Second victim falls prey to axed HCI programme

Just two weeks after the defunct Home Computing Initiative (HCI) claimed its first victim, a second HCI provider has fallen prey to the government's decision to abolish the scheme.

HCI consultancy Encompass HCI is closing down. This follows the demise of HCI VAR RedPC, which entered into voluntary liquidation, as revealed exclusively by CRN earlier this month (CRN 10 April).

Greg Tibbles, managing director of Encompass HCI, told CRN: "I'm voluntarily making the business dormant. As a small company solely involved in providing HCI, I was completely knocked back by the Chancellor's decision. The government's Digital Strategy sets targets for 2008 so I thought the HCI scheme would run until then, and at the very least we would have 12 months notice. To be given 15 days is appalling."

Tibbles, who founded Encompass in February 2005, has laid off his five members of staff and said he will lose about £40,000.

The government axed the tax-break PC scheme in March’s budget, giving channel players just 15 days' notice of the closure. Although the Chancellor has invited the Confederation of British Industry (CBI) to submit proposals for a new programme free from abuse, Tibbles said he couldn't afford to "sit around and wait for another scheme to emerge".

The Conservative Party have launched a campaign to save HCI and will continue to lobby the government while the decision passes through the Finance Bill. All Budget announcements have to be considered through the Finance Bill before they can become law.

Conservative MP Mark Francois, who is the shadow paymaster general, told CRN: "It is a shame to hear that another firm has gone under because of the Chancellor's decision. We begin debating the Finance Bill this week and we'll be pressing the government to reverse its decision."

A CBI representative said: "The government not only made the wrong decision in scrapping the HCI, it also went about it in the wrong way, giving firms almost zero notice of its demise."

However a Treasury representative told CRN: "Our first priority must always be to protect taxpayers' money and stop any abuse at the earliest opportunity. That is why this scheme was closed down."

laura_hailstone@vnu.co.uk