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“Barcelona… I had this perfect dream.” So sang Freddie Mercury, and when Freddie sang people listened. Conjuring up romantic visions of this historic city, his song was an epic, memorable one.

Now no-one’s going to say that outsourcing your IT is romantic. But it can be epic. And quite frankly, Barcelona really is the perfect dream if you’ve been on the receiving end of a long and laborious offshoring project, not to mention all the flights.

There’s nowhere quite like Barcelona. This beautiful city is not only a popular tourist destination and a great place to live, it’s also a thriving place to do business. It’s a bustling blend of culture and commerce with a Mediterranean twist.

This isn’t just talk either. Statistics show that Barcelona has been voted the top European city for quality of life, in the top three best-known cities in Europe and the top five places to do business. It’s in the top three for qualified staff, telecommunications, external transport links and cost of staff. All impressive stuff.

So what’s my point? Well, as companies have started to realise the associated risks with offshoring, near shoring is becoming an increasingly popular way to outsource IT projects. And Barcelona is the European hotspot for outsourcing.

People are one of the main considerations when you’re looking to move a project abroad. And there’s no denying that traditional offshoring has offered a mass of talent and willing workers. But it’s also key to have a workforce that’s consistent and knowledgeable, key to have a workforce that’s on your wavelength and on your doorstep. With a culture and education system similar to the UK, you’ll find it easy to put your points across and discover a shared approach to your working practices. Your complex projects demand a flexible workforce, and you’ll be able to easily find the right people for your business. With lower staff turnover, greater retention of talent and unrivalled domain knowledge, Barcelona wins hands down on the people factor.

Cultural differences can also come into play. Traditional offshoring countries like India take a different approach to IT personnel, and it’s common for technical staff to become managers after about five years. In Spain, you are much more likely to find technical staff with 15+ years’ experience who are able to bring their expertise and knowhow to your project.

Barcelona traditionally boasts a highly skilled workforce with good levels of English and other European languages. So nothing gets lost in translation. It also has a culture of transparency, so you’ll be informed straight away if there are any problems or issues, giving you the chance to deal with them before they have the chance to escalate.

A beautiful city with a business brain. Next time you think offshore, think near shore. Next time you think near shore, think Barcelona.

Speaking about offshoring with a few of our SME members recently, they were telling me that for smaller companies, offshoring manufacturing isn’t quite as attractive as it used to be.

It’s not just rising travel costs and international political turbulence proving a turn-off. Total cost of offshoring (TCOf) is on the rise - small firms, doing small runs, are probably better off manufacturing locally or near-shoring.

Traditionally, long distance offshoring was all about labour arbitrage - nowadays, with rising inflation in popular offshore destinations like India and China, the cost of doing business abroad has skyrocketed. Not only that: the costs of supplier management are escalating too.

One SME MD was telling me that even if offshore labour was free, then it would still be more expensive to offshore purely because of the ever-increasing overheads. But its horses for courses, if you can achieve the economies of scale to reduce unit costs low enough, then offshoring might still be for you.

The overhead situation isn’t nearly so tight for the big boys: major brands who are shifting enough units to necessitate the big production runs where offshoring come into its own. Although, in the face of the rising costs of doing business in India and China, many companies are thinking about seeking out cheaper, non-traditional destinations such as Kenya or Argentina.

But moving destination is not without risk. There are always operational risks in managing the transition. As well as cultural fit, there are both systematic / IP issues.

There may be problems with releasing or using intellectual property such as the software solutions that all offshoring, not just ITO, could not happen without. If service delivery is dependent on supplier proprietary software, ensure there are appropriate contingency arrangements on exit. Procuring a suitable solution, dovetailing it with existing systems, and training people to use it present both operational and financial risk.

But those organisations who are hungry for risk - and the associated rewards - will continue to go for it.

Recent research suggests that offshoring is set to drop off after 2016. Hackett Group Chief Research Officer Michel Janssen says: "That trend is going to continue to hit us hard in the short-term. But after the offshoring spike driven by the Great Recession in 2009, the well is clearly beginning to dry up. A decade from now the landscape will have fundamentally changed, and the flow of business services jobs to India and other low-cost countries will have ceased."

That comment seems far-fetched to me. As long as it’s cheaper, companies doing the requisite volume will pack up their processes and head offshore in search of new partners.

But for smaller companies, highly complex manufacturing or even call centres, the UK is a sagacious choice right now. Local-sourcing and nearshoring, as I advised the SMEs members, is their best outsourcing option in 2012.

