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Business: Government Assistance

Volume 496: debated on Wednesday 9 September 2009

To ask the Minister of State, Department for Business, Innovation and Skills how many businesses in Leicestershire have applied for assistance under the Enterprise and Finance Guarantee Scheme to date. (254340)

As of 12 August, in Leicestershire 70 businesses have been offered loans totalling £7.77 million.

To ask the Minister of State, Department for Business, Innovation and Skills how many officials at each grade have been employed on work relating to the Enterprise Finance Guarantee Scheme since its creation; how much has been allocated by his Department for staff costs; what recent discussions he has had with the Treasury on this issue; and if he will make a statement. (259064)

The Enterprise Finance Guarantee has been developed by the Department’s Enterprise Directorate, which has policy responsibility for start-up and growth for small and medium sized enterprises. The Directorate’s resources are deployed on a project basis whereby resources follow priority work.

The Enterprise Finance Guarantee was developed and is being monitored from within an Access to Finance team consisting of around a dozen staff with responsibility for policy and monitoring of all aspects of finance for small and medium businesses.

Capital for Enterprise Limited, a wholly owned Government non-departmental public body, is responsible for the delivery of the Government’s finance interventions, including the Enterprise Finance Guarantee.

To ask the Minister of State, Department for Business, Innovation and Skills what steps his Department is taking to assist small to medium-sized enterprises through the current economic downturn. (261966)

We have taken steps to help improve cash flow, to increase the availability of the credit businesses need, and to encourage investment so that businesses come through the recession ready to grow.

In particular, we obtained bank lending commitments from RBS and Lloyds to lend £27 billion additional lending to businesses this year. This includes lending guaranteed under the working capital scheme.

In addition, we introduced a trade credit insurance top-up scheme which provides protections for firms suffering a reduction in cover.

We have also taken steps to assist small businesses to overcome short-term cash-flow problems—for example the Enterprise Finance Guarantee and also measures to ensure prompt payment by both public and private sectors.

To ask the Minister of State, Department for Business, Innovation and Skills how many applications for finance guarantees from companies in each local authority area under the Enterprise Finance Guarantee Scheme have been (a) received and (b) approved. (270686)

The Department records information about the Enterprise Finance Guarantee on a regional basis. It does not hold the information at the level requested and it could be provided only at disproportionate cost.

Set out in the table is the information, for all UK regions, since the launch of the Enterprise Finance Guarantee on 14 January.

Total eligible cases

Total value of eligible cases (£ million)

Number of new loans offered to customers

Total value of offered Loans (£ million)

Number of offered loans drawn down

Total value of drawn Loans (£ million)

Cumulative data

6,027

680.98

4,520

454.66

3,498

337.98

Region

No region details as yet

1,085

173.91

1

0.1

0

0.0

East Midlands

342

37.60

323

35.33

244

25.7

East of England

569

50.30

540

46.40

409

36.06

London

590

68.47

537

59.92

389

40.95

North East

173

16.89

163

15.90

125

10.89

North West

527

52.95

475

46.25

403

40.16

South East

709

72.41

663

67.08

517

50.64

South West

555

50.44

527

47.22

411

32.33

West Midlands

469

44.82

437

41.44

335

30.53

Yorkshire and The Humber

305

32.18

278

29.41

217

21.2

Wales

242

18.50

229

17.53

167

11.29

Scotland

405

51.94

305

39.58

254

32.67

Northern Ireland

56

10.45

43

8.51

27

5.54

To ask the Minister of State, Department for Business, Innovation and Skills what the (a) total cost and (b) cost for (i) staff time, (ii) refreshments, (iii) security, (iv) transport and (v) other matters was of arranging and hosting (A) the employment summit on 12 January 2009, (B) the car industry summit on 28 January 2009, (C) the car industry summit on 12 December 2008, (D) the credit care summit on 26 November 2008, (E) the prompt payment summit on 10 December 2008, (F) the car industry summit on 27 November 2008 and (G) the pharmaceutical industry summit on 27 January 2009. (271593)

Regarding the Employment Summit on 12 January, I refer the hon. Member to the answer given by my right hon. Friend, the then Minister of State for Pensions and the Ageing Society to the hon. Member for Welwyn Hatfield (Grant Shapps) on 5 May, Official Report, column 118W.

