Posts Tagged ‘Government’

SME’s to Recieve Financial Support From Government

Thursday, June 16th, 2011

Small and Medium sized enterprises (SME’s) are to be given access to a new range of government backed financial schemes which will allow access to a variety of loans and grants.

There will be initially two main UK-wide initatives, the Enterprise Finance Guarantee (EFG) scheme and Enterprise Capital Funds (ECFs), alongside a range of separate programs in England, Scotland, Wales and Northern Ireland.

ENTERPRISE FINANCE GUARANTEE SCHEME

EFG was set up by the former Labour government to encourage more bank lending to SMEs.
Under the scheme, the government guarantees 75% of an SME’s bank loan, with the lenders covering the remaining 25%.
It is open to companies with an annual turnover of up to £25m, and loans from £1,000 to £1m are available, repayable over 10 years.
Firms can seek to use EFG to access new loans, refinance existing loans, convert overdrafts into loans, gain a new overdraft or extend a current one, and cover cash flow shortages.
It is available for all sectors of the economy except the coal industry.
However, there are partial restrictions in the agriculture, financial, education, forestry, insurance, and transport sectors.
In November 2010, the coalition government announced that EFG would continue for the next four years, making about £2bn available.
It aims to help 6,000 SMEs each year access capital.
Companies seeking to gain an EFG-backed loan due so via their bank.
A guide to the full terms and conditions of the EFG scheme is available from the Department for Business website.

ENTERPRISE CAPITAL FUNDS

ECFs are government-backed venture capital funds that aim to invest in fast-growing SMEs.
Established in 2006, £150m of public funds have been invested in the scheme so far.
And the coalition government announced last month that a further £200m would be made available over the next four financial years.
Organised by government agency Capital for Enterprise, the government now invests in nine venture capital funds, having a stake of up to 67% in each fund.
It is to one of these funds that SMEs need to approach to make an application.
The current ECFs are: Amadeus Enterprise Fund, Catapult Growth Fund, Dawn ECF, IQ Capital Fund, MMC Ventures ECF, Oxford Technology ECF, Panoramic Growth Equity, Seraphim ECF and the Sustainable Technology Fund .
Although open to SMEs in most business sectors, it is typically hi-tech companies that make successful applications.
In exchange for a stake in their business, SMEs can access million of pounds worth of investment, typically over a 10-year period.
After that time, they have to pay back the funds plus interest.
Companies making the following products cannot seek ECF investment – synthetic fibres and yarns, motor vehicles, shipbuilding, steel, coal, agricultural and fisheries items.
Transportation firms are also ineligible.

OTHER ENGLISH SCHEMES

At the end of November the coalition government launched the Regional Growth Fund.
While available across the whole of England, it is specifically designed “to help those areas and communities that are currently dependent on the public sector make the transition to sustainable private sector-led growth and prosperity”.
So areas such as the North East are likely to be in the driving seat for successful bids.
A total of £1.4bn of funds – grants, loans and loan guarantees – will be available from 2011 to 2014.
The aim of the scheme is to support projects “with significant potential for creating long-term private sector led economic growth and employment”.
SMEs and larger companies will be able to apply on their own, or in partnership with other firms and/or public sector bodies.
The minimum bid threshold is £1m, and more information on the scheme – and how to apply – is available from the Regional Growth Fund page of the Department of Business website.
Local authorities also usually have grants available for small firms, as do the nine English regional development agencies, who can also advise on what European grants may be available.
However, the regional development agencies are to be abolished by March 2012 at the latest.
They will be replaced by a new Local Enterprise Partnerships, which will be partnerships between local authorities and business groups.
When established, these will take over the business support roles of the regional development agencies.
In addition, SMEs in England can get a full range of advice on what financial support is available to them by contacting Business Link – the government advice service for English companies.

OTHER SCOTTISH SCHEMES

For details on all the various finance schemes available in Scotland, the first port of call is Business Gateway, the Scottish government’s business support agency.
Specific initiatives in Scotland include innovation grants available from Scottish Enterprise.
And like in England, grants are also available from local authorities, and via European Union funds.
SMEs in the north of Scotland and its islands, should also contact the Highlands and Islands Enterprise.
This assists by investing in the development of strategic industries, product and market research, and in pilot projects.

WELSH SITUATION

In Wales, the Welsh Assembly Government itself takes the lead on business support matters.
The business support page of its website lists all the forms of government-backed grants and loans available for Welsh SMEs.
Further, its subsidiary body, the Welsh European Funding Office, offers in-depth advice on applying for European Union finance.
Local authorities across Wales can also provide details of what grant schemes they operate.

PICTURE IN NORTHERN IRELAND

Information on additional government-backed finance schemes in Northern Ireland is provided by Invest Northern Ireland, Northern Ireland’s regional economic development agency.
In addition to its own website, it operates nibusinessinfo – Northern Ireland’s online business advice service.

Tags: financial support, Government, grants, Loans, SME's
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Government Struggling to Recover £1.85bn in Benefits

Thursday, March 18th, 2010

The government has made overpayments to 1.6 million people through the benefits system and is struggling with debt recovery of £1.85bn that it is owed, a report from a committee of MPs concludes today.

Families on low incomes are being forced into debt to pay back the cash, the Commons spending committee said.

Some 50,000 people owe £5,000-£10,000, 23,000 owe £10,000-£20,000 and 8,600 owe more than £20,000 to the government after mistakes in the payments system.

The most common error is failure to reduce payments after claimants’ earnings increase but the scale of the inefficiency in the system is revealed by the fact that hundreds of thousands of people have experienced more than one mistake.

The report from the public accounts committee is released as the government receives an unexpected pre-election boost this morning as the number of people claiming unemployment benefit posted its biggest fall since 1997.

Ministers will today announce further work placements to help young people into a career.

The rising numbers of people indebted by the benefits system is a result of the government getting better at identifying where people have been overpaid – suggesting that millions has gone unaccounted for in the past.

While the amount of money reclaimed is also increasing, it is not keeping pace with the soaring level of debt identified. People are also increasingly struggling to repay the money in the recession.

In 2007-08 some £9.3m in small overpayments were written off because the amount was too small to spend the money retrieving the cash.

In contrast some 8,600 people face the most serious debts of over £20,000. Ministers are considering selling off some or all of the debt to the private sector, but the MPs on the committee warn that any sale should include safeguards for the welfare of vulnerable debt collection customers to avoid debt collectors or bailiffs cracking down on people who have been unwillingly overpaid.

The department does not have a reliable mechanism for assessing what level of debt recovery repayment people who have been overpaid can afford, leaving the process open to abuse, the report says.

Edward Leigh, the chair of the committee, said: “The current economic malaise is only likely to make worse the rate at which debt can be recovered.

“If the department is to deal with this rising trend in benefit debt, then it has to improve the way it approaches the prevention of debt. It should also review its procedures for validating claims for income support, a benefit which is particularly susceptible to big overpayments. It needs to set targets to reduce the debt owed by claimants with multiple and high-value debts, as well as targets for the difficult process of recovering money from claimants who regularly move on and off benefits.”

Theresa May, the shadow work and pensions secretary, said: “Labour need to get a grip. It is unforgivable that while taxpayers are tightening their belts the government is racking up more debt through poor administration. These figures are symptomatic of a benefits system that isn’t working.”

A DWP spokesperson said: “The report recognises that DWP’s debt management operations have improved, with recovery increasing from around £180m in 2005-06 to over £280m in 2008-09. Additionally 97% of the benefits paid out in 2008-09 were paid out correctly.

“Our new task force will address debtors who owe the department over £10,000 and we can take them to court if necessary. However, we accept that there is more we can do and so we will consider the committee’s recommendations carefully.”

Jim Knight, the employment minister, will today unveil the latest 7,000 jobs for 18-24-year-olds under the Future Jobs Fund, which pays employers up to £6,000 to take young people on. The new positions include jobs as sports coaches, youth workers, solar panel installers, and classroom assistants.

Tags: Benefits, debt collection, debt recovery, Government
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