In a flattened world, companies that effectively leverage the global delivery model stand to gain in several areas, ranging from cost advantages to access to talent to the ability to innovate rapidly.

However, outsourcing to another entity in another country where the culture, legal framework, language and commercial contexts are very different from one’s own, tends to increase the perception of the risks. While distance makes the heart grow fonder, it does make the risks seem larger. Partner selection and how you engage with the partner are the two fundamental aspects of managing outsourcing risks.

Traditionally, assessments of partner capability, size, financial stability, track record, references and perceived ease of working together were the criteria for choosing a partner; while in-house capabilities and confidence in the partner were prime factors in determining the model of outsourcing. The assumption was that if the partner was stable and had the ability to deliver, then the programme risk will be the aggregate of the individual project risks and that these can be tackled in a tactical manner.

While this model has its merits, it can tend to distort the decision criteria, leading to an uneasy relationship that become an increasing burden for both parties. Therefore, I believe that the time has come to rewire the decision making process along these lines:

1. Strategic Position: What is the industry in which you operate? Are you in a crowded market place looking to eke out a few basis points of profit over competition, or are you in the rather nice position of being able to command premium pricing due to your differentiated offerings? The truth, usually, is somewhere in the middle. Based on your competitive position, choose your partner.

If most of your business is commoditised and you are looking for some cost leadership, then go with a partner who can bring in efficiencies (over and above cost arbitrage). Structure your contracts in a manner that improves your costs year on year, in an aggressive manner – but think of partner risks in terms of the ability of the partner to recover from project or programme crashes and deliver.

However, if your competitive position does not demand focus on costs as much as building for the future, then you can choose partner(s) with track records that showcase greater capability to deliver innovative solutions, rather than their capability to reduce costs.

2. Your Learning Needs: Are you an organisation that needs to learn to continuously to retain market position? Are you in a place where you are constantly under threat from competition’s innovation? How much of your IT needs to be in step with the business in learning and innovating? Again, the answer these questions not only determine your partner selection, but also the extent to which you are willing to outsource and the commercial model of engagement.

3. Recoverability: How quickly can you recover from a bad choice of partner or engagement? While legal protections should exist, they can neither guarantee successful execution nor can they ensure that things can be recovered without significant impact on business. Evaluate your eventual dependence on the partner – and the costs of having critical internal knowledge outside your organisation. Calibrate your engagement model accordingly.

4. Depth of Partner Management: While it is definitely an ego-boost to have the CEO or senior executives of your partner company promising to be available to you for any issues, explore if there are people on the ground empowered to take decisions. Try to gain an understanding of the organisation structure and see if the people who are immediately above the partner people in your engagement are capable and empowered.

5. Your Roadmap: Do you have a technology roadmap laid out? Is your enterprise architecture in place? If so, look for partners who have made a commitment to the technologies that are part of your roadmap and your enterprise architecture choice. If you have, for example, chosen J2EE as your basic technology, then there is little merit in choosing a partner who has a significantly larger number of people and investments on the Microsoft Technology Stack.

There you have it, the five factors that are very relevant and will help minimise the risks of offshoring.

In my last blog I discussed EDI and digital signature EU legislation compliance within the European economic zone. Whilst both EDI and digital signatures can provide compliance, I reminded everyone of the importance of ensuring that your e-Invoicing solution takes into account all the varying legal requirements in different countries.

In this blog, we will examine the differing levels of complexity involved in setting up EDI and digital signatures, and in the process of exchanging e-Invoices across each.

EDI has traditionally been the consensual method of e-Invoicing. EDI is renowned for being an industrial strength solution, capable of processing tens of thousands of electronic documents in a day so it is no surprise that this method was first used by larger companies. However, the strength of EDI is no longer the domain of large multinational corporations, and now small and medium-size enterprises have EDI solutions tailored for their needs.

There are three main types of network communications methods that EDI is traditionally implemented through: an EDI Network, Virtual Private Network (VPN) or point-to-point using a secure internet connection such as AS2. Most businesses choose to use an EDI network from a major provider because setting up the different communications methods requires careful attention to detail. For example, you must consider your company’s data processing capabilities as well as your commercial business needs. In most cases, interchange agreements are signed between the different partners in the trading relationship and the success of the EDI solution will ultimately depend on the quality of the software, the network and the support that the vendor provides.