Regarding the Car Industry Summit on 28 January, I refer the hon. Member to the answer given by my hon. Friend, the then Parliamentary Under-Secretary of State for Economics and Business to the hon. Member for Welwyn Hatfield (Grant Shapps) on 20 March, Official Report, column 1408W.

BIS has no record of a Car Industry Summit being held on 12 December 2008.

The Credit Card Summit was held at the BERR conference centre in London on 26 November 2008. The total cost of the event was £6,080. The costs are broken down by budgetary headings in the following table.

Expenditure breakdown of Credit Card Summit held on 26 November 2008 (£)

Catering costs

547

Venue hire

273

Staff costs

5,260

Total

6,080

Notes:

1. Figures rounded up to the nearest pound.

2. Calculating exact staff costs would be onerous, therefore figures are an estimate.

The Prompt Payment Summit on 12 December 2008 was held at the BIS Conference Centre in London. Refreshments were limited to tea and biscuits to around 20 delegates so costs were therefore minimal.

The Car Industry Summit on 27 November 2008 was held at the BIS Conference Centre in London. Total costs for this event were £784, broken down as £287 for room hire and £497 for catering.

The Pharmaceutical Summit held on 27 January was chaired by my right hon. Friend the Prime Minister at 10 Downing street. My noble friend, the Minister for Economic Competitiveness and Small Business participated in the summit. BERR made no financial contribution to the cost of hosting the summit. BIS made no estimate of the cost of staff time, security or transport in preparing BIS's input to this event. This information is not held centrally and to do so would involve disproportionate cost.

To ask the Minister of State, Department for Business, Innovation and Skills how many (a) small and medium-sized enterprises and (b) individuals have applied for assistance under each initiative announced by his Department since November 2008; how many applications have been (i) accepted and (ii) rejected; for what reasons applications were rejected; and how much funding has been provided in relation to each initiative. (276869)

Since November 2008 the Department has announced the following schemes.

Enterprise Finance Guarantee (EFG)

This was launched on 14 January 2009. To date, over £680 million of eligible applications from 6,207 firms that have been granted, are being processed or assessed. 4,526 businesses have been offered loans totalling nearly £455 million.

Decisions on individual lending rests with the lender, whose decision will follow a commercial assessment of the viability of the proposition and the ability to service the loan and other charges, the suitability of EFG as opposed to lender’s other commercial lending products, and the EFG eligibility criteria.

Capital for Enterprise Fund

The Capital for Enterprise Fund was also announced on 14 January. 1,611 businesses have registered their interest in the fund. The fund managers have made offers totalling £36 million to 24 businesses. Four businesses have accepted the terms of the funding offered with a total value of £5 million. Thus far, two businesses have received investment totalling £3 million. The fund managers are continuing due diligence on the further proposals that have been put forward.

Trade Credit Insurance

Take-up is demand-led as it depends on the number of credit limit reductions in the private sector. All applications, payments, claims and queries under the scheme are dealt with by the trade credit insurer. At present, 52 policies totalling £7.045 million have been accepted by trade credit insurers.

Scrappage Scheme

Over 165,923 orders for new vehicles have been taken since the scrappage scheme was announced in the Budget. The scheme was launched on 18 May. Under the terms of the scheme, vehicle dealers liaise with customers. BIS does not hold information on whether orders are made by businesses or individuals. A small number of orders are cancelled/removed each week for a variety of reasons e.g. accidental duplicate orders by dealers, the customer changing their mind. However, we anticipate that, subject to any future minor adjustments of this sort, all orders that meet the scheme criteria would qualify for Government funding of £1,000 per vehicle matched by at least £1,000 from the manufacturers.

To ask the Minister of State, Department for Business, Innovation and Skills what recent discussions his Department has had with accredited lenders under the Enterprise Finance Guarantee scheme about the terms and conditions under which loans are made to businesses; and if he will make a statement. (279302)

[holding answer 15 June 2009]: Capital for Enterprise Ltd, which delivers the Enterprise Finance Guarantee on behalf of BIS, has regular discussions with the main participating lenders about lending under the scheme and is working with them to ensure terms and conditions are communicated throughout their networks to Relationship Managers. Each lender has access to a web based portal which includes information on the EFG rules and training on the use of the portal.

