By Claire West

The head of one of the UK’s six main business groups has warned that smaller companies face a ‘challenging’ year ahead.

In his new year statement, Forum of Private Business chief executive Phil Orford writes that many small to medium-sized enterprises (SMEs) will continue to experience tough times in 2011 due to factors including reduced public spending, increased costs and late payment.

Mr Orford also warns that the Government must fulfil its pledges to cut red tape in the workplace if it wants smaller businesses to replace the jobs set to be lost in the public sector, adding that a long-overdue simplification of the tax system would also encourage more companies to expand.

He argues that, despite current levels of unemployment, many SMEs still struggle to recruit people with the right skills and knowledge, so a refocusing of the education system would also come as a boost to smaller firms.
The statement reads: “In 2010 Britain crept out of recession, but many small businesses will find the year ahead even more challenging as they try to grow, creating the jobs lost in the public sector and driving economic recovery.
“Removing the barriers to growth created by tax and red tape must be a cornerstone of emerging enterprise policies. We are pushing for the UK’s complex tax system to be simplified and complying with regulation to be made more proportionate for small firms.
“Employment law, in particular, must cease to be a barrier to job creation and should be rebalanced more in favour of employers — and the majority of the workforce — not just individual employees.
“Simplifying employment law would go a long way towards empowering entrepreneurs to create jobs to grow their businesses, but there is a need to address workforce training and skills.
“With youth unemployment at record levels and small businesses struggling to find staff with the right skill sets, we will be campaigning for training provision that is business-friendly, and calling on education providers to focus on the requirements of small businesses as well as students.”
Mr Orford also uses the statement to announce that the Forum — a not-for-profit organisation founded in 1977 — will soon be launching a campaign aimed at improving the fortunes of both its members and the wider SME community.
‘Get Britain Trading’ will highlight the huge contribution smaller businesses make to the British economy. It will also call on SMEs across the UK to get involved in order to get their voices heard and help the Forum lobby top-level decision-makers on their behalf.
Mr Orford writes: “We want the massive contribution small firms make to the economy to be recognised and will urge the Government to place their interests and concerns at the heart of its enterprise policies for 2011.
“This will be a truly interactive campaign so look out for more information on the website. We need you to pledge your support so we can represent you effectively to Government.”
In his statement, Mr Orford also points out that the Forum will help smaller firms through the economic uncertainties ahead through its tailored products and services. In particular, Forum members struggling with issues surrounding late payment and access to finance can take advantage of a range of pioneering services through the Forum’s ‘Finance Director’ business support solution.

Services available to Forum members through the solution include access to discounted credit reports, free business monitoring, and preferential rates within alternative funding platforms including Funding Circle and Funding Store.

Concluding the statement, Mr Orford writes: “Small businesses hold the key to a private sector-led recovery, however they require fair and open trading conditions in order to grow and create jobs.

“We are working to ensure small firms are ready and able to trade as the economy continues to recover, including supporting exporters, providing protection against utilities companies and helping to open up public procurement opportunities, as well as assisting with accessing new technologies and sales and marketing techniques.

“Like the economy as a whole, small businesses across the UK are entering a crucial period. With the Forum’s support, protection and reassurance — and the right policies from the Government — it can also be a year of renewed profitability. Let’s work together to strive for success.”