Small firms 'hit by £1m fund limit'

A planned regional growth fund is leading to concern about the impact on small businesses some of whom are already struggling to get funding from the banks.
By The Newsroom
Published 5th Nov 2010, 10:17 BST
Updated 5th Nov 2010, 10:17 BST

Shadow Business Secretary John Denham said: "There are huge problems for individual small businesses in applying for the fund not least you can't apply for less than a million pounds.

"Lots of businesses don't have a turnover of 1m, and who – while from an regional development agency might have got relatively modest funding – will be able to get nothing."

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But a spokeswoman for the Department of Business, Innovation and Skills said the threshold was set to ensure it was "not spread too thinly across the country and has a real and evident impact".

"It does not rule out smaller projects, which should be presented as a coherent package, collectively meeting the needs of local economic strategies, or that could be managed through investment bodies operating Regional Growth Fund programmes."

Quizzing Mr Osborne yesterday, Leeds East MP George Mudie

said slashing spending on regional economic development from 4.2bn over three years to the 1.4bn allocated to the regional growth fund will mean

only 17m-a-year for areas like the Leeds City Region when Yorkshire Forward is abolished and new Local Enterprise Partnerships are operating.

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