20/12/2010 by admin.

Following the Chancellor’s statement on the Comprehensive Spending Review today the Federation of Small Businesses has urged the Coalition Government to now put in place the missing link, namely a Small Business Programme for Growth.

FSB research has shown that three quarters of small businesses thought the Coalition Government should cut spending to tackle the public deficit and six in 10 said they were more willing to accept cuts in public spending because of the size of the public sector deficit.

We have welcomed measures to increase the number of adult apprenticeships by 50 per cent to 75,000 new apprentices a year. Also welcomed were the measures in moving towards a low carbon economy and the commitment to improve the infrastructure of the country. The £530 million directed from the Government and the BBC to put in place superfast broadband pilots is something small businesses were calling for. The investment in the Post Office Network is applauded.

However, the FSB believes the missing link in the Government’s deficit programme is the need to create growth – increasing the tax base, creating more businesses and incentivising small firms to grow and innovate.

A Programme for Growth is even more important given that latest FSB research shows that 10.4 per cent of firms expect to decrease employment over the next three months as business confidence in future prospects and revenue growth weakened over the July to September period. 

A Programme for Growth aimed at small firms will be very relevant given that more than 80 per cent of jobs in the EU were generated by small businesses between 2002 and 2007.

In a future Programme for Growth, we need to see such areas covered as;  an extension to the National Insurance Contributions holiday to include existing firms with up to four members of staff providing incentives when they take on three new employees - funded by scrapping the £1 billion Regional Growth Fund. We should seek a cut in VAT to five per cent in the construction sector to help create jobs and stimulate the economy, but also increase revenue to the Treasury. There should be a cut in the business support budget to £500 million and concentrate spending on genuine business support for micro businesses and a fully operational web portal.

We all know we are living in an age of austerity and that these cuts will affect us all. But our members understand that to reduce the public sector deficit, these cuts have to be made. The small business community continues to have a vital part to play in driving a credible recovery and taking on new members of staff to help tackle unemployment, so it is now vital the Government puts a Small Business Programme for Growth into action immediately.

As our research shows, small firms are at tipping point and lack the confidence to take on the 500,000 people that will be made redundant as a result of these cuts. So it is up to the Government to incentivise the small business community in promoting growth and help small firms take on new staff.

Consider the current position. Thousands of young people having been through the various levels of education and are now without employment. Thousands more on the way. Complications in statistics caused by immigration. Possibly millions to become unemployed through the emerging cutbacks, even those taking natural retirement will possibly need to work to afford growing costs. Then there are the likes of myself, fast approaching potential retirement age, but with the need to continue working just to keep a head above the growing tide of costs. However, in the micro business of which I am a Director, we are looking forward and taking a positive stance and have employed a Graduate intern from the University of Kent – doing our bit to keep an excellent young person in Kent and in employment. That is not philanthropy, that is the entrepreneurial spirit of risk taking and fighting back.

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20/12/2010 by admin.

In the swirl of activity following the birth of this new government, we have seen a number of significant policies emerge. To some extent, the concept of the Local Enterprise partnership can almost be viewed as a non-policy, in that very little guidance has been proffered by the Ministers behind it. With the baying for the death of the RDAs and the other Quangos we have to be very careful about babies and bathwater. The cost of those agencies has been significant, but getting rid of them does not necessarily mean we are making significant savings. With some recently leaked documents hitting the public domain, Sir Ian Magee of the Institute For Government has said that 75% of the money spent was tied up in just fifteen bodies and 75% of that was given in grants to other organisations. Bringing the functions back into Government might lead to long term efficiencies but there are risks that services will disappear entirely. Government “Has to make clear plans to ensure sure those savings are delivered and the expertise maintained”.

The recently documents were suggest that out of the 724 public bodies, around 180 face closure or moved into the private sector and maybe as many as 350 might be saved. The picture is not clear. There are so many services tied up in a myriad of delivery vehicles that it seems an impossibility that these can be quickly disposed of – if at all – without doing some damage to the economy or our ability to find alternatives. If all we are trying to do is save money, that has to be balanced with an impact assessment on the economy, and no doubt that is why this Government is so keen to bring in businesses as the route to repairing the return to the Exchequer.

The FSB nationally has written to the Communities Secretary, Eric Pickles MP, to encourage Government to ensure the partnerships have proper business representation as the deadline for local councils to submit plans for Local Enterprise Partnerships closed last month. The Government has received 59 proposals in total, some of which will be very strong. However, the FSB has deep concerns that in some areas, business engagement has not reflected the Government’s call that businesses be fully involved in developing the proposals. Small and micro businesses are the drivers of the local economy and it is imperative that their views are heard and properly represented on any LEP.  A short discussion with business looking at an entirely new direction and a concept that requires some very deep development can only give the outline of approval. Where the scope of the geography is of the size of Kent and Essex, we will have to be very wary of building an infrastructure that could at worst be described as a little brother of SEEDA.

We have urged the Government to ensure that where LEP proposals put forward, there must be a fundamental evidence bas that they have been truly endorsed by business and that there is a robust route to a true partnership, furthermore as a national organisation it stands firm and would not give the green light to continue until a clear vision for doing so is set out.

Having had the benefit of an analysis of several of the LEP bids that colleagues in FSB regions across the country have been – or not been engaged with, together with some interesting general comments on the quality of bids from Government officials coupled with an entirely bland response from Mark Prisk MP to a letter I wrote in my just completed term as Chairman of SEBUS,  I can only surmise that we truly have a long way to go.

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