UK’s small business support scheme suffers from slow uptake

0

The government’s flagship program to boost small business productivity has achieved less than a tenth of its target, leading to criticism that the Help to Grow scheme is excluding many businesses it aims to support.

Chancellor Rishi Sunak officially launched the program in August last year, calling on heads of small and medium-sized businesses to enroll with the promise of boosting their management expertise.

The government has said it wants to give 30,000 SMEs access to world-class business training in areas such as financial management and marketing.

But so far only around 2,500 have signed up, according to an official close to the scheme, who admitted the “demand side” was proving a problem despite initial claims that 10,000 companies had expressed interest.

Government officials could redesign the program and improve participation given widespread criticism from small businesses who said they were left out, according to a person familiar with the matter.

The scheme, announced by the Chancellor in the March 2021 budget and open for applications in May, is designed to boost the productivity and growth of SMEs, which is seen by economists as a long-term obstacle to growth in the Kingdom. -United.

Last month, Business Secretary Kwasi Kwarteng wrote to FTSE 250 companies, urging them to support the Help to Grow trade scheme by promoting the scheme to businesses within their supply chains.

Craig Beaumont, head of external affairs at the Federation of Small Businesses, said the program was well-intentioned but poorly designed because it excluded up to 90% of the country’s SMEs.

He blamed this on the scheme’s requirement that businesses must have a minimum of five employees to be eligible and called on the government to cut red tape that prevented the majority of small groups from using the scheme.

Beaumont said the low turnout was particularly concerning given the government made supporting small businesses a centerpiece of its business plans in last week’s leveling white paper.

Analysis by the opposition Labor Party showed the scheme would only reach 6% of eligible businesses. By October, the regime had signed just 810 companies, according to Labor MPs.

Beis, the commercial department, did not dispute the suggestion that only a fraction of the original target had been achieved. The ministry said the Help to Grow program gives SMEs “the tools, funding and support they need to thrive”.

“Feedback from participating business leaders has been very positive so far,” he said. “We urge businesses to sign up if they haven’t already to learn how to reach new customers, increase profits and grow.”

The Association of Accounting Technicians, a professional body, also wrote to Paul Scully, the Minister for Small Business, citing “significant concerns about his unnecessarily restrictive eligibility criteria”.

AAT said the scheme excludes the UK’s 170,000 charities and limits participation to just one member of staff per eligible business. It is “not surprising that the program is far from its goal of 30,000 participants,” he added.

Share.

Comments are closed.