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Local Enterprise Agencies

Volume 124: debated on Tuesday 15 December 1987

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To ask the Secretary of State for Employment if he will make a statement on the progress of local enterprise agencies.

There are now almost 400 local enterprise agencies in the United Kingdom. My Department, through the local enterprise agency grant scheme, encourages the development of viable agencies in England. One hundred and sixty-eight agencies were supported in 1986–87.

I thank my hon. Friend for that helpful reply. Does he agree that local enterprise agencies are necessarily brought about as a result of a partnership between local interests, local authorities and, particularly, chambers of commerce? Does he also agree that bringing together the practical skills and knowledge of those individuals and organisations results in the creation of much new business and many new jobs, as is the case in the Leeds business venture?

Yes, indeed. I agree with my hon. Friend. The agencies are valuable institutions which improve the survival rate of small firms which consult them, as was shown in a recent report. The Leeds business venture is a long-established and well-supported agency, which receives our grant.

Does the Minister recognise that many local enterprise agencies in areas such as mine, which no longer benefit from inner-city policy or other Government policies to push money into areas of high unemployment, are worried about their future and about future money to enable them to create and secure jobs in places such as Derwentside, which, since 1979, has suffered enormous job losses? The agencies have done a good job, but they need Government support to continue it.

I recognise the concern which the hon. Lady expresses and which some of the agencies have expressed to me. The grant scheme to which I referred is intended as a pump-priming scheme to help agencies get going and develop. It is not the only way in which we assist them —there are others—and I am conscious of the case that the hon. Lady has made.

Does my hon. Friend agree that enterprise agencies have been a wonderful catalyst for bringing together management expertise from the larger companies to help the smaller ones? Have they not been one of the major contributions that have enabled the many start-ups that have taken place to continue, flourish and develop into medium-sized companies?

I agree entirely with what my hon. Friend has said. As I said earlier, the survival rate has improved a great deal. According to the report that I mentioned, only one in six of the companies that have had advice from enterprise agencies fail. The agencies also do a tremendous job in helping small firms to develop, and many job; are coming from that.