Environmental grants for business well behind schedule

Companies applying for grants under two official schemes to promote new environmental technologies and improved environmental management practices have been turned away since February because the money has run out, a parliamentary answer by Trade and Industry Minister Patrick McLoughlin has revealed.1 But with only two months of their initial three-year periods left to run barely half the money promised by the Government has been spent, and only 4% of firms applying for a grant have received one.

The schemes were launched in October 1990. One, the Environmental Technology Innovation Scheme (ETIS), is intended to sponsor research into cleaner production processes and improved recycling, waste treatment and monitoring techniques. The second, the Environmental Management Options Scheme (DEMOS), is aimed at promoting the spread of good environmental management practices and uptake of cleaner technologies.

Grants of up to 50% of eligible project costs are available under both schemes. In October 1990, the Government promised that o12 million would be made available under ETIS, and o4 million under DEMOS, for a three-year period. Around 100 projects were expected to be sponsored under ETIS alone during that time.

Neither scheme appears to be fulfilling these expectations. Figures released by Mr McLoughlin show that only 49 grants totalling o8.55 million have been awarded under both schemes - amounting to just over half the sum pledged in 1990 (see table ). Another o5.4 million has been awarded under EUROENVIRON, a separate scheme initiated by the EC to promote environmental research projects involving businesses from more than one country.

The Minister's reply also reveals that companies are having to wait a considerable time for decisions on grant applications. Average decision times are 11.5 months under ETIS and 12.4 months under DEMOS. Under EUROENVIRON, in contrast, applicants have to wait only 4.3 months.

Application success rates also vary markedly between the schemes. Only 2.8% of grant applications under DEMOS have succeeded to date, while the figure for ETIS is 6.1%. For EUROENVIRON, however, it is 31%.

It remains to be seen whether anything like the o16 million grant-aid promised in 1990 will in fact be awarded by the end of September, when the schemes' initial phase ends. The chances of this do not seem bright even if all of the remaining o7.5 million is still available. Between mid-February, when figures were last published, and the end of July only six ETIS grants were awarded.

Seventeen applications have been received under ETIS and DEMOS since February, but the firms concerned appear to have no chance of obtaining grants unless the schemes are renewed. According to Mr McLoughlin, new applicants have been told since February that "projects already under assessment are expected to take up the remaining resources of each scheme."

Whether the schemes will in fact be extended, and if so with what resources at their disposal, is extremely uncertain because of the current squeeze on public expenditure. A decision is expected within the next few weeks.

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