£25m will be used to fund small firms

Liam Scollan could well afford to play the buttons into the small hours in a Dublin hotel late last week

Liam Scollan could well afford to play the buttons into the small hours in a Dublin hotel late last week. The chief executive of the Western Development Commission, who is more than accomplished at the accordion, had finally received confirmation of the long-promised £25 million in Exchequer funding.

The fund will be lodged for use as seed capital - providing long-term loans and equity investment to a small number of strategically important projects in seven western counties. It will also support business and community development on a similar basis.

It isn't an enormous amount of money, and breaks down into £2 million this year, and £5 million in the next two years, with a promise of more to come.

Mr Scollan, who worked for 12 years in England on a similar initiative, is still confident of its potential. "During my time in Britain, I was creating 1,000 jobs a year in a place the size of Cork. It is all about creating the right environment, and building confidence."

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He emphasises it will not replace existing funding coming into the west, but aims to nurture private investment.

"Existing agencies like the IDA, Forbairt, Udaras na Gaeltachta and Shannon Development are working away, but there are anomalies which prevent some initiatives from receiving assistance," Mr Scollan says.

"You take a small company employing less than 10 people, for instance. It is too small for most national equity funds available, and too big for a county enterprise board budget fund. We want to work with the State agencies on these anomalies."

The commission will continue to press for greater levels of investment by the other agencies in the west, as its chairman, Mr Sean Tighe, pointed out last week when he welcomed the Government's announcement. Draft legislation to place it on a statutory basis is to be published shortly, according to the Minister of State for Agriculture and Food, with responsibility for Rural Development, Mr Noel Davern..

Mr Scollan sees it as the "first real sign of a practical Government commitment to favouring investment in the west," at a time when the campaign to ring-fence the west as an Objective One region for EU funding is gathering steam. Earlier last week, the Council for the West - a separate lobby group - published a report to highlight the economic disparities and press the Objective One status case. After all, if regions in other member-states can do it - like Merseyside, the Scottish Highlands and the Hainault region of Belgium - why not here also?

The report says that the west has a GDP level of 64.4 per cent of the European average, while the Border region is at 71.7 per cent and the midlands 66.1 per cent. If the three regions are grouped together, the average GDP is 68 per cent - well below the EU's 75 per cent cut-off point. The overall national average is 92 per cent of European GDP.