To ask the Minister of State, Department for Business, Innovation and Skills what recent assessment he has made of the effectiveness of the Enterprise Finance Guarantee scheme in supporting small businesses; and if he will make a statement. (279303)

[holding answer 15 June 2009]: The Enterprise Finance Guarantee has been designed to lend to viable businesses at the margins of commercial lending decisions representing approximately 3 per cent. of the total SME lending market and is facilitating lending that would otherwise not be available. Since the launch of the scheme in January:

ixAs of 12 August 2009, over £680 million of eligible applications from over 6,027 firms has been granted, being processed or assessed.

So far, over 4,520 businesses have been offered loans totalling almost £455 million.

The network of approved lenders has expanded from eight at launch to twenty-seven, providing access across the whole of the UK.

A mystery shopper exercise (of the main four EFG lenders) showed that 77 per cent. of bank business advisers surveyed showed a good awareness of EFG.

To ask the Minister of State, Department for Business, Innovation and Skills how many loans have been made to small and medium-sized businesses in (a) Derbyshire and (b) West Derbyshire under the Small Business Loan Guarantee scheme since its inception. (279652)

The Enterprise Finance Guarantee was launched on 14 January and replaced the Small Firms Loan Guarantee. Set out in the table is the information for Derbyshire and West Derbyshire:

Number

Value (£ million)

Derbyshire

Loans offered

75

7.00

Loans drawn

62

5.66

West Derbyshire

Loans offered

5

0.40

Loans drawn

3

0.34

To ask the Minister of State, Department for Business, Innovation and Skills what steps his Department and its predecessors have taken to (a) assist small businesses, (b) assist medium-sized businesses, (c) develop the skills base, (d) facilitate innovation and (e) facilitate business start-ups in Coventry in the last two years. (280718)

[holding answer 18 June 2009]: The information is as follows:

1. The Government are committed to ensuring that a comprehensive range of assistance is available, particularly to businesses affected by the economic downturn. The support available includes a package of schemes to address the cash flow, credit and capital needs of small businesses under the Real Help for Business campaign launched in January 2009. Full details of the support available can be found at:

www.businesslink.gov.uk/realhelp

2. Within the West Midlands region, The West Midlands Task Force set up by the Minister for the West Midlands, has established a 'one stop shop' website at:

www.supportwm.co.uk

dedicated to signposting businesses and individuals across the region to support available, including specialist regional support.

3. The following provides details of the range of support available to businesses at a national and regional level. It should be noted that it is not possible to provide Coventry specific data in many cases, as data are not routinely available at a local level and schemes do not generally distinguish between small and medium sized firms.

National Measures to assist business under Real Help for Business—January 2009 to 21 August 2009

4. Support available includes government guaranteed lending under the Enterprise Finance Guarantee scheme, the Capital for Enterprise Fund, the RDA Transition Loan Funds and a series of other financial measures instituted to help businesses with their cash flow such as the Prompt Payment Code, Top-up Trade Credit Insurance. Other key measures put in place include the Help for Business Helpline and special help to the automotive sector including scrappage and the Automotive Assistance Programme. The following provides details of the take up of this support at national level. Figures on take up are provided for the West Midlands where available.

Overview of national initiatives—cumulative figures to 21 August 2009

National initiatives

Enterprise finance guarantee scheme

Over 4,600 businesses have been offered total loans of £470 million.

West Midlands EFG: 448 businesses have been offered total loans of £43.15 million.

Capital for enterprise fund

Almost £36 million offered to 24 businesses.

RDA transition loan funds

Loans totalling over £30.3 million have been agreed.

Prompt payment code -business to business

427 signatories to the Prompt Payment Code.

75 West Midlands companies have signed up to the code.

Prompt payment code -government to business

In July, central Government departments paid 9 out of 10 invoices within 10 days; median performance across 22 departments was 92.96 per cent.

Top-up trade credit insurance

52 accepted applications to a value of £7.045 million made up of 39 suppliers in 7 sectors.

