective standard of performance?

I am surprised that the right hon. Gentleman should frame his question in that way. I am sure he will realise on reflection that the local enterprise agencies would be offended at being called talking shops. The only shops that one could connect with the local enterprise agencies movement stems from the fact that we are anxious that, within the communities, they should be one-stop shops. A survey has been conducted by Business in the Community, which shows that the movement is extremely successful. Another recent survey conducted in Scotland shows that where there are local enterprise agencies there can be a reduction in the level of unemployment by about 2 per cent.