Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 71: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the steps she is taking to support small businesses; and if she will make a statement on the matter. [13185/09]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context

My Department's continuous support for enterprises arises through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, FÁS and the County and City Enterprise Boards. The significant allocations in my Department's Estimates for 2009, will ensure that we continue to build on this strategy for the future.

Enterprise Ireland (EI) is the agency with responsibility for supporting the development of Irish companies with ambitions to grow in world markets. Many of its client companies are small to medium in size. Enterprise Ireland recognises the varied challenges facing such companies in the context of the changing economic environment and partners with companies with a wide range of supports to address their needs in a holistic manner.

In addition to EI, the 35 County and City Enterprise Boards provide support to micro-enterprises with 10 employees or less. The role of the CEBs is to provide support for micro-enterprises in the start-up and expansion phases, to promote and develop indigenous micro-enterprise potential and to stimulate economic activity and entrepreneurship at local level. The CEBs can support individuals, firms and community groups provided that the proposed projects have the capacity to achieve commercial viability. The CEBs deliver a series of Programmes to underpin this role and they can provide both financial and non-financial assistance to a project promoter.

FÁS through their One Step Up programme is encouraging employees to increase their competency levels and promoting an ethos of lifelong learning in the workplace. Its key intervention in this regard is the Competency Development Programme. It offers workers different types of training programmes directed at various skill levels across major economic sectors. These training programmes are available to employees of SMEs. FÁS also have a number of other training programmes aimed at upskilling SME's namely, Skillnets and FÁS Strategic Alliance programme. The Government has also made very considerable progress on the implementation of the Small Business Forum Report's recommendations. This progress is reflected through a substantial package of financial measures and schemes introduced to assist the sector over recent years, including fiscal measures in the 2007, 2008 and 2009 Finance Acts.

My Department is also committed to reducing the administrative burden on Irish business by 25%, or €500 million per annum, by the end of 2012. The new Companies Consolidation Bill, will radically overhaul company law in Ireland and consolidate the existing thirteen Companies Acts into one, will result in a further reduction in red tape and costs for business and will improve Ireland's competitive position as a location for business investment.

In dealing with the difficulties within the banking sector, the Government focus has been on securing a stable and active banking system to serve the needs of the wider economy. The Bank Guarantee Scheme, the nationalization of Anglo Irish Bank and the Recapitalisation Scheme are all intended to ensure that the financial institutions can actively contribute to our economic activity and particularly support our enterprise sector. A key principle of the Recapitalisation Package is the recognition of the importance of business lending particularly in relation to SMEs. SMEs are central to our economy and the provision of bank credit to the sector is a primary target of the overall package. The package contains a range of initiatives that will directly assist our enterprise sector, including the following:

The recapitalised banks have committed to increasing their lending capacity to SMEs by 10% over 2008. This should ensure that sound businesses will receive support from their banks.

A €100m environmental and clean energy innovation fund is also being established by each bank as well as a further €15m each to new or existing seed capital funds. Much of this funding will flow to small and medium enterprises.

SMEs are also covered by the Code of Conduct on Business Lending to SMEs which was also part of the Recapitalisation Scheme. This Code was published by the Financial Regulator on Friday 13 February 2009 and came into effect from 13 March 2009.

The recapitalised banks have also agreed to pay for and co-operate with the carrying out of an Independent Review of Bank Lending to SMEs, to be completed in the next few weeks. The purpose of the review is to ascertain the position on credit availability to SMEs here and to recommend appropriate action to improve credit availability taking account of the Credit Institutions (Financial Support) Scheme 2008.

Allied Irish Bank, Bank of Ireland and Ulster Bank will also provide funding for SMEs on foot of a €300m facility provided by the European Investment Bank and announced last week. This funding should be available over the coming weeks. The banks have undertaken public campaigns to actively promote their lending to SMEs. Recent Press and TV advertisements together with information sessions with businesses are evidence of the banks' commitments in this regard. As part of the Recapitalisation Package, my Department remains in regular contact with the Department of Finance and will ensure that issues such as the availability of credit to SMEs are kept under constant review.

The Government is also taking a number of other new initiatives to support business, particularly SMEs. On 5 March 2009 the Taoiseach announced the establishment of an Enterprise Stabilisation Fund to support viable but vulnerable exporting companies. The Taoiseach also announced the Government was introducing, on an administrative basis, a commitment to reduce the payment period by central Government Departments from 30 to 15 days; and that an assessment would be completed by end-April of the impact of extending this arrangement to the local authority, health and education sectors

My colleague John Gormley, T.D., the Minister for Environment, Heritage and Local Government is also overseeing each County Council in their moves to establish "Business Support Units" to act as a point of contact to ensure quick, co-ordinated responses to businesses when dealing with local authorities.

SMEs are central to our economic development and the comprehensive range of measures and supports in place will continue to help the sector adapt to the current economic climate. The services provided by the development agencies are kept under review and will be adjusted to respond to the current economic situation. The general administrative efficiencies will form part of Government's considerations on the Supplementary Budget to be announced on 7 April. It would not be appropriate for me to provide details of projected savings in my Department's Vote as a result of general administrative efficiencies in advance of the Supplementary Budget.