Digital signatures have some degree of complexity involved in the exchange of documentation, but are less intensive to set-up. All that is required to set up digital signatures is a private key, public key and digital certificate. The only real challenge is obtaining and installing the certificate to sign invoice data securely. When exchanging documents, tax administrations often favour local Certificate Authorities (CAs) as an encryption method although stricter administrations may require fully qualified digital certificates with Secure Signature Creation Devices (SSCDs). The advantage of digital signatures over EDI is that they are flexible enough to be sent over a multitude of communications methods, including the internet, and they do not require a specific agreement between trading parties.

Implementing EDI or digital signatures does have complexity, therefore solution providers offer outsourced managed services that will remove this complexity for your business. From your company’s perspective, you will need to decide on which method benefits you best, both in the short and long term and whether you want to manage the complexity yourselves. You can learn more about all aspects of e-Invoicing at www.einvoicingbasics.co.uk.

As companies struggle through the current austere times, many are investing in processes that will be cost-effective and beneficial in the long-term. Modern outsourcing relationships now offer and deliver much more than just cost savings. Businesses are often transformed through innovation to achieve far greater efficiency and productivity.

Innovation is perhaps the most mis-interpreted term in outsourcing. It seems everyone wants a slice of the pie, but many are unsure of what the pie actually consists of..

It is extremely hard to narrow down one definition of innovation in outsourcing. One man’s innovation is another man’s day-to-day activity.

Innovation can be both incremental and radical and does not simply have to be continuous improvement. Innovation can be new ideas or ways of working to drive commercial gain or competitive advantage. It is does not have to applicable to all service provider relationships. For example no innovation expectations may exist for smaller or commodity relationships.

There has been much talk about the development of an innovation framework. To date, thinking has been that this framework is comprised of two distinct areas:

1) The hygiene factors for innovation: essentially the processes, the way in which a problem is approached, which can be included in contracts.

2) The governance structures, which are used to manage and progress innovation. The innovation management process itself provides the operational governance framework and a structured approach to fast track projects through idea generation and selection, development, confirmation of sponsorship and business case validation and on into hand-over to project delivery and tracking of benefits realisation.

On the other hand, many believe that innovation shouldn’t be put into a framework and ‘managed’ as it should naturally evolve from a partnership. Regardless of your position, a modern outsourcing relationship should help a business to innovate - whether metrics are set from the start or organically produced as a product of the relationship. However a framework can assist outsourcing partners to determine their objectives and formalise the innovation achieved. Developing metrics will also help to share the results and prove the worth of outsourcing-led innovation.

There is bound to be a certain amount of controversy over the harmonisation of Internet data directives between countries. However, cooperation between the EU and the US is becoming not just more important, but increasingly less controversial as time goes on. The agreement for terrorist suspects to be handed over to the US is to be applauded. However, the controversy in Europe carries on as Internet retailers continue to claim that enacting the new legislation will burden their customers with too many requests for permission and that they will lose valuable data if people refuse to be tracked. However an examination of the legislation reveals that the US could learn much from the application of Internet law in Europe.

It is under the circumstances that Varonis Systems welcomes the news that a common set of privacy standards are to be applied to organisations across the entire European Union for the first time - as well as the gameplan that includes immediate notification of breaches and other ‘data misplacements’. This is the first significant update of data protection legislation since 1995, therefore it is well overdue. The measures are being finalized within the European commission, so some of the fine detail is still to be revealed and they will have to be approved by the national governments. Some, particularly Germany, will be reluctant to lose out on privacy matters to Brussels, so it will likely take two to four years before the measures come into effect.

Despite the economic problems which made international headlines in the last few months, Europe remains a vital market for North American companies. It is a staging post for the Middle Eastern and African markets and London is still one of the most important financial capitals in the world. The United Kingdom coalition government has led the way in fiscal probity for Europe. However, Europe does have a habit of making things difficult for itself and the new laws have been viewed by some as falling into this category.

The proposals are designed to significantly increase the EU's powers to punish those who allow major data breaches to occur or who sell customer data to third parties without authorization. They also aim to further protect information held by social networks and cloud computing services. Organisations will have 24 hours to notify the data protection authorities and the affected parties in cases where private data has been compromised. By making sure that the rules apply also to foreign groups’ European subsidiaries, the new rules will force global companies to strengthen their data protection policies. All companies with more than 250 employees will have to have dedicated staff to deal with data protection issues. The rules will give the EU similar powers and policing privacy to those it wields in competition matters – where it can impose fines of up to 10% of turnover for violations.

