SMEs asked to withdraw from grant scheme

A report in The Times claims that hundreds of new companies who applied for a 'flagship Government grant scheme' have been asked to withdraw their applications because there is not enough money to fund them.

Ministers had encouraged entrepreneurs to apply to the Grant for Research and Development scheme, launched a year ago to encourage small businesses to carry out research and development that leads to 'technologically innovative products and processes'.

However, The Times reports that the DTI's Small Business Service has written to company owners suggesting they look elsewhere for funding and has asked applicants to confirm, in writing, that they will withdraw their bid.

The letter says: "We can only support a small proportion of these (applications) . . . it may be that you feel it appropriate to withdraw your application to seek funding from other sources.

The move has met criticism from the Opposition who accused the Chancellor and DTI Secretary of State, Patricia Hewitt, of using fine words on the floor of the House to capture headlines and then acting in precisely the opposite way.

The DTI denied that it was preventing people from applying for the scheme, suggesting that as the closing date for the first round had passed, 'it might be more realistic for people who need funding sooner to go elsewhere'.

Full article, Times: SMES pressed to quit grant scheme