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CUT IN RURAL BUDGET WILL HIT BUSINESS SUPPORT

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The government's decision to set up a Local Challenge Fund for Business Links, announced yesterday, will mean that ...
The government's decision to set up a Local Challenge Fund for Business Links, announced yesterday, will mean that the Rural Development Commission's budget for business support services will be cut by around £1.3m over the next three years.

The commission currently provides business services to small rural firms in Rural Development Areas, covering the neediest one-third of England.

Lord Shuttleworth, chairman of the commission, commented, 'I am very disappointed that the government has proceeded with its proposal to cut our services in order to help finance the new Local Challenge Fund. The commission's objection to any cut in its budget for this purpose received strong support from rural businesses and organisations during the recent consultation exercise.

'This cut, though somewhat less than originally proposed, coming on top of planned cuts in our business services from £3.7m this year to £1.7m in 1999/2000, necessitated by budgetary pressures, will largely eliminate our services. The onus will be increasingly on Business Links to give adequate priority to the needs of rural firms and provide services in ways geared to rural circumstances.'

'We are pleased, however, to see that as a result of the representations of the commission and others, the guidance for the new Local Challenge Fund will reserve the commission's financial contribution for the best bids from partnerships in Rural Development Areas, provide for the commission to be represented on the Bid Assessment Panels, and require monitoring of the extent to which winning bids address rural needs.'

Lord Shuttleworth added, 'It is some consolation, though, that rural safeguards are being built into the operations of the new challenge fund and we will work constructively to ensure that Rural Development Areas receive their share of the benefits. However our view remains that the most effective way of targeting our resources on small firms in those areas would have been by leaving file commission's services untouched.'

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