3.6.1 To measure the additionality of Smart/GRD projects (i.e. the extent to which they represent activities that would not have happened without the support of the schemes), award winners were asked whether their projects would have gone ahead if they had not received an award; and, if so, whether it would have been affected in terms of timing, scale or scope.. Table 3.28 shows that 70% of award winners said their project would not have gone ahead without Smart/GRD funding and only 15%
said that their projects would definitely or probably have gone head if they had not received an award. The tendency for award winners to say that their projects would definitely or probably have gone ahead anyway did not vary much according to type of award, company size or scheme. However, firms undertaking feasibility projects were more likely than other firms to say that their projects would definitely not or probably not have gone ahead; and firms with development projects were less likely than others to say so.
Table 3.28 Would your project have gone ahead if you had not received an award?
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/
excep
1-9 10-49 50+ Smart GRD
Definitely 5 3 5 6 5 6 4 4 6
Probably 10 16 9 8 9 14 15 9 11 Possibly 15 13 11 23 13 20 25 13 19 Probably not 30 35 28 31 30 30 32 31 27 Definitely not 40 33 47 31 43 30 24 42 36 Effective Sample Size 454 76 231 153 323 92 18 267 209 A number is shown in bold where, taking into account the margin of error due to sampling, we are 95%
certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q28A)
3.6.2 Some projects (ie 15%) might have gone ahead anyway without awards, but this does not necessarily mean that they would have gone ahead completely unchanged.
Table 3.29 illustrates this point by indicating what the lack of an award would have meant for the timing, scale or scope of projects that definitely, probably or possibly would have gone ahead. It shows that the very large majority of projects that might have gone ahead would have happened later than they actually did (ie 85% of those that might have gone ahead anyway), and/or that large minorities of projects would have been smaller (40% of projects that would have gone ahead anyway) and/or narrower in scope (38%). These businesses represent relatively small proportions of all businesses.
Table 3.29 (If project would definitely, probably or possibly have gone ahead) In what way or ways, if any, would the project have differed?
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/
excep
1-9 10-49 50+ Smart GRD
The project would have happened:
Sooner 1 0 2 0 1 0 0 0 2
Later 85 87 81 91 86 85 73 81 90
at the same time 14 13 18 9 13 15 27 19 8 Effective Sample Size 152 46 57 58 103 35 9 73 85 The project would have been:
Larger 1 2 2 0 2 0 0 1 2
Smaller 40 38 30 54 44 37 18 34 48 no different 59 60 68 46 54 63 82 65 50 Effective Sample Size 152 46 57 58 103 35 9 73 85 The scope of the project would have been:
Broader 3 2 6 0 3 3 0 2 4
Narrower 38 33 28 53 43 32 18 32 46 no different 59 65 66 47 53 65 82 65 51 Effective Sample Size 150 46 57 58 104 35 9 73 85 A number is shown in bold where, taking into account the margin of error due to sampling, we are 95%
certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q28B3)
3.6.3 In combination, Table 3.28 and Table 3.29 imply that a large majority of projects were wholly additional (i.e. would not have happened in an way, shape or form without an award), as shown in Table 3.28 (ie 70% would definitely or probably not gone ahead), and that very few projects were wholly non-additional (i.e. would have gone ahead anyway and would also have been completely unchanged). The average additionality figure attributable for employment impact is shown in paragraph 7.2.2. Table 3.30 is derived from the previous two tables and it summarises the additionality associated with awards. It shows that, taking all awards together, 96% led to wholly or partly additional projects. Awards for development projects, those to companies in the 50+
employee size band, and GRD awards were associated with less additionality than others, but they largely additional.
Table 3.30 Summary of additionality of projects
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/
excep
1-9 10-49 50+ Smart GRD
Wholly additional 70 68 75 62 73 60 56 73 63 Partly additional 26 28 20 35 23 34 32 22 34 Wholly non-additional 4 4 5 3 4 6 12 5 3
3.6.4 Those companies that gave responses that suggested their projects were wholly non-additional or were only partly non-additional (ie they would have potentially gone ahead in some fomr) were asked how they would have financed their projects, and their answer are shown in Table 3.31. Most frequently, these companies said that they would have financed their projects using a bank loan, but it will be recalled from Table 3.18 and Table 3.19 that most applications for bank loans as an alternative to a Smart/GRD award, in the first instance, were unsuccessful. Indeed, the search for alternative finance (to GRD) of any kind tended to be unsuccessful, and this suggests that the firms who say they may have gone ahead anyway may not have been able to do so and that the estimates of project additionality in Table 3.30 are not unduly generous.
Table 3.31 What types of finance would you have used for your project, if you had not received GRD award and gone ahead with your project?
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/
excep
1-9 10-49 50+ Smart GRD
Bank loan 19 25 13 21 17 22 28 18 19 Money from family / friends 9 8 10 7 10 7 0 7 10 Venture capital finance equity 8 2 14 4 11 1 0 7 9 Other RDA / public sector grants 8 5 12 5 9 3 0 4 12 Other businesses: equity 6 6 3 10 4 10 14 6 6 Business angel finance: equity 4 4 8 0 6 0 0 3 6 Business angel finance: loan 4 3 6 3 6 0 0 1 8 Bank overdraft 3 3 0 6 1 9 0 4 2 Hire purchase / lease finance 2 0 0 4 1 3 0 1 2 Other businesses: loan 2 1 0 5 3 2 0 1 4 Venture capital finance loan 2 2 2 3 3 1 0 1 4 Bank loan with Small Firms Loan
Guarantee 1 1 2 0 0 3 0 1 1
Trade credit (from suppliers /
customers) 1 0 0 2 1 0 0 1 0
Other(s) 31 35 39 21 33 24 43 37 24 None of the above 24 21 22 29 22 26 33 25 23 Effective Sample Size 159 55 56 61 109 36 9 75 94 Respondents could select more than one option; so percentages in any column may sum to more than 100 A number is shown in bold where, taking into account the margin of error due to sampling, we are 95%
certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q29A)