Help for business helpline

A total of 226 companies were considered urgent enough to require Government intervention by MPs and Peers who referred cases to the Help for Business helpline. 155 of the total cases were identified as SMEs; 29 from the West Midlands.

Business link health checks

Over 74,000 businesses have benefited from a health check

West Midlands: 9,706.

Temporary vehicle scrappage scheme

Almost 166,000 orders for new vehicles have been taken since the scheme was announced in the Budget. 9 per cent. of these were placed in the West Midlands.

41 manufacturers signed up.

Automotive assistance programme

BIS officials have been in direct contact with over 90 companies, which is around 2/3rds of all companies who qualify for the support package. To date, officials have worked with over 20 companies on their formal expressions of interest.

Regional measures to assist businesses over the last two years

5. Key initiatives are set out in the following table along with details of the level of support provided to businesses in the Coventry and Warwickshire area during 2007-08 and 2008-09 (Coventry data are in italics where they are available).

Key business initiatives

Advantage West Midlands (AWM) businesses assisted

3, 267 businesses assisted.

AWM business start ups

103 businesses supported.

AWM inward investment activity

Assisted 11 new foreign owned companies to set up and in the expansion of 2 new foreign owned companies.

AWM grant for business investment (includes SFIE)

26 businesses received grants totalling £2 million.

AWM regional venture capital funds

14 businesses in Coventry received funds totalling £6.3 million.

Business link West Midlands

Within Coventry:

Market engagement/penetration (unique businesses) with 6,444 businesses.

Assisted 272 businesses.

Assisted 465 start ups.

1,508 intensively assisted incorporating diagnostic review and follow up support.

1,961 individuals given advice on business start-up in 2008-09.

Manufacturing advisory service

Within Coventry:

Market engagement/penetration with 268 businesses.

Intensively assisted 108.

UK trade and investments (funded by BIS)

58 companies, (mainly small businesses) were assisted through its Passport to Export Programme.

Additionally, outside of the Passport to Export Programme, significantly assisted a further 193 (mainly medium sized) companies to increase their exports.

Local enterprise growth initiative (LEGI) aimed at increasing levels of entrepreneurial activity and supporting SMEs. LEGI was jointly sponsored by ODPM (now DCLG), DTI (now BIS) and HM Treasury

Between April 2006 and March 2009, Coventry received just over £12 million, through the LEGI initiative, outcomes include:

support and advice to 626 businesses

403 individuals being supported in developing business propositions leading to 311 new business start ups.

Advantage transition bridge fund

The Advantage Transition Bridge Fund reopened in November 2008. To date, it has made offers of loans totalling £9.3 million to 55 businesses. Of these, 9 businesses were located in Coventry and Warwickshire, who received loan offers totalling £1,405,000.

Business link business doctor service

The business doctor service (which operated during February and March 2009) sought to address the immediate needs of businesses affected by the economic conditions. The service was targeted at providing face to face support on key issues, including strategy development, marketing, financial management etc. A small element of grant funded specialist support to help businesses access advice on financial restructuring and recovery measures was also provided. This initiative delivered specialist support to 140 businesses across the region (sub regional breakdown not available), awarding £340,000 in grant funding.

Community development finance institutions (CDFIs)

32 loans were made to Coventry based businesses, totalling £401,734.

Innovation support

6. The Coventry and Warwickshire sub-region has significant strengths in innovation being home to Coventry University and the University of Warwick, as well as clusters of high growth industries including ICT, digital media and medical technologies. The area benefits from region wide innovation activity, supported by AWM, such as Innovation Networks, Grant for Research and Development, the Index Voucher Scheme and Knowledge Transfer Partnerships. Also, going forward Business Link West Midlands is developing the Innovation Advisory Service to work with partners (including MAS) to offer a range of innovation support to business.

7. Examples of innovation support provided by AWM to businesses in the Coventry and Warwickshire area during 2007-08 and 2008-09 include:

20 Research and Development Grants, totalling £0.7 million.

Development of a world-class research and development park at Ansty, which has already attracted Ericsson’s international R and D department. Ansty has also been identified as the location for the National Manufacturing Technology Centre.

Part funding the University of Warwick’s flagship scheme—The Digital Lab. This centre includes visualisation and simulation technologies and brings together some of the world’s top academics in digital technologies working on digital manufacturing and digital healthcare and space for companies to work with researchers.

