Paudie Coffey (Waterford, Fine Gael)
Link to this: Individually | In context

Question 246: To ask the Minister for Jobs, Enterprise and Innovation his plans to review direct financial assistance grants for small businesses funded from city and county enterprise boards; if he will make the criteria more flexible in order that jobs in small and medium enterprises can be sustained and secured; and if he will make a statement on the matter. [34584/11]

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

The County and City Enterprise Boards (CEBs) provide support for micro-enterprises in the start-up and expansion phases. The CEBs deliver a range of tailored programmes and supports through the provision of both financial assistance and non-financial assistance.

The forms of direct financial assistance available from a CEB are;

· Priming Grant (payable up to 50% of the investment or €80,000 whichever is the lesser), available to micro-enterprises for business start-ups within the first 18 months of start-up. This can cover all business costs directly attributable to starting a new business (save payments to State Bodies).

· Business Expansion/Development Grant (payable up to 50% of the investment or €80,000 whichever is the lesser), available to micro-enterprises to grow and develop the micro-enterprise. This can cover all business costs directly attributable to growing and developing a business (save payments to State Bodies).

· Feasibility/Innovation Grant (payable up to €20,000 or 50% (S&E region)/60% (BMW region) of the investment, whichever is the lesser), available to micro-enterprises to assist with the cost of necessary pre-start up studies carried out for the purposes of assessing market interest in/demand for a proposed new product or service, the appropriateness of the associated funding plans, the general viability and sustainability of the venture and assistance with innovation.

The most recent review of the direct financial assistance available from the CEBs was conducted in January 2010. At that stage the CEB existing financial supports had been in place since 1993. As a result of the 2010 review grant limits were raised and the range of business costs for which eligible micro-enterprises could seek grant support were broadened. This has allowed for greater flexibility in supporting the micro-enterprise sector whilst remaining within EU limits on provision of state aids.

The criteria under which funding is available from the CEBs is based on the following factors;

· the enterprise must be in the commercial sphere;

· the enterprise must demonstrate a market for the product/service;

· the enterprise must have a capacity for growth and new job creation;

· the enterprise must not employ more than 10 people;

· the enterprise must not give rise to deadweight or displacement.

Within the above eligibility criteria there are certain necessary priorities and restrictions, in particular, priority must be given to micro-enterprises in the manufacturing or internationally traded services sector which over time can develop into strong export entities and graduate to the Enterprise Ireland Portfolio and, due to the need to consider the issues of deadweight and displacement, it is generally considered inappropriate to support enterprises such as retail enterprises, personal services and professional services.

In addition to direct financial assistance the CEBs also provide non-financial assistance such as business advisory and information services, management capability training and development programmes, e-Commerce training initiatives etc. These soft supports also contribute positively to the policy objective of building an enterprise culture which, in time, may result in job creation without direct financial assistance from the State.

I am satisfied that the current forms of financial support available from the CEBs, and the criteria within which these supports are available, are appropriate to the needs of the micro-enterprise sector and are targeted at enterprises with growth potential which can, over time, develop into strong export entities where they have sufficient mass to access the services of Enterprise Ireland and which can in the long-term maximise State investment in this sector.