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Small Firms

Volume 172: debated on Thursday 17 May 1990

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To ask the Secretary of State for Employment whether he will list the principal measures taken by his Department since June 1987 to assist small firms.

Since June 1987 my Department has introduced several new measures to assist small firms and improve on the existing range of fiscal, financial, training and advisory measures.The principal departmental measures include:

The first of the new network of training and enterprise councils (TECs) came into being this April. TECs are responsible both for encouraging more businesses to invest in training and for enterprise activities designed to strengthen local economic growth.
The Department is giving high priority to its campaign to open up Government procurement to small firms. In the past year the guide for small businesses, "Tendering for Government Contracts" has been updated, and a booklet "Think Big, Buy Small" has been published and widely distributed to Government purchasing officers. My Department is also supporting a purchasing specialist in the Treasury's Central Unit on Purchasing to help Government Departments improve their purchasing procedures and to provide greater access for small firms to Government business.
April 1989 saw the introduction of business growth training (BGT) offering small firms help for better business and training plans. In its first year of operation BGT provided assistance to 83,000 clients.
This January the Training Agency sponsored the launch of the small business programme, an open learning initiative backed by the Open university and Cranfield school of management.
Two years ago the booklet, "Prompt Payment Please", was published in conjunction with an initiative to encourage good payment practice in both large and small firms. This has been welcomed by both the public and private sectors as a valuable guide to avoiding late payment of bills, which can particularly effect small firms.
The local enterprise agency project scheme (LEAPS) was introduced in April 1988 as part of the action for cities initiative. Financial support is available to enterprise projects run by approved enterprise agencies in any of the 57 urban programme authority areas. to date over £900,000 has been given in support of 136 projects. This complements the local enterprise agency grant scheme (LEAGS) which continues to contribute to enterprise agency core funding costs. Between them, both schemes have encouraged private sector sponsors to donate nearly £15 million over the past three years to support LEA work in advising small firms.
The loan guarantee scheme was improved in 1988 by simplifying the application procedure for loans up to £15,000, and in April 1989 by increasing the upper limit on loans to £100,000. As a result applications now average over 270 per month, compared to 100 a month two years ago.
Additionally, clients in the 16 inner-city task force areas have had a greater proportion of their loan guaranteed since 1988, and from April 1990 their premium has been reduced. Both changes are in recognition of the particular difficulties faced by inner-city residents trying to raise seed capital. In the three years to the end of this March over 6,800 loans were guaranteed to a value of £215 million.

These and other existing measures, such as the enterprise allowance scheme and the small firms service, have been successful in creating and maintaining a framework for enterprise and growth of the small business sector. During the last year alone my Department dealt with over 625,000 inquiries, counselling sessions and training activities for small firms at a cost of £237 million. In addition the 500,000th person has been helped to set up in business by the enterprise allowance scheme.