Western development campaigners have condemned proposals to reduce the level of direct grants available to small businesses through county enterprise boards.
New guidelines to the enterprise boards reduce capital grants from 50 per cent to 35 per cent of the cost in the Border Midlands and West (BMW) region and to 30 per cent in the rest of the State.
Employment grants can only be given "in exceptional circumstances where it can be demonstrated that labour shortages do not exist", and the rate is being cut from £5,000 per job to £3,500 in the BMW region and to £3,000 elsewhere.
The Council for the West said the move went against the point of keeping Objective 1 status for the disadvantaged region. By allowing the BMW region to retain Objective 1 status, the EU agreed to total grants of up to 55 per cent for small businesses there, compared with 27.5 to 30 per cent in the eastern and southern regions. This differential is seen as crucial in encouraging businesses to locate in the west.
A spokeswoman at the Department of Enterprise, Trade and Employment said these changes only applied to "micro-enterprises" employing fewer than 10 people, which get support from the enterprise boards. The grant levels agreed with the EU, favouring the west, would apply to all aid given by the IDA and Enterprise Ireland.