Budget Boost For Innovation, Green Tech and Skills

24 04 2009

More details are emerging about the new £750m Strategic Investment Fund announced in this year’s Budget to support advanced industrial projects of strategic importance to the country and the economy. The Fund promises to focus investment on innovative and fast growing companies in sectors including biotech, clean energy and digital media.

A £250m allocation from this Fund will be earmarked for low-carbon investment, while the Technology Strategy Board will receive £50m and UK Trade & Investment, which supports UK businesses trading internationally, will get £10m. There will also be enhanced capital allowances for energy-saving and water-efficient (environmentally beneficial) technologies.

Strategic investment

Innovation and ‘green’ sectors of the economy were heralded as big winners in the 2009 Budget, with an additional £500m of spending announced as part of an overall £1.4bn package of targeted support to boost Britain’s low-carbon sectors.

NESTA (the National Endowment for Science, Technology and the Arts) welcomed the announcement on Budget Day. Its Chief Executive, Jonathan Kestenbaum, said: “Today the Government took a vital step on the road to recovery and the future looks a lot brighter for the UK’s entrepreneurs. The Fund will give a new vibrancy to the UK’s technology market and will bring about deep and lasting change to our economy.”

Science, Technology, Engineering and Maths-related (STEM) subjects in schools will benefit from a £2m investment to provide the knowledge and skills needed by some of the sectors where development will be concentrated thanks to new investments in innovation and strategically important technologies.

The NCGE already provides direct support for STEM entrepreneurs – for instance, through new FlyingStart Programmes for Engineers, with the Royal Academy of Engineering; Software Entrepreneurship and Online Business, last December with Microsoft and Agitavi Research; and now ‘Go WEST’ – Women in Engineering, Science and Technology. Candidates have until 15th May to apply for this event at the University of Surrey.

Support for business

The Budget saw a series of other measures introduced or extended to ease pressure on small businesses. Support for business in the current year looks fairly substantial. Chief among the measures is increasing to 40% tax relief to businesses on capital spending – for one year only. This scheme alone is forecast to cost the Treasury £1.64bn.

For loss-making companies, there will be the chance to reclaim taxes on profits made in the last three years until November 2010. A top-up trade credit insurance scheme will be introduced, which will match private sector trade credit insurance provision if insurers reduce their cover for businesses operating in the UK.

The total cost of deferring payments to HMRC through an extended Business Payment Support Service, the car scrappage scheme, improvements to venture capital investment schemes, and various other smaller initiatives is over £3.3bn.

Reacting to the budget on BBC Two’s Newsnight programme, Lord Karan Bilimoria, the Government’s National Champion for Graduate Entrepreneurship, said: “What we’ve got to do is encourage entrepreneurship, encourage enterprise. People forget the basics: that it is actually wealth creation and business that creates employment that pays the taxes that pay for public services.”





Universities Mobilise To Support Business and Entrepreneurs

16 04 2009

HEFCE and DIUS have said what money will be allocated to which HEIs from the Economic Challenge Investment Fund.

Standing Together provides contacts and practical examples.

Standing Together provides contacts and practical examples.

A total of 77 universities and colleges will offer between them £59,240,920 of match funding to help businesses and communities. The total amount of funding being made available by HEFCE to successful bidders is £27,572,834, with the remainder provided in the form of matching contributions from institutions and local partners.

The Economic Challenge Investment Fund opened for bids in January for its £27 million in match funding. It is designed to help institutions delivering short-term support between April 2009 and September 2010. The funding has enabled many institutions already actively engaged in entrepreneurship education, knowledge transfer and business support to boost their activities.

It’s just one part of an increasingly coordinated response by higher education institutions to the economic crisis, and enterprise and entrepreneurship are key features of many initiatives awarded funding and support.

Every university is now being challenged to be a ‘business facing university’ as Government and business look to the higher education to demonstrate how they can support the economy and their local communities.

“Demand for higher education usually grows during an economic downturn” says a useful new guide Standing Together – Universities helping business through the downturn. The guide gives names and contact details at 157 institutions and links to examples of schemes already supporting business and enterprise across the country.

Standing Together has been published by Universities UK, GuildHE and HEFCE, with support from DIUS, to provide examples of how HEIs are contributing to the effort to get British business back on track.

The recipient of the most Economic Challenge Fund money is the University of Cumbria, which will receive £1 million for its activities. Cumbria is one Northwest university with vibrant enterprise activity.

The University has in post an NCGE-NWDA Northwest Enterprise Champion, Jo Chaffer, who led a successful intensive three-day entrepreneurship course that launched a FlyingStart General Business Programme at the end of March for over 30 graduate entrepreneurs.

Other universities awarded nearly £1 million include Aston University in Birmingham, identified yesterday by the Work Foundation as the UK city hardest hit by unemployment. Its Pro Vice Chancellor for Business Partnerships and Knowledge Transfer, Dr Phil Extance, said: “We’re delighted to win this latest bid, which will enable us to increase the scope of two of our successful activities and to allow universities to help businesses tackle the difficult issues they face.

“Creating a further 104 Innovation Vouchers is excellent news as the previous round of vouchers, awarded under the INDEX project, was nearly three times oversubscribed. It indicates that there is a real demand for support for innovation even in the current difficult economic climate”

Next in the Economic Challenge list is the University of Derby, collaborating with four further education colleges – West Nottinghamshire College, Derby College, North Notts College and Chesterfield College. One key strand of Derby’s proposal is the University’s own Enterprise Scheme, which will be extended to currently excluded groups such as redundant professionals and graduates, or those at risk of unemployment.

There will be 20 incubator access grants and 12 enterprise bursaries offered to encourage new businesses to start up.

Derby’s Commercial Director Andrew Hartley, who helped shape the bid, said: “This support programme incorporates the strengths of individual partners and fills gaps in provision that have been identified with support from external agencies such as Job Centre Plus and Business Link. “The objective of this collaboration is to ensure that support is available at the point of need. Independent research commissioned by the University of Derby found that a lot of people individuals would like to access services at their local institution.

“This programme will therefore aim to offer co-ordinated services through both the University of Derby and a linked network of the emda-funded Higher Education Centres within further education colleges and local authority managed business/innovation centres across Derbyshire and Nottinghamshire.”

Derby is just one example of a university which actively supports graduate entrepreneurship. In March it hosted an NCGE FlyingStart Rally and Creative Careers Fair where GQ Editor Dylan Jones revealed how he graduated from Saint Martins School of Art during the recession of the early 1980s. He revealed it was a time of opportunity for entrepreneurs.

Speaking to over 120 potential small business owners, he said: “The economic downturn in the 1980s was one of the most creative periods,” he said. “People were starting record labels, magazines and nightclubs. There was a huge vacuum for cultural enterprises to fill. Therefore a creative groundswell took place.”

DIUS, HEFCE, Universities UK and the CBI, RDAs, the Business Link network, and many other regional and national bodies are investing great effort in working together with universities to help businesses and individuals. It’s time to showcase the great work taking place at HEIs and support opportunities for entrepreneurship.





Challenging Graduate Career Opportunities

28 01 2009

Graduates are facing a very tough jobs market. The ‘Class of 2009’ has already had to contend with gloomy predictions of a serious shortfall in the number of graduate jobs available when they finish their degrees this year. But it’s not all gloom and doom if you’re creative and entrepreneurial.

Some of the more entrepreneurial graduates in sectors where competition for jobs is fiercest are already taking defensive action to create their own start-ups. The NCGE’s Flying Start Programme for the Creative Industries, held in Bournemouth earlier this month, received over 100 applications for 33 places from as far north as Yorkshire.

Graduates chasing vacancies at the UK’s largest recruiters will find fewer opportunities on average. High Fliers Research, whose 14th January report – The Graduate Market in 2009 – surveyed 100 firms, found that recruitment targets have been cut by 17% for this year since the latest graduate recruitment round began in September 2008.

Last year graduate recruitment fell by 6.7% rather than rising by the 11.8% predicted by the recruiters themselves. Banking and finance were particularly badly hit. Skilled staff taken on by leading firms will drop by 7,000 to around 33,000 this year.

Mike Hill, Chief Executive of the Higher Education Careers Services Unit (HESCU) and Graduate Prospects, said recently: “Graduates should not panic. There are lots of jobs out there, but they will be harder to get because more people will be going for them.

“There are more jobs for graduates now than there were 10 years ago,” he added. It is also important, Mike recommends, for HR managers to take a long-term view when faced with current financial pressures. “When we emerge from this recession we will need all the talent we can muster.”

Some areas are bucking the trend, according to the High Fliers research report. There are now 51% more entry-level positions for graduates in the public sector and 17% more roles in the Armed Forces. Accountancy remains a strong prospect, preparing to offer 20.9% of all graduate jobs in 2009.

A BBC Briefing for concerned graduates listed seven top tips from HESCU and Graduate Prospects include:

  • Take advice
  • Broaden your horizons to related professions
  • Consider paid or unpaid work experience
  • Do not be too proud to use contacts to get a first break
  • Do not be too proud to take a job you think may be beneath you
  • Be imaginative

and

  • Consider setting up your own business.

Seasoned entrepreneur Sir David Tang has criticised global pessimism in the face of recession. In a recent opinion piece he recommended we shed negativity and think about finding solutions. He called on governments to force banks to lend to small businesses.

The Government is taking action on a number of fronts. In addition to its recent support package for small businesses, a new campaign – Science: So What? (So Everything) – launched today at 10 Downing Street underlines the continuing need for science, technology, engineering and maths subject areas among many graduate employers. Technology and innovation are seen as key drivers for economic recovery.

Meanwhile, Professor Dame Wendy Hall is spearheading another campaign by the Royal Academy of Engineering to attract more engineers from diverse backgrounds. She said: “The financial turmoil and the recession actually give us a huge opportunity to entice people who have studied engineering and science away from the City and back into innovating for the future, which is where they are badly needed.”

For those graduates among the 400,000 due to graduate this year who remain unemployed for more than six months, it has been reported that DIUS Minister John Denham is proposing paid three-month internships with leading firms and is inviting more of all sizes, and from the public and voluntary sectors, to take part. But details are still being worked out.

In the Government’s New Opportunities White Paper, it was also announced last week that a more streamlined package of support for those unemployed for six months or more pursuing self-employment is to be introduced.





Government Finance Boost For Businesses

14 01 2009

The Government has today launched an £11 billion package of support to address the cash flow, credit and capital needs of UK businesses. At its centre is a mechanism that will enable banks to refinance around £20 billion of debt due for repayment this year by medium sized companies.

This package of measures to provide stimulus and support to business puts into operation and builds upon commitments made in the Pre-Budget Report on 24 November.

It provides:

  • £75m capital (£50m from HMG and £25m from banks) fund to invest in businesses who need equity or quasi equity;
  • £1bn of guarantees supporting £1.3bn of lending to smaller businesses;
  • Up to £10bn of guarantees supporting £20bn of working capital.

Capital for Enterprise Fund

The Chancellor announced in the Pre-Budget Report a £50 million debt for equity fund. Government is announcing today that this Capital for Enterprise Fund will provide £75 million of equity, made up £50 million of Government funds and an additional £25 million from Barclays, HSBC, Lloyds TSB and RBS.

The purpose of the fund will be to provide equity and quasi equity of £250,000 to £2 million for companies under the EU SME definition, i.e. of turnover of up to €50 million, who have viable business models and growth potential in need of long term capital.

Enterprise Finance Guarantee

In the Pre-Budget Report, the Chancellor announced a £1 billion Small Business Finance Scheme. Today, this goes live as the Enterprise Finance Guarantee.

This 75% guarantee for loans will support bank lending, of three months to ten year maturity, to businesses with a turnover of up to £25 million who are currently not easily able to access the finance they need. This will enable them to secure loans of between £1,000 and £1 million through the government guarantee, available up to 31 March 2010.

The guarantee will be available through the following high street banks from today – Barclays, Clydesdale/Yorkshire Bank, HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank. It will become available from other lenders if they wish to apply.

Working Capital Scheme

The Government also announced in its Pre-Budget Report a working capital scheme for smaller exporters. Based on the risk analysis done since that announcement it believes that the model can be expanded for working capital guarantees for all firms of turnover of up to £500 million. So the Government is today ready to make available to banks guarantees of up to £10 billion for up to 50% of the working capital on a £20 billion portfolio of loans.

Banks are invited to submit their portfolio of existing and projected new or refinance loans for approval under the guarantee. We have received declarations of interest by Barclays, HSBC, Lloyds TSB and RBS. With the support of participating banks, we hope the first £1 billion guarantee tranche of the scheme should be operational by 1 March. Use of this facility will of course be subject to final terms guaranteeing value for money.

By guaranteeing portfolios of working capital facilities, this package will release capital held by the banks against these portfolios.  The banks have agreed they will make commitments to re-deploy this capital in order to increase all types of lending above their current plans, to businesses with a turnover of less than £500 m. The guarantee will ensure banks do not reduce or withdraw working capital lines on renewal which, being short term, can be easy to cut. It will also ensure that there is new capacity by banks to lend to UK businesses, who are suffering from the withdrawal of certain lenders from the market.

Information on all this support can be accessed via a dedicated web portal at www.businesslink.gov.uk/realhelp. This provides details including contact names and numbers for each bank and for the local Business Link. To register interest for the Capital For Enterprise Fund, businesses should call 0845 459 9780.

Additional options are being explored to provide further backing.

Time to Pay

As announced in the Pre-Budget Report, since last November, businesses experiencing cash flow difficulties can also get help from the HM Revenue & Customs (HMRC) Business Support Service.  Businesses worried about being able to meet tax, National Insurance, VAT or other payments owed or coming due to HMRC can call the Business Payment Support Line, seven days a week, on 0845 302 1435.

HMRC staff will review temporary options tailored to the business needs, such as arranging for payments to be made over a longer period. HMRC will not charge additional late payment surcharges on payments included in the arrangement, although interest will continue to be payable on those taxes where it applies.  This is one more way in which Government is providing real help for businesses to manage their cashflow and free up working capital they need.

Credit Insurance

The Government is committed to targeted support for businesses to help them through the current economic climate. Reduction of credit insurance can exacerbate financial difficulties already being felt by firms, so BERR is discussing with trade credit insurance providers a government scheme to help companies affected by reductions in their credit insurance. There will be a further announcement on this as it progresses.

BERR Minister Lord Mandelson said: “The Government will continue to support and provide funding and capital to the bank system to ensure that banks are able to support businesses.

“Small businesses are the lifeblood of the economy – employing  60% of the private sector workforce and contributing over 50% of UK turnover.   We remain committed to doing everything we can to help them through the current economic difficulties.”