By Daniel Hunter
The Spending Review must stimulate investment in small firms to strengthen the economic environment — leading to the creation of jobs and growth, says the Federation of Small Businesses (FSB) in its submission to the Chancellor.
At the heart of the FSB’s submission is a call for reform of the enterprise support landscape. Recent research by the FSB suggests there are more than 800 grant schemes available for small firms at the local level, with no less than 18 national schemes. While Government business support is important, the FSB believes the Business Bank is an opportunity to simplify support and focus efforts on delivery so that good policy intentions have a real impact on the ground.
Furthermore, the FSB has asked the Chancellor to set out how the Business Bank will be financed in the long term. In its submission, the organisation suggests that the Business Bank must be independent from Government with its own source of funding.
The FSB has long said that the banking sector needs more competition and believes the Business Bank is fundamental to making this happen. With recent data from the Bank of England showing the main high street banks have reduced lending to small firms, it is imperative that the Business Bank gets this right, first time.
In addition, the FSB wants to see spending retained in key areas such as skills, exports, broadband and transport to support businesses and improve the UK’s economic outlook. This would provide a long-term commitment to recent policy developments and give small firms greater opportunities to grow.
Specifically the FSB is calling for:
- Spending on skills to be maintained with funding for Apprenticeships as a key area with employers, rather than providers, drawing down Government funding;
- Funding to be committed to UK Trade and Investment and a focus on helping the smallest firms export for the first time to meet Government targets of 100,000 new exporters by 2020;
- Ongoing investment in superfast broadband to maximise investment opportunities through technical innovation for rural businesses;
- Investment in the local road network, targeting investment on those roads with the highest economic benefit, to improve the ability of small firms to move goods and services to support economic growth.
“The recent economic picture is more positive than we have seen in a while. Our own data shows that confidence is building and is at its highest level since the start of 2011," John Allan, National Chairman, Federation of Small Businesses, said.
"The Chancellor must use the Spending Review to build upon this by setting out a long-term vision for ongoing investment in key areas such as skills, exports and broadband as well as the Business Bank.
“The Business Bank has the potential to be a game changer in the small business finance market, but only if its aims and funding are clearly set out. What the FSB would like to see is a long-term plan for how the Business Bank will be funded to ensure it remains independent, and for the current ‘alphabet soup’ of government initiatives tidied up to create a much more focused offering.
“With firms struggling to access finance, reforming the business support landscape and putting all funding in one place would make support clearer for small firms, help delivery and improve the environment in which they operate.”
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