In a teleconference last week between members of the European Commission in Brussels and the US Department of Commerce in Washington, EC vice president Vivian Reding suggested that the US copy the EU's approach - one which could imply a heavier hand. Reding said that the aim of meetings between the commercial regulators for the two governments was nothing short of “regulatory convergence” — suggesting that they should come to an agreement on the language of the respective laws governing how ISPs and content providers handle personal data protection. She said that it's up to Washington to catch up with the “gold standard” that Europe has already set. So while Europe and Washington battle it out about the respective effects of the US Patriot Act 2001 and adequate levels of protection for European data and American data centers, US organizations doing business in Europe will have to establish mechanisms to comply with this new law.

So, should we be horrified by European bureaucracy or beat the drum for watertight data protection? In our opinion the new rules are an excellent balance between the very real data privacy needs of citizens against the practical issues of managing data within the modern corporate environment.

Many IT security professionals have expressed concerns about the technical problems associated with managing, protecting and auditing access to their growing data stores. While these concerns are understandable, the reality is that with the correct technology in place these issues can easily be solved.

The US EU Safe Harbor program has been created as a way for US companies to comply with the EU data protection directive. This program allows companies which are certified with the Safe Harbour principles to process EU personal data even though the US has not met the EU's privacy protection adequacy standards. The Safe Harbour principles reflect the seven fundamental principles laid out in the EU data protection directive. They are 1) notice 2) opt out choice 3) restriction on onward transfer 4) security of data protection 5) preservation of data integrity 6) individual’s right to access and 7) effective enforcement.

Many organizations have been struggling with non-existent or limited permissions management, classification, and auditing capabilities included with their data stores, but new metadata framework technologies can provide intelligence, automation, and control across multiple platforms to allow C-level executives to sleep easy.

Surely we do not need the threat of legislation to ensure that we remain compliant? Sensitive information should only be accessible to those that absolutely require access. But just how many companies actually have the security procedures in place to enable this to happen? Not many is the truth. What happens in practice is that many IT departments face significant challenges keeping authorization up to date – making sure the right users are in the right groups and the right groups map to the right data resources, like folders, sites, and mailboxes. This is essential as users move through an organisation, changing roles, requiring access to more and more data. Unless the processes to grant, review, analyse, and revoke access are automated, content is automatically inspected to look for sensitive data, and access is monitored and analysed, the organization will be unable to maintain correct authorization, and unable to monitor access activity to look for likely threats.

The problem of the rise in unstructured data, i.e. the data which is increasing dramatically in everyone's corporate network, is one which has to be faced head-on. As far as unstructured data is concerned, the introduction of a single set of privacy standards for all EU territories is long overdue. The fact that this will be a complex migration for some multinationals — and those firms who are pushing into new countries for the first time — is one which we should see as a welcome opportunity and not a dreaded challenge.

The key issue in the new rules is the requirement that any company maintaining personal information – be that customer records, internal human resources directories or any other list – will have to comply with the new rules, and be able to show how and why they are using personal data. This is something which is a service to the customer anyway, and should already be in place in any well-organized company. Another controversial aspect of this legislation is the “right to be forgotten” which means that companies cannot just keep information they have finished with, and have no legitimate right to use any more, in their infrastructure on pain of being heavily fined.

This highlights the difference between US data laws and European data laws. While data protection requirements in the US, according to a September 2011 Forrester Research, Inc. report, (“Q & A: EU privacy regulations” written by Chenxi Wang, Ph.D) "...are commonly industry-centric those in the EU focus more on the individual's right to privacy. This leads to a number of differences in how data should be handled in the EU versus the US, especially in transferring data between countries with varying regulatory standards."

There have been some fears expressed that the planned five per cent turnover penalties are too high. While a two per cent maximum will please many industry onlookers, it will still act as a very positive deterrent for any company thinking they can simply hope for the best with their existing data protection systems.

The new regulations’ mandate for the appointment of a data protection officer will help focus the attention of many more companies on what has become a major issue in this digital age - and help ensure that the vast majority of firms do a lot more than simply pay lip service to the new regulations.

The application of the rules to non-EU entities – especially those in the US – that want to offer their goods and services in the EU is to be welcomed, as it helps to balance parallel requirements under the US Sarbanes-Oxley governance rules. US companies cannot expect to get special treatment on mainland Europe.

There are precedents which we can look to and which allow us to say, with some certainty, that a lot of the objections are ill informed. We would suggest that, as we saw with the PCI DSS governance rules, this controversy will die down after a short period of argument and what has been declared as "impossible" will merely become part of the data protection and management daily grind. When senior management of major companies realise what is at stake and that this legislation protects their customers’ information they will feel a lot happier.

