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Economic Situation

Volume 503: debated on Thursday 7 January 2010

To ask the Minister of State, Department for Business, Innovation and Skills for which policies implemented as part of the Government's response to the recession his Department is responsible; when each such policy was determined; what timetable has been set for the implementation of each such policy; and what funding under each budget heading has been allocated to each such policy. (309341)

The BIS policies that were designed specifically to respond to the economic downturn are those launched as “Real Help” schemes by the predecessor Departments (BERR and DIUS), as well as targeted support for graduates and key industrial sectors. The information you have requested is summarised in the following table.

Scheme

Date agreed

Timetable for implementation and key milestones

BIS funding

Enterprise Finance Guarantee

Announced in November 2008. 12-month continuation announced in December 2009.

14 January: Scheme launched to enable up to £1.3 billion of additional bank lending to SMEs by 31 March 2010. Up to £500 million of additional lending to be enabled between 1 April 2010 and 31 March 2011.

Scheme is subject to a 13 per cent. cap on net defaults—Government liability limited to £125 million for initial lending and £50 million for additional lending.

Capital for Enterprise Fund

Announced in January 2009.

January 2009: Scheme announced. Fund registered interest while fund managers were being appointed. April 2009: fund managers appointed. End of March 2010: Fund will be closed to new investments. Fund is on course to invest its allocation in this period.

Fund is £75 million, comprising £50 million of Government funds and £25 million committed from banks. £55 million is committed to be invested in period up to the end of March 2010, with £20 million reserved for follow on funding.

Working Capital Scheme

Announced in January 2009.

January 2009: Scheme launched. March 2009: EU State Aids approval received. April 2009: First tranche of guarantees agreed with RBS and Lloyds Banking Group. July 2009: Second tranche signed with Lloyds Banking Group. Short-term existing bank lending is guaranteed up to the end of March 2011.

The scheme is designed to be cost neutral. An appropriate provision has been made to cover the possibility of unexpected losses.

Trade Credit Insurance Top-up Scheme

Announced in April 2009.

May 2009: Scheme launched to cover reductions in trade credit insurance cover from 1 October 2008. Two changes made to the scheme: (1) June 2009: Eligibility for the scheme was backdated from 1 April 2009 to 1 October 2008. (2) August 2009: The price was reduced and cover limits were increased. 31 December 2009: Scheme closed to new applicants and all policies will expire by 30 June 2010 at the latest.

Demand-led scheme designed to be cost neutral. Contingent liabilities under the scheme capped at a maximum of £5 billion.

Prompt Payment

Ongoing interest. However, in response to evidence of extending payment times in autumn 2008, BERR announced a range of enhanced measures focused on Government-to-business and business-to-business payment.

October 2008: commitment for all central Departments to pay invoices within 10 days—19 out of every 20 invoices are now paid in 10 days. November 2008: BERR (with leading UK business organisations) launches a series of managing cash flow guides. December 2008: BERR supports launch of a new Prompt Payment Code by the Institute of Credit Management. There are now 740 signatories.

Development of 10 managing cash flow guides—total cost in the region of £30,000.

Automotive Assistance Programme

The Automotive Assistance Programme (AAP) received European Commission State Aids approval on 27 February 2009 and was launched in March 2009.

AAP operates under the European Commission Temporary Framework for State Aids, which ends on 31 December 2010. The final maturity dates of loan guarantees and loans can extend beyond 2010.

Will support investment in automotive sector of up to £2.3 billion through loan guarantees and, exceptionally, loans.

Vehicle Scrappage Scheme

Announced in April 2009.

May 2009: Scheme launched. September 2010: Additional funding to the scheme announced.

Up to £400 million.

Response to Redundancy

Announced in November 2008.

April 2009 to December 2010.

£100 million.

Six month offer

Announced in January 2009.

April 2009 to March 2011

£83 million.

Young Person's Guarantee (Routes into work and work- focused training strands)

Announced in April 2009.

November 2009 to March 2011.

£122.4 million

Train to Gain SME flexibilities

Announced in October 2008.

On offer from January 2009. Flexibilities for funding for repeats ongoing; funding for short units due to end July 2010.

From Train to Gain budget, up to £350 million of growth over two years.

Professional and Career Development Loans (PCDLs)

Announced in the New Opportunities White Paper in January 2009.

1 July 2009: An enhanced version of the Career Development Loans programme went live. We remain committed to delivering 45,000 loans per year as soon as the capacity exists within banks to meet that target.

£12 million additional money allocated for 2009-10, with £24 million for 2010-11. This is on top of the recurrent baselines in place (to support existing Career Development Loans) of £25 million per year.

Apprenticeships (England). 35,000 additional places in 2009-10

Announced January 2009.

2009-10 financial year: 35,000 additional Apprenticeship starts in England funded by DCSF and BIS.

£140 million (BIS and DCSF).

Support for Graduates

Office for Graduate Opportunities (OGO) established in April 2009 in response to downturn. OGO responsible for several initiatives, as summarised in next column.

Internships: initial target of 5,000 internships now increased to 20,000. To be delivered by March 2010. Graduate Talent Pool website: went live in July 2009. Post-graduate study: ongoing policy to increase places—around 24,000 additional places expected—and support through PCDLs (see separate entry in table). Volunteering: 4,000 full-time and over 50,000 part-time or short-term. Help with business start-up or entrepreneurship training: including via HEFCE's Economic Challenges Investment Fund (ECIF) and Flying Start. Ongoing policy. Extra Mini-Knowledge Transfer Partnerships: 10-40 week placements in SMEs for graduates/postgraduates to work on specific projects vital to the business. Teach First: places for 2009/10 and 2010/11.

BIS funds the Graduate Talent Pool website and provided funding of £1.184 million in 2009-10 to cover infrastructure and publicity costs. In addition, BIS is working with DWP and HEFCE to deliver 10,000 subsidised internships, at a cost of around £16 million.