The launch of the Serious Games Institute and Health Design Technologies Institutes at Coventry Universities. Both of these centres have strong business links and are in key areas of regional industry strength/growth.

Development of Centres of Excellence in lightweight vehicles at Warwick University; this builds on AWM’s funded Premium Auto Research and Development Programme (PARD) at the University.

Under the AWM led Science City Programme of activity, Warwick University are leading three projects: Energy Efficiency (around £9 million for sustainable building and transport technologies—heat pumps, power electronics and automotive and rail applications); Translational Medicine (clinical trialling leading to improvements—particularly in obesity, diabetes, heart disease etc.) and Advanced Materials two (innovative uses of new materials including sensors in harsh environments, composites in transport applications and smart bio-materials).

Coventry University was involved in a Science City demonstrator project on Intelligent Vehicles—using wireless technologies to position vehicles for trialling/testing. This led to a joint venture between two of the region’s companies (one Coventry based).

The universities of Coventry and Warwick are also involved in a number of other AWM innovation support interventions including Innovation Vouchers, Innovation Networks (led by Coventry University) and Knowledge Transfer Partnerships.

8. Additionally, UKTI through its Passport to Export Scheme has targeted and assisted seven research and development intensive companies. More generally, working with Coventry University Enterprise, UKTI also provides a range of training and support programmes to help businesses in Coventry and across the region.

Developing the skills base

9. The following table provides an overview of support provided in the Coventry and Warwickshire area over 2007-08 and 2008-09, unless otherwise stated. Coventry specific data are provided where available.

Regional initiatives

Train to gain

Over the last four years £4.5 million funding has been invested, with over 4,500 employees benefiting from training.

During 2008-09 an additional £7 million was invested in the area in Train to Gain delivery, enabling over 6,000 employees to benefit from training.

Coventry LEGI initiative

Between 2006-09 LEGI provided mentoring support, training and/or advice to over 1,300 individuals to enable them to overcome barriers to employment or enterprise start up.

AWM’s advantage graduate scheme

Over the last two years it has:

Completed around 40 placements in the Coventry area.

Assisted around 160 students from Coventry to improve their employability skills.

10. Under the Advantage Graduate Scheme, AWM also collaborates with partners to produce a brochure detailing regional job opportunities which is available to all final year students in the West Midlands. The 2009 edition contains a list of 1,000 business in the West Midlands who are interested in employing graduates, over 100 of which are in Coventry.

11. In terms of Leadership and Management skills, AWM supports a brokerage service delivered by Business Link that targets leadership and management support at middle tier aspirational businesses. The service works with management teams to improve business performance. So far six teams have been supported in Coventry—approximately 10 per cent. of the total number.

12. AWM has also provided funding for TUC Learning Centres in the Coventry area to enable work based learning.

To ask the Minister of State, Department for Business, Innovation and Skills what recent steps his Department has taken to assist small and medium-sized businesses in Leeds. (282038)

[holding answer 24 June 2009]: Through Business Link Yorkshire, small and medium sized businesses (SMEs) in Leeds can access the wide range of mainstream Government business support products and services. In 2008-09 Business Link Yorkshire dealt with 14,727 requests for advice and support from SMEs in the Leeds local authority area.

The Government have delivered on their commitment to simplify support with the roll out of the Solutions for Business portfolio of services. Solutions for Business offers a comprehensive and streamlined package of 30 publicly funded support products for SMEs.

Additional support has been made available to help SMEs during these tough economic times through Real Help Now for Businesses. This includes business financial health checks and a rapid response service to help SMEs hit hardest by the recession. The rapid response service provides support to people recently made redundant or facing redundancy to help them find new jobs or consider starting a business.

The full suite of business support services is routinely delivered in Leeds, including: advice, guidance and practical financial support with business start-ups, support for entrepreneurs and innovators with information on how to develop and explore their ideas, from inspiration to planning, to research, marketing, launch, business growth and exporting. Jobcentre Plus assists local businesses with recruitment and training and the LSC provides Train to Gain and apprenticeship funding.

Leeds secured £20.6 million from the Government’s Local Enterprise Growth Initiative (LEGI) in 2006. The Leeds LEGI programme—known locally as “Sharing the Success”—aims to develop enterprise, create new jobs and boost prosperity in some of the most disadvantaged communities and runs until March 2011. “Sharing the Success” is funding a wide range of community based initiatives including a network of local enterprise centres, business start up advice and a business growth fund for existing businesses.

Leeds Chamber of Commerce and Leeds City Council have formed a partnership—Enterprise Leeds—which brings together a range of business support organisations. They include Leeds Media, China Britain Business Council, Business Link Yorkshire and the West Yorkshire Employer Coalition Through Enterprise Leeds, businesses and entrepreneurs in the city can access a wide range of services including:

finding business premises in Leeds

information and advice to business advice and support organisations

business support for start ups; existing businesses and inward investors

business development and support for minority ethnic businesses

To ask the Minister of State, Department for Business, Innovation and Skills how many businesses in Tamworth constituency have (a) applied for and (b) received funding from (i) the Enterprise Finance Guarantee and (ii) the Working Capital Scheme to date. (285366)

The Department records information on the Enterprise Finance Guarantee on a regional basis, including the West Midlands. It does not hold the information at the requested level and it could be provided only at disproportionate cost.

Set out in the table is the information for West Midlands since the launch of the Enterprise Finance Guarantee on 14 January:

Number

Value (£ million)

Eligible applications

469

44.8

Loans offered

437

41.4

Loans drawn

335

30.5

No companies have received funding under the Working Capital Scheme. The Working Capital Scheme provides guarantees to banks on portfolios of short-term loans: businesses cannot apply for guarantees under this scheme.

To ask the Minister of State, Department for Business, Innovation and Skills how much has been (a) offered to businesses, (b) accepted by businesses and (c) received by businesses under the Capital for Enterprise Fund. (287032)

The appointed fund managers of the Capital for Enterprise Fund have so far made offers totalling almost £36 million to 24 businesses. Four businesses have accepted the terms of the funding offered with a total value of £5 million. The fund managers are continuing due diligence on the further proposals that have been put forward. Two businesses have received investment totalling £3 million.

To ask the Minister of State, Department for Business, Innovation and Skills pursuant to the answer of 13 July 2009, Official Report, columns 189-90W, on business: Government assistance, by what criteria his Department will determine whether an industrial project is (a) advanced and (b) of strategic importance to the UK's economic renewal. (288218)

“Building Britain’s Future: New Industry, New Jobs” set out our analysis of the opportunities facing the economy and the foundations of UK competitiveness. Determining whether projects are advanced and strategic will depend on an assessment of how the proposal fits with opportunities for UK-based businesses and whether it represents an opportunity where Government can have a real and beneficial impact. The assessments take into account, among other factors, the potential for a project to develop systemic linkages to the rest of the economy and meet public needs, the importance of a project for the economic future of a given region, the technological novelty and spill-over potential and the extent to which a project leads to increased use and further development of workforce skills.

In addition, all proposals will be appraised to ensure that they have a clear rationale that Government intervention will make a difference and provide good value for money in delivering longer term benefits to the UK wide economy.

To ask the Minister of State, Department for Business, Innovation and Skills pursuant to the answer of 13 July 2009, Official Report, columns 189-90W, on business: Government assistance, by what mechanism businesses will be able to access the £250 million of the Strategic Investment Fund which has been ring-fenced specifically for low carbon initiatives. (288317)

The aim of the Strategic Investment Fund is to support the UK being in a stronger position to take advantage of opportunities as the global economy returns to growth. Although the SIF is not a fund to which businesses can apply directly, BIS seeks and continues to welcome a broad engagement with business and other organisations to understand opportunities and challenges they face as well as the areas in which government action can have a bigger impact.

“The UK Low Carbon Industrial Strategy”, published on 15 July 2009, set out the first investments from the £250 million of funding allocated for low carbon economic development. It will deliver targeted support for sectors with high growth potential such as offshore wind, wave and tidal energy, and remove barriers to low carbon investment in the UK.

Announcements on specific projects and sectors to be funded will be made over the coming months. Where it is possible to bid for elements of funding, the process for doing so will be made clear when funding is announced.