Invest NI responds to criticism over business funds

SDLP Councillor Rory Farrell.
SDLP Councillor Rory Farrell.

Invest NI has responded to claims levelled by SDLP Councillor Rory Farrell that Derry and Strabane was being “short-changed” due to methods of calculating funding support for new businesses.

The NI Business Start Up Programme operates across the north to support the establishment of new businesses and the creation of jobs, funded by the EU, Invest NI and local councils. Colr. Farrell said.

He added that Invest NI developed the formula used to determine funding for each council area and claimed that Derry City & Strabane received the third lowest level of support of all 11 councils.

“Derry City and Strabane is being shortchanged by Invest NI,” he claimed. “We have the highest rate of unemployment of all 11 councils across the North and that is not reflected in funding support for new businesses.

“There is a government approved jobs target for this programme, but Invest NI’s method of calculation arrives at a lower figure. This results in a reduced level of financial support for mentoring and business case development. We get less money than we need to deliver the programme and local ratepayers must step in to fund the £9,000 shortfall as the government target must be achieved. The cost to ratepayers is relatively small, but Invest NI’s calculation method is applied to a range of business programmes so these costs can escalate quickly.”

During a recent committee meeting the SDLP proposed that the local Council challenge Invest NI on its level of support for businesses in Derry and Strabane, and Colr. Farrell said he was “happy that our proposal was accepted”.

A spokesperson for Invest NI however said the money allocated for the Business Start Up programme was actually agreed among the councils themselves.

“Following the transfer of functions responsibility and associated transfer of functions budget, which took place as part of the reform of local government in 2015, responsibility for the provision of support to local business start-ups rests with councils, rather than Invest NI,” a spokesperson said, adding: “As a result of local government reform, each individual council was allocated a specific Programme for Government target for local start-ups by the Department for the Economy (DfE). The LED Measure of the EU Investment for Growth & Jobs (EUIGJ) Programme 2014 -2020 is a separate funding source, unrelated to the Transfer of Functions budget. It aims to support an increase in employment in small and micro businesses through a range of business development and entrepreneurship support (i.e. growth of existing businesses and start-ups). The funding is administered by Invest NI on behalf of DfE and is only available to councils. The nominal allocation of funding available to individual councils under this LED Measure was initially communicated to councils in 2014 by the then Department of Enterprise, Trade & Investment and is based on a combination of the small and micro business base and the working age population within individual council areas.

“The NI Business Start-Up Programme (NIBSUP) is an 11 Council Collaborative Programme. Invest NI has provided ERDF (LED Measure) and baseline funding to Lisburn & Castlereagh City Council as the lead Council in this NI wide Collaborative Programme. In addition to collaborating in the NIBSUP, Derry City & Strabane District Council (DCSDC) submitted two applications to Invest NI for support under the ERDF LED Measure. Both applications were successful and council was awarded £1.06m funding, the highest level of funding secured to date by an individual council.”