Technology firms have come out fighting following the Chancellor of the Exchequer's move to scrap the Home Computer Initiative (HCI).

Gordon Brown announced he was bringing a premature end to the subsidised scheme in last month's budget. But local firms already dedicated to e-learning said they were still committed to both the business and its core strategy.

The Treasury withdrew tax exemptions for staff who may be loaned computer equipment by their employers two weeks ago. It was hoped the scheme would improve IT literacy skills across the workforce But Futuremedia, based in Nile Street, Brighton, said it was already putting together an alternative package that didn't rely on tax benefits.

Len Fertig, CEO, said: "Losing HCI is obviously being felt both by us and the consumers. We thought it was an extremely effective and popular programme that had been taken up by more than a million people in the UK.

"It was just about to make the move from large to smaller employers when it was abruptly stopped.

"From a business and from an educational stand-point it's really a shame it was cut off but we're already putting together a follow-on programme."

Computer systems provider Valusys, based in Old Shoreham Road, Hove, had just organised an advertising campaign to highlight their new HCI division. Mark Perrin, managing director, said: "We feel cheated. We were talking to a lot of customers and people saw the benefits for themselves and their staff.

"For us to then have to turn around and say it wasn't happening was not just embarrassing for us but unprofessional ofthe Government.

"An industry was created in response to a Government request, so to speak, for e-learning and helping people increase their IT skills, and then it was instantly taken away.

"We had no warning. Fortunately for us we have other feathers in our cap to focus on but it was a division we had put a lot of effort and time into."

One of the early pioneers of HCI, Futuremedia began loaning computers to workers at the Royal Mail in 2003 with impressive results.

Since the Chancellor broke the news lobbyists have been trying to force him into a U-turn and there is hope that a modified version of the scheme may surface. But for a lot of firms, Mr Perrin said, it would be too late.

Red PC, one of the biggest HCI firms based in London, has already gone into receivership. Valusys has had to pull an ad campaign with Juice FM and has lost thousands.

Mr Perrin said: "There are some very large HCI providers out there who just can't afford to wait around.

"We have lost a considerable investment but fortunately we had tightly budgeted. For others it's been harder."

Mr Fertig said Futuremedia, based in Brighton since 1982, was still committed to e-learning and would release its new version of HCI in the summer.

He said: "Most HCI homes were earning under £25,000 per year. For them to get a computer in the home for their children was only possible through what we were doing."

Mr Perrin added: "A lot of smaller companies had got involved and it was just, just starting to get going - then they pulled the plug.

"They apparently thought people were buying i-Pods and such through HCI but we certainly saw no evidence of that.

Tuesday, April 18, 2006