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Business: Government Assistance

Volume 503: debated on Wednesday 6 January 2010

To ask the Minister of State, Department for Business, Innovation and Skills what progress has been made in providing venture capital support to small businesses. (307369)

Since 2000 national Government have committed £400 million to a range of venture capital funds that have attracted a further £551 million of public sector investment. In 2006 Government established Capital for Enterprise Ltd. as an arm’s length body to manage these funds and that body now has more than £951 million under management. These funds have invested in nearly 600 businesses.

The enterprise capital funds are Government’s current main equity programme which continue to invest in early stage technology-orientated SMEs, together with the Aspire fund for female entrepreneurs and the capital for enterprise fund—part of the Real Help package. In addition Government are progressing delivery arrangements for the UK innovation investment fund, announced in June this year—as a fund of funds which will invest in underlying technology based funds including those in the healthcare and low carbon sectors. The Government have committed £150 million to this fund leveraging £175 million from the private sector so far, creating a funding pool initially worth £325 million.

The Government’s 2009 pre-Budget report announced our intention to establish a new growth capital fund, for SMEs seeking growth capital between £2 million and £10 million and plans are progressing to design and deliver that fund.

These funds are complemented by a range of regional funds operated by the regional development agencies (RDAs). RDAs are currently agreeing plans, totalling around £500 million for further regional fund delivery drawing in EU structural funds from the European regional development fund and additional private sector contributions from Europe.