WIREDGOV

John Swinney today welcomed European approval for Scottish public sector bodies to have greater flexibility in providing support for business during the current downturn.

The Cabinet Secretary for Finance and Sustainable Growth said the Scottish Government had acted quickly and led the UK in applying to the EC to allow Scotland to take full advantage of the increased flexibility.

Ministers were delighted with the Commission's quick response and will work with public sector bodies across Scotland to coordinate the provision of grants under the new rules. Mr Swinney has written to COSLA to start that process.

Following a temporary relaxation in State aid rules, the EC has approved a scheme enabling public sector bodies to offer limited amounts of aid, up to a maximum of €500,000 for an individual business.

Mr Swinney said:

"This Government is doing everything it can to help Scottish businesses and households through the current downturn.

"We took the lead across the UK in submitting our case to the EC to allow the increased flexibility to apply in Scotland.

"I am delighted the response has been prompt and positive.

"This flexibility will allow us to take action across the public sector to help businesses which, although they have sound business plans and good prospects, find themselves cut off from financing due to the drying up of the lending market.

"Although it doesn't mean an increase in the budgets of existing grant schemes, it does mean we can target the finance we provide more effectively.

"This kind of action is central to our economic recovery programme and we will now work closely with partners such as the enterprise agencies and local authorities to ensure companies across Scotland can benefit to the maximum."

The European Commission has authorised, under the state aid rules of the EC Treaty, the first in a series of aid measures for businesses planned by the United Kingdom to deal with the current economic crisis. This measure enables limited amounts of aid to be granted in 2009 and 2010 to businesses in difficulty as a consequence of the crisis or facing funding problems because of the credit crunch, provided the conditions of the Framework are met. The scheme meets the conditions laid down in the Commission's Temporary Framework giving Member States additional possibilities for providing businesses with improved access to financing during the economic and financial crisis (see IP/08/1993). It is therefore compatible with Article 87(3)(b) of the EC Treaty, which permits aid intended to remedy a serious disturbance in the economy of a Member State.

Related Information

http://www.scotland.gov.uk/Topics/Business-Industry/support