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ICA calls for simplification of initiatives

The Institute of Chartered Accountants of England and Wales has called on the Government not to launch any more initiatives targeted at small firm financing and instead concentrate on making existing schemes work.

The Entrepreneurship policy paper argues that Chancellor Gordon Brown should delay the launch of his American-inspired small business investment companies (SBIC).

These vehicles, expected to be announced in the Chancellor's pre-Budget report in December, will come with government guarantees designed to encourage the private sector to take equity stakes worth between £250,000 and £3m in companies that are aiming to expand.

But the institute argues that the initiative will add another layer of complexity to the already well-served small company finance market, leading to what Clive Lewis, head of SME issues, described as the "finance knowledge gap". "There is a good system in place but the system is not being used in the way that it was intended and we want to focus on making it work more effectively," said Mr Lewis.

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