Supplementary memorandum submitted by
the Department of Trade and Industry (DTI) (ES 16A)
DTI Programmes with Employment Impacts covered
at Select Committee Hearing, 15 May 2002
To promote enterprise in disadvantaged areas
and amongst groups under-represented in business ownership.
The Fund comprises a number of activities including:
a Development Fund to encourage innovative approaches to business
support; the Business Volunteers Mentors Association (BVMA); support
for Community Development Finance Institutions (CDFIs); a venture
capital fund for SMEs in disadvantaged communities; City Growth
Strategies (CGS) which put enterprise at the heart of inner city
regeneration and support for businesses in areas most affected
by Foot and Mouth Disease through the Rural Renewal Development
£96 million up to March 2004
BVMA: Currently involving around 900 mentors
Development Fund: 96 projects underway. Range
of outcomes so far including at least 418 new businesses created,
1557 existing businesses supported, 1599 jobs created/safeguarded
and 105 people helped to move off benefit.
CDFIs: 46 projects making £19.5 million
CGS: seven projects
RRF: 20 projects
Regional Selective Assistance (RSA) is a discretionary
grant which in England provides assistance towards projects with
fixed capital expenditure over £500,000 and which will create
or safeguard employment in the Assisted Areas.
The scheme has three overlapping objectives:
to create and safeguard jobs, to attract and retain inward investment
and to contribute to improving the competitiveness of disadvantaged
Details of programme
Both the applicant firm and the project should
have good prospects of commercial viability. Assistance must be
necessary for the project to go ahead on the basis proposed (additionality).
The project must be in the national and regional
economic interest. Where a project meets all the criteria, the
amount of assistance is negotiated as the minimum necessary to
enable the project to proceed.
Adverse effect on employment in other firms
is taken into account (Displacement). Service sector projects
that serve only a local market do not generally qualify for assistance.
In England, responsibility for cases of less
than £2 million grant has been transferred to the Regional
Development Agencies for appraisal and monitoring with effect
from 2 April 2002.
The scheme operates to common guidelines in
England, Scotland and Wales.
In 2001-02, expenditure in England was £98
million. The forecast for 2002-03 is £110 million.
Every £1 million of grant is expected to
attract fixed capital investment of around £10 million and
create/safeguard about 220 jobs.
5 July 2002