Coalition plan sidelines firms

THE coalition's Regional Growth Fund is the latest example of a headline- grabbing policy initiative that has forgotten those which need it most. It does not take too much digging to reveal this latest recession-busting idea from Westminster will fail to help the very lifeblood of the economy – small businesses.

Take the allocation of funds. Bids have to be at least 1m – more than the annual turnover of many small businesses, particularly those located in the countryside – even though this initiative is only meant to subsidise projects rather than pay for them outright.

How many small firms are going to be launching multi-million pound projects in the midst of the worst economic crisis in decades? The vast majority are grateful to have survived this far. They are not in a position to advance aggressive expansion plans.

The policy also states that it will support those ideas with "significant potential for economic growth" – how will this help skilled tradesman who were made redundant by bigger firms, and are now looking to set up as independent electricians or plumbers? Will it be able to support the village shop or town centre cafe?

David Cameron said that entrepreneurs were to be at the heart of the recovery. However, he forgets that many people will need thousands of pounds in support, not millions.

All incoming governments are full of grand ideas, desperate to show they can offer a radically different approach. The previous regime had the grand plan of regional development agencies – organisations that polarised opinion, and which were swiftly abolished.

Nevertheless, small businesses were able to access money from Yorkshire Forward without needing to come up with a seven-figure project, a key point that the coalition appears to have overlooked.

Conversely, this latest policy flaw emerged as the Prime Minister announced plans to create a hi-tech hub in the UK to rival California's Silicon Valley.

Such epic ideas are needed – they offer a brief glimpse of hope in the dark gloom that is the age of austerity, the cuts and the job losses – but most people would welcome a more realistic policy focused on creating jobs in local communities rather than grand platitutdes.