Grants affect the way
companies invest. As much as 50% of mechanical engineering
SME investment in
areas such as R&D, training, IT and machinery would
not take place without grants according to the Engineering
and Machinery Alliance (EAMA) in a report on the industry’s
views and use of grants.
Some of the companies’ biggest criticisms of the
grants’ regime are targeted at the complexity of
the system and the consultancy business that has grown
up because it is seen as so complicated.
In its May Budget report Government
expressed concern “at
all levels that the proliferation of business support schemes
has created a complex picture making it difficult and time
consuming for businesses to access relevant support.”
EAMA’s findings indicate where some of these problems
may lie. While most firms think that applying for grants
is too complex, six in ten companies say that they aren’t
well informed about grants and only just over a third see
themselves as successful in making applications.
However, firms in the West Midlands are of a different
view. Nearly two-thirds of companies there say that they
are well informed, seven in ten that they are successful.
“This is well above the average scores amongst all
firms applying,” says EAMA chairman Graham Hayes, “and
seems to indicate that the agencies in the West Midlands
are more successful in their communications with SMEs on
Accounting for four in ten contacts across the country,
Business Link is the agency most commonly contacted for
grants, rising in the regions to eight in ten of all contacts
in the East of England RDA and by company size to over
seven in ten amongst micro firms (i.e. those employing
ten or less).
Just over two-fifths of companies applying for grants
use a consultant. However, only 13% thought the money well
spent. A third of all applicants and half of all well informed
This may be because while over a third
of consultants take four per cent or less, approaching
another third charge
20-29% of the grant for their services (typically £5k
ion a £25k grant).
Business Link and Manufacturing Advisory Service both
enjoy a positive reputation, well ahead of
other agencies including UKTI, RDAs and the EU. However,
even in their case a fifth of respondents rate them negatively,
indicating as with the other agencies that delivery across
the country is erratic.
Six in ten firms had applied for a
grant in the last ten years, with a third applying on
average every two or three
years. A majority of firms (53%) had applied in 2005. However,
four in ten firms in the East of England had last tried
for a grant five of more years ago, and half the firms
in the South East hadn’t made an application for
three or more.
The report has some good news for the
government and its attempts to promote innovation. Overall,
the largest number of applications, followed by training,
exporting and investment in machinery, with some variation
in preferences according to the size of the company involved.
Micro firms sought marketing support
including exporting first (50%), followed by R&D (25%). Nearly four in
ten small firms focused R&D and training followed by
investment in machinery, while the top choice for medium
sized companies (employing 50-249) was training (24%),
with close to a fifth applying under each of the R&D,
exporting and IT investment categories.
Few firms think that they are in a
good region for grants (17%). Many think they are not
(38%) and 45% don’t
know. There were sufficient replies to compare the standing
of six of England’s nine regions on this measure.
None were rated positively overall. Even companies that
are successful in applying tend to think that their region
isn’t good for grants or don’t know.
Opinion generally is equally divided
(27% agree/disagree) about whether grants offered in
other regions threaten ‘my’ competitiveness,
with micro and medium sized companies generally less concerned
about it than small firms. However, firms actually applying
for grants think that they do (36% vs. 27%).
The full report “Grants – Perception and Use
of the UK Regime” can be down loaded from the EAMA
website under publications at www.eama.info
The survey fieldwork took place in November/December 2005.
Over 90% of the replies came from SME firms. A quarter
of the firms were based in London and the South East.
Notes to Editors:
- Companies in
seven of EAMA’s now eight member associations
took part : British Automation and Robot Association
(BARA), British Paper Machinery Suppliers Association
(BPMSA), British Turned Part Manufacturers Association
(BTMA), Gauge and Toolmakers Association (GTMA), Manufacturing
Technologies Association (MTA), Printing, Papermaking
and Converting Suppliers Association (PICON), Processing
and Packaging Machinery Association (PPMA). British
Plastics Federation (BPF) were not members at the time.
- Graham Hayes
(photo available on request) was elected EAMA chairman
in 2004. He is chairman of Bradman Lake the British
packaging machinery manufacturers.