26/05/2009 FOSTER ANNOUNCES £15MILLION SCHEME TO HELP BUSINESSES
Enterprise Minister Arlene Foster today announced a £15million scheme by Invest NI, to help businesses currently in difficulty to retain key skills.
Under Invest Northern Ireland’s Short Term Aid Scheme, qualifying businesses in the manufacturing and tradable services sectors will be able to receive support of up to approximately £450,000 at current exchange rates, enabling them to retain key staff while they plan and restructure for the future. To be eligible, a firm in difficulty will need to demonstrate a need for support and the actions already taken, or proposed to take, to address its difficulties.
Announcing the scheme to the NI Assembly, the Minister, said: “It is clear that many businesses are currently experiencing a short term reduction in demand for their products or services. This is resulting in company finances being squeezed and causing, what would otherwise be viable, businesses to experience financial difficulties.
“To help these businesses to prepare for the upturn when it comes, it is important that the Executive provides the most effective and efficient support. A key element of this will be to ensure that businesses retain and, where possible, enhance their skills base.
“The scheme I have announced today will do just that. Through Invest NI, eligible businesses that are experiencing short term difficulties will be able to obtain grants for salaries to maintain key skilled posts in their workforce. These will be at a rate of 80% for small companies, 70% for medium sized enterprises and 60% for large companies.
“The support will allow businesses to undertake a range of approved activities, including Further and Higher Education training, in-house upskilling, in-house infrastructure improvements or introducing improved management or financial control systems. Additionally, the ability to second employees to another business in order to help the latter improve its capability will also be eligible.
“To further encourage businesses to grow their exports, employees with key skills undertaking market research or developing new leads in new markets, will also be eligible under the scheme to have their salary, travel and subsistence costs covered at the appropriate rate.”
Arlene Foster continued: “This new scheme will provide crucial and invaluable support to businesses which may otherwise have to make key employees redundant, resulting in valuable skills and knowledge being lost and therefore, not readily available when economic recovery occurs.”
The scheme, which opens on 1 June 2009, is available to eligible large companies and SMEs in the manufacturing and tradable service sectors which were not in difficulty prior to July 2008 and which, although fundamentally viable, are experiencing short term difficulties.
The Minister added: “In addition to supporting training costs and avoiding the need for businesses to potentially incur redundancy costs, there are wider benefits which will accrue. These include the potential for business to generate profits arising from the activities of the maintained posts and save potential future recruitment costs when markets improve.
“This initiative is over and above what the Government and the Executive have already established, what the Banks have so far announced and complements other support mechanisms recently introduced by Invest NI to help local business navigate through the current downturn.”
NOTES TO EDITORS:
1. Invest NI Scheme Summary
Scheme Objective
The objective of Invest NI’s scheme is to provide eligible businesses with financial assistance that will enable them to plan and, where necessary, restructure for the future, retaining key staff so they are ready to take advantage of an economic upturn.
2. Scheme Background
In January 2009 the UK, through DBERR, notified to the Commission an umbrella scheme (under para 4.2.2 of the temporary framework ie providing up to EUR 500,000 to business as a small amount of compatible aid) for up to £1billion to support UK businesses during the period February 2009 to 31 December 2010. This specifically notified measure is designed to address the potential damage to the local economy through the possible loss of fundamentally viable companies as a result of the global financial crisis.
Following approval of the UK measure by the Commission, it is up to each UK region to develop their own proposals to meet the specific needs of their regions.
Invest NI has developed the Short Term Aid Scheme announced today as best meeting the needs of local business and has allocated budget of £15million for this programme (£7million 2009/10 and £8million 2010/11).
3. Business Eligibility
Open to those companies in the manufacturing and tradable services sectors who were not in difficulty at 1July 2008 but are in difficulty now, and who currently meet the following criteria or who have the potential to meet this criteria by 3 December 2010:
(a) Have total sales of over £100,000 per annum;
(b) Have sales outside of NI greater than 25% of turnover,
or greater than £250,000 per annum; and,
4. Scheme Outline
Grant support for agreed key posts by letter of offer, paid in arrears, based on eligible salary costs (travel / subsistence costs may also be eligible when certain activities outside the workplace are undertaken).
Eligible businesses to apply by application form to Invest NI.
Three rates of grant support – 80% for small companies, 70% for medium sized enterprises and 60% for large companies.
To be eligible for assistance, a Company in difficulty must demonstrate (i) need for support, and (ii) actions it has taken to date to address its difficulties.
Only fundamentally viable businesses will be supported and no business that was in difficulty prior to 1July 2008 is eligible.
No dividend payments or increases in Directors Remuneration during the period of support are permissible.
No employee pay rises or additional bonus payments (including those linked to pay) during the period of support are permissible – only in instances where previously agreed contractual obligations exist with employees will this rule not be applied.
Support provided to give the company the opportunity to plan and restructure for its future growth (e.g. Sales, Marketing, Management, Finance, Training, HR).
Spend incurred in any claim period that is not claimed within 2 months of the end of that claim period is lost and cannot be rolled forward.
Maximum support per business is 500k Euro, (approximately £450,000 at current exchange rates) less other de-minimis aid offered in the period 1 January 2008 to 31December 2010. Costs incurred beyond 31December 2010 are not eligible for support.
11.For media enquiries please contact the DETI Press Office, telephone 028 9052 9297. Out of office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.
Filed under: Credit Crunch
