Why Gov.UK funding goes to the big boys [JTSOS, May 2011]

[This came up in a discussion on Facebook in a friend's Wall, when it was pointed out that a large proportion of research and business development grant cash goes to big business. Originally posted on my Just This Side Of Sane blog on 2011/05/08.]

I'm not surprised that small enterprise doesn't apply for (or doesn't get granted) funding through these routes.

Firstly, the fund-matching criteria require an appropriate amount of liquid cash, whose expenditure must be carefully accounted for. Yes, there's the option of match-finding "in kind" through staff salaries etc. (where rules permit), but even that has bear traps. One friend who applied for such funding, and used his own (unpaid) labour as the funds match, discovered to his horror that he had to pay income tax and NI on the amounts he _hadn't_ paid himself in order to trigger release on the major tranche.

Secondly, the compliance régime can mean a lot of paperwork and effort. Fine when you've plenty of experience of what the funding body requires (as large concerns do); arduous and frustrating when you don't - and it ties up limited staff availability. And if an SMB hires someone experienced to help apply for and manage the funding*, the amount of funding that actually makes it to the project itself can make the game of raising it barely worth the candle. Big business doesn't have these problems. A large enough enterprise can retain someone permanent and experienced to deal with funding, streamline the process and the funding stream, and use its plentiful staffing to cover the funding matches.

It would be soooo nice if there was genuine Governmental effort to boost entrepreneurs and new enterprise, rather than lip-service, half-hearted follow-through, and an erratic drip feed of funding that's first in the list to be cut when times are tight. The only thing that'll pull the UK out of economic doldrums is SMB enterprise. Our present Government, and those that preceded it, talks the talk - and walks away.

(* Absolutely not trying to tread on anyone's toes, BTW. It's probably better to hire a funding consultant than not get any at all.)