According to a report in the Economic Times of India, the Indian government has demanded that the European Union designate her as a data secure country. The request came in the context of current bilateral free trade agreement negotiations. An Indian government official is reported saying "Recognition as a data secure country is vital for India to ensure meaningful access in cross border supply." The official goes on the state that "we have made adequate changes in our domestic data protection laws to ensure high security of data that flows in."

Seasoned India-watchers may disagree. Traditionally India has had no dedicated privacy or data protection laws, with various statutory aspects scattered under a number of enactments, such as India's cyber law, The Information Technology Act 2000. In 2011, India finally enacted the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011 to implement parts of the Information Technology (Amendment) Act 2008. The 2011 Rules cover a subset of personal data (referred to as sensitive personal data, but unhelpfully the meaning of this term differs from that used in the Data Projection Directive) and lay down security practices and procedures that must be followed by organisations dealing with such sensitive personal data.

The 2011 Rules were broad in scope and ambiguously drafted. The impact on the outsourcing sector was unclear and subsequent clarifications had to be rushed through by the Indian government. These clarifications helped somewhat but were still found wanting, with one commentator describing them as "half baked."

The EU's Data Protection Directive permits personal data to be transferred to third countries (i.e. countries outside of the EEA) if that country provides an adequate level of protection. The current list covers only a handful of countries including Canada, Switzerland and Jersey, and more recently New Zealand. The US is not deemed adequate but personal data sent under the Safe Harbor scheme is considered to be adequately protected. India is not deemed to offer adequate protection. Accordingly it has become standard practice to use the approved EC model clauses wherever EU-based outsourcing involves data transfer and offshore processing in India. These clauses, which provide an alternative lawful means of data transfer, place strict obligations on both parties to ensure privacy of data and are considered by some to be onerous and to act as a disincentive for business.

Thirty percent of India's $100-billion IT and business process outsourcing industry comes from customers based in the European market. Industry representatives are concerned that India defends and grows her share of the European outsourcing market, although for the time being it is worth pointing out that none of her main competitors, such as China, the Philippines, Singapore and South Africa, have achieved data secure nation status. As reported in the Economic Times of India, according to Ameet Nivsarkar, vice-president of Nasscom, the trade association which represents the Indian software industry, "if European companies start insisting on a data secure status as a critical factor for giving business, it will become a very important criterion for perception of a country. Nonetheless, most of our companies adhere to very high level of data security."

India has a strong track record of performing-low end data processing but desires to move up the value chain into more sophisticated outsourced work in sectors such as healthcare, clinical research and engineering design. Achieving data secure nation status will support this; the process however is a relatively arduous, and potentially political, one involving:

 a proposal from the Commission

 an opinion of the Article 29 Working Party

 an opinion of the Article 31 Management Committee delivered by a qualified majority of Member States

 a thirty-day right of scrutiny for the European Parliament, to check if the Commission has used its executing powers correctly

 the adoption of the decision by the College of Commissioners

It will be interesting to see how the EU reacts to India's demands, especially given the current proposals to reform EU data protection legislation in order to strengthen individual rights and tackle the challenges of globalisation and new technologies. Uruguay, Australia and Japan are all ahead of India being at different stages of advancement in the process. One thing seems clear - India will need to ensure her data protection laws and enforcement regime will stand up to EU scrutiny if she is serious about wanting to join the small but growing club of nations with EU data secure status.

So an election pledge becomes policy! From 1st April, unless there is a "strong business case" or a "matter of National Security", all Central Government IT contracts will be capped at £100m.

Not quite Big Society but certainly less big IT.

Whitehall, claim that the £100m limit can be complied with by:

• encouraging the reuse of existing assets;

• making changes to procurement such as the application of lean methodology to buying;

• greater competition among suppliers including through the increased use of SMEs; and

• creating contracts differently, for example, by reducing their length or separating out commodity hardware from a new project and purchasing it through an existing contract, or separating out telecoms needs and buying them through the PSN frameworks.

Nice words but will any of these really enable central government to deliver.

Will the £100m cap create a level playing field on which SMEs can compete?

Let’s get the ‘reuse of existing assets’ myth out the way first. Technology moves apace so quickly, that hardware and software once bought as a limited shelf life. Standard accounting practice depreciates its value from 100-0% over three years.

Consider also the level to which previous government procurement exercises have created bespoke solutions tailored for specific purposes. Simple reuse, other than for standard bought desktops, seems highly unlikely - when buying new generally costs less than reconfiguring old.

Making changes to procurement including lean methodology to buying. Ask any procure operating or supplier bidding under the OJEU regulations and they’ll say it does little more than add voluminous red tape, expense, delay and, ultimately, no better result.

The UK, it seems, stands alone in the EU in observing these regulations to the letter – think of instances such as that of Bombardier trains, British jobs being lost.

Whilst the intent of open and transparent procurement processes is entirely right – the application of scalpel (or preferably fire-axe) to the current EU regulations would minimize cost for buyer and supplier alike and would encourage more suppliers to pitch for such contracts. Ironically, doing away with these regulations could create more competition.

If the UK is to challenge any rule of the EU, it should challenge this first. Let’s see if this is Whitehall’s intention?

Greater competition among suppliers including through the increased use of SMEs. A cornerstone of Coalition policy is to help British business through enabling them to compete for both Central Government (as per this policy) and local government (the Localism Act) contracts. SMEs, small to medium enterprises, are normally considered to be companies with fewer than 250 employees and turnover not exceeding €50m, per annum.

If one of the aims of this policy is to provide SMEs with the opportunity to compete – then the limit of £100m per contract invalidates the policies efficacy as no SME could realistically compete at this level.

Even with a leaned out process of procurement, the cost for suppliers to go through such an exercise is prohibitive. Larger corporate organizations are able to absorb this by spreading the cost of failed procurement exercises across those they are able to secure. It will simply not be possible for SMEs to absorb this.

And, finally, creating contracts differently through making them shorter or separating out services. More contracts, means more procurement exercises, more bidders and more service providers. Even with ‘leaned out’ processes, the cost of procurement will rise through the increase in sheer volume of ‘moving parts’ in the system.

So, where are we?

Reuse, unlikely.

Lean processes, desirable but will the UK take Europe on?

More competition, and the encouragement of SMEs, the £100m limit makes this policy totally ineffectual.

Breaking contracts in to smaller, shorter or more discrete parts just adds volume and therefore increases the cost of procurement, Again, as the target is £100m per contract – this won’t help SMEs.

So, from a procurement perspective, this policy has some very real practical challenges.

There is also a massive oversight here. A failure to see the bigger picture. Even if these measures did reduce cost and increase SME engagement, in terms of the cost of procurement – the Government have considered the life and management of those contracts, post procurement.

One of the benefits of buying (properly) from big suppliers is that you can pass the management of the delivery of a number of services to the supplier. They can do this due to scale and infrastructure. Engage a larger number of smaller suppliers and who is going to take responsibility for and absorb the cost of ensuring that each of the procured services fit together?

All in all, whilst lean procurement and the challenge to Europe of the procurement rules is desirable, this doesn’t look like a piece of policy that has been that thoroughly thought out.

Stephen Allen FRSA, advises public and private sector organizations on creating efficient legal functions. He writes a daily blog www.lexfuturus.com which challenges the legal services market to innovate.

£62.9 million has been raised by Notion Capital to invest in high growth European cloud and SaaS SMEs, £40m of this is to be injected directly into UK SMEs.

High growth companies are due to receive £2m each from the government backed fund, called 'Notion Capital Fund Two'. The scheme makes up part of the Department for Business, Innovation and Skills' Enterprise Capital Funds programme, combining public, private and government funds and expertise to address weaknesses in the market.

It is hoped that with further fundraising the investment firm fund could reach nearly £100 million.

Jos White, co-founder of Notion Capital said:"We believe that there is now an under-supply of good quality funds serving an ever-increasing and ever-widening market opportunity within Europe. This imbalance will lead to a larger market share for the investors and also stronger and more experienced partners for the entrepreneurs. The results could mean a step change in the performance of European VCs that will in turn lead to further growth and investment in the market."

According to MPs the level of carbon emissions from goods imported and consumed within the UK is rising, whilst domestic levels of emissions are declining.

MPs warn that outsourcing emissions will damage the UK’s reputation and carbon emissions record. Between 1990 and2008 domestic emissions fell by 19% as a result of switching from coal to gas for electricity; however the carbon emissions footprint based on UK consumption rose by 20% in the same period.

Energy and Climate Change Committee chairman Tim Yeo said: "Successive governments have claimed to be cutting climate change emissions, but in fact a lot of pollution has simply been outsourced. We get through more consumer goods than ever before in the UK and this is pushing up emissions in manufacturing countries like China."

MPs are now calling for a new deal on climate change.