Government’s business support in the spotlight following demise of local Business Links

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Following the demise of regional Business Links, and amid concerns new Local Enterprise Partnerships (LEPs) are more strategic bodies than business service providers, the Forum of Private Business has surveyed its members about changes to the business support landscape.

The present support being offered by the new ‘streamlined’ and centralised Business Link was deemed inadequate to aid growth by 61% of the members surveyed – but the main reasons given included barriers such as red tape (20%) and tax (13%) as well as issues with the support agencies themselves.

Just 10% of members who took part in the Forum’s last Referendum survey of 2011 feel that the new support structure will provide them with cost-effective support – and more than twice as many (21%) believe it will not.

Further, 30% of members consider support from Business Link to be irrelevant to their business, 40% said they had not required its support to date and 22% believe the public sector should not be involved in business support of the type provided by Business Link at all.

“It is probably true that the old Business Link services were underused and small firms do see value in some of the recent changes to public sector support, including the new website, but the removal of local advisers providing a face-to-face service has not been popular,” said the Forum’s Senior Policy Adviser Alex Jackman.

“It is important that a streamlined, centralised service does not mean reduced support, advice and guidance overall – particularly with LEPs set to operate more as strategic bodies – so quality control and effective monitoring is key.

“In addition to having a single point of contact covering all regulatory bodies in local authority areas, practical and valued support should come from organisations such as HMRC being prepared to treat small businesses with more understanding