To ask the Secretary of State for Business, Enterprise and Regulatory Reform what criteria his Department uses in allocating funds to private sector companies to prevent redundancies. (179732)

State aid may be granted to private companies only if they are in difficulty; and in accordance with the European Commission's “Community guidelines on State aid for rescuing and restructuring firms in difficulties” (OJ C 244, 1.10.2004, p. 2.). A firm in difficulty is where, demonstrably, a company cannot stem its losses through its own resources, or with the funds it obtains from its owners/shareholders, or from market sources. In addition, the Department is obliged to follow the criteria set out in HM Treasury's Green Book:

http://www.hm-treasury.gov.uk/economic_data_and-tools/greenbook/data_greenbook_ index.cfm

on the economic assessment of all public sector spending and investment.

The Selective Finance for Investment in England (SFIE) scheme can provide funds to private sector companies to support new capital investment that will safeguard employment going forward. The criteria for the SFIE scheme are set out in the scheme guidelines that are publicly available:

http://www.dti.gov.uk/regional/investment/page29183.html