News

March 2002

Headlines

Regional Selective Assistance and Enterprise Grant

Fundamental changes to RSA in Scotland

Commission to Impose New Restrictions on State Aid for Large Projects

New EU Fisheries Grants Scheme for England

Freight Facilities Grant

EU Processing & Marketing Grant launched

UK Assisted Areas Map

Regional Selective Assistance and Enterprise Grant

The recent relaxation of the European Commission's state aid guidelines has resulted in changes to RSA assessment policy.

It is now acceptable for certain intangibles, such as the acquisition of technological know how, to be considered as eligible expenditure.

Further, although grants are normally calculated as a proportion of capital investment, there could be situations where the appraising officer may allow two years wages of new jobs to be the basis of calculation instead of CAPEX.

Responsibility for applications of less than £2 million is being transferred from Regional Government offices to the Regional Development Agencies.

With regard to the Enterprise Grant Scheme, responsibility for assessment has been transferred to the Small Business Service. As with RSA, in some situations, it may be acceptable to capitalise new jobs for the basis of grant calculation.

Commission to Impose New Restrictions on State Aid for Large Projects

The European Commission have announced that, as from 1st January 2004, the limits on capital state aids will be tightened. The deadline for the automobile and synthetic fibres sector will come into force on 1st January 2003.

There will be no reduction of the current aid intensity limits for projects of up to €50 million. For projects costing €50 - €100 million, only 50% of the regional state aid ceiling will be permitted and, for those over €100 million, 34%.

Fundamental changes to RSA in Scotland

The Scottish Executive have announced far reaching changes to the capital grants system. The overall objective is to direct funding to high-tech businesses in recognition of a lessening of demand by the large inward investors. Basically:

* the system will be streamlined for grant applications up to £250K
* the cost of "intangibles" such as "know how" and patents, may be added to CAPEX for the purposes of grant calculation
* instead of using CAPEX as the basis for RSA calculation, it will be permissable to use total salaries of new high quality jobs for a 2-year period
* a new £20 million venture capital fund will be created
* Assisted Areas remain unchanged

New EU Fisheries Grants Scheme for England

Details of the New EU Fisheries Grants Scheme for England have been released by MAFF. These comprise specific schemes for:

modernisation of fishing vessels protection and development of aquatic resources
improvement of fishing port facilities
processing and marketing of fishery and aquaculture products
product promotion
collective projects by members of the trade
innovative projects, demonstration trials, etc

Each of the above initiatives have their own eligibility requirements.

As the budget for the 3-year period 2001-2004 is only £6 million, only the best projects will have a chance of receiving an award.

There are separate schemes for the Objective 1 Regions of Cornwall and Merseyside. The level of award and funding available for these regions will be more generous than elsewhere.

For a preliminary discussion on grant eligibility call: Tony Reid on 0131 225 8451 or email edinburg.office@eurofi.co.uk

Freight Facilities Grant

Following the approval of the Transport Act 2000, there has been a major change to the Inland Waterways Freight Facilities Grant (FFG) scheme.

This now makes Short Sea Journeys eligible. This term includes passage to the Continent and therefore opens up the possibility for FFG awards where the construction of a new terminal could lead to shorter freight journeys by road.

The European Commission have not yet approved this amendment to a state aid but applications are currently being assessed by DETR Freight Grants Unit.

Full details of the FFG schemes are available on request.

EU Processing & Marketing Grant launched

After a break of over four years the EU Processing & Marketing Grant (PMG) has been reinstated in England.

This scheme relates to processors of agricultural produce and offers grants for improving facilities to help farmers become more competitive and to add value to their produce.

The level is normally at 30% of total costs (ie for new buildings, refurbishment's and new equipment). The minimum size of investment is £70,000 and the maximum grant is £1.2 million. The scheme is open to processors of any size although priority will be given to SMEs.

To be eligible, the primary products must be sourced within the EU. Applicants must demonstrate that the grant is necessary for the proposed project to proceed.

Special conditions apply in the EU Objective 1 regions (Merseyside, Cornwall and South Yorkshire) where the level of grant award will be higher.

Applications must be assessed by local MAFF offices each of which will have established their own priorities.

As only about £44 million in total will be available for the scheme in England over the period 2000-2006, the annual budget will not be particularly generous. Organisations with eligible projects are therefore advised to submit their applications without delay.

Similar arrangements will be made in Scotland, Wales & Northern Ireland.

Applications for PMG support should be based on a carefully considered strategic plan. Eurofi are able to advise applicants on all aspects and especially on making the "additionality" argument.

UK Assisted Area Map

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