The Government’s flagship levelling-up agenda will fall short of improving regional economies unless more is done to bolster business support for smaller firms, according to a new report from the Federation of Small Businesses (FSB).
Small businesses are more geographically spread than big companies, and in every single local community. This means they are crucial to balancing-up productivity, innovation, jobs and opportunities across towns and rural areas as well as cities. Improving support for this group will play huge dividends, both economically and socially, and must feature in the forthcoming Spending Review to revive local economies.
However, significant gaps in business support for small firms and the self-employed are today identified in FSB’s new report, Open for Business.
It sheds light on how business support advice was used by small firms during the pandemic, drawing lessons from how while it supported some, others were left with little assistance.
- 84 per cent of small firms some sort of business support advice during the pandemic
- 45 per cent of small firms say the advice they received helped their business survive the pandemic
- But most sole traders found that business support advice for them was not helpful
FSB Development Manager for Hampshire, Dorset and Isle of Wight Nicola Bailey said: “We’ve endured almost 18 months of this terrible pandemic which has wreaked economic chaos for small businesses all over the country. That’s why the support and advice available to them has never been more important.
“If small firms are to compete on fair terms with larger businesses, if regions are to step out of the shadows and if all businesses can thrive after the pandemic, then an element of levelling up is critical to success.
“Even when times are good, gaining access to the right support at the right time can be tricky.
“We’ve seen huge numbers of small firms, almost half in fact, state that their business is still standing today thanks in part to the economic advice they managed to access. And while this is excellent news, it means that almost half didn’t have the same levels of success.
“For too many, knowing where to look, who to speak to and what to do leads to a dead end and that needs to change. Every day, small firms ask themselves how can I manage my debt? How can we achieve Net Zero without breaking the bank? Or how can I attract more staff? It’s these sorts of questions where the right advice, can make huge differences.
“Our findings show that existing business support advice already helps small firms when it comes to taxation and regulation, but as our post-EU journey continues and while we continue to weather the economic COVID-19 storm, there is plenty more Government could be doing to help make things easier.
“At the outset, Ministers should recognise the centrality of small businesses to the levelling up agenda in every region and community. You can only level up local economies by backing small businesses. They will succeed by improving the support they can access, which in turn will mean more small businesses, trading more, creating more jobs and wealth.
“Government needs to simplify and streamline how and where small firms can access critical business support advice, building on what currently works.
“It should also ensure that the level of funding for business support via UK Shared Prosperity Fund matches, or exceeds, those funds previously received under European Structural and Investment funding.
“If the right advice can be accessible to all, then small businesses can thrive, our economy can bounce back and everyone benefits.”