Plea to look again at axed 'hidden' grants

MILLIONS of pounds worth of grants to help businesses create and protect jobs in poorer areas will be lost thanks to government cutbacks, it has been claimed.

The ConDem ruling alliance has axed Grants for Business Investment (GBI) as part of its huge programme to slash public spending.

But the move has been branded as a mistake by campaigners who want the grants to stay.

Businesses across Yorkshire have benefited from the grants, including West Yorkshire firms GD Hanson (90,000), Life Structures GB (190,000) and Howarth Environmental (88,000).

The Industrial Communities Alliance, which represents local authorities in traditional industrial areas, says the decision to end the grants is wrong.

In a statement, the Alliance said: "Most of the money from the scheme went to support manufacturing industry, a sector which the government is trying to bolster to decrease Britain's dependency on financial services and the public sector.

"The withdrawal of the scheme mainly hits companies in the Midlands and North of England, when the government says it wants to get away from its reliance on the South East economy."

The Alliance says the axing of the grants was "hidden in the detail of the Government's Local Growth White Paper".

It says that 428 million of funding was made between 2004-2010, creating 77,000 jobs.

Chair of the Industrial Communities Alliance, Coun Eion Watts, said: "At a time when businesses in our areas are struggling, the loss of this vital tool has come as a great blow.

"Since the 1970s successive governments have seen the need to create and protect jobs in the less prosperous regions.

"We, in the Alliance, believe the government should revisit their decision to abolish this scheme. It is a vital piece of kit in the regeneration toolbox, and firms in our areas will suffer without it."

The Alliance believes that abolition of the GBI scheme will undermine local regeneration schemes, hit the weakest economies the hardest, damage the manufacturing sector most and weaken private sector job creation. It says that other schemes introduced by the government, such as the Regional Growth Fund, provide less targeted funding and are not suitable replacements.

yep.businessdesk@ypn.co.uk