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Officials: grant schemes 'eclectic, experimental'

Katherine Rich MP
National Party Economic Development spokeswoman
21 April 2006

Officials say grant schemes ‘eclectic, experimental’

Astonishing criticism of the Government’s much-vaunted business assistance schemes is contained in official papers on the Government’s spending review, says National Economic Development spokeswoman Katherine Rich.

The Treasury papers say: ‘we believe there are opportunities to improve value for money as the approach to date has been experimental and eclectic in the face of uncertainty about the role for the government and the most effective solution. This has led to a large number of different programmes that have, in many cases, lacked a sound rationale or specification of outcomes…’

The papers also reveal officials are suggesting that the resources put into business grants be shifted from ‘general and sector-specific economic and regional development programmes to support R&D and innovation directly’.

“These papers confirm National’s concerns that the performance of programmes is not being adequately measured,” says Mrs Rich.

“ ‘Eclectic and experimental’ might be an apt description for a CD collection, but to describe Labour’s collection of business help schemes in such a way is damning.

“These programmes cost tens of millions annually, so the investment on behalf of taxpayers should deliberate and considered.

“Labour launched these programmes, so it can hardly blame National. For officials to describe them as ‘eclectic and experimental’ six years after they were introduced is simply not good enough.

“Treasury is now suggesting a massive shift in strategy, from economic development to direct support for R&D and innovation. This strongly suggests evidence of the success of the programmes is scant.

“There would also be problems shifting support to research and development. R&D is not a silver bullet. While R&D is very important, many firms are not of the size to be able to undertake it. We need to be aware of these limitations.

“Firms would be enhanced by addressing issues such as tax, employment and other regulations,” says Mrs Rich.


Attached: Page from officials report on business assistance programmes

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