Select Committee on Work and Pensions Minutes of Evidence

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 Fund (RRF).


  £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 available

  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 areas.

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.

Outcome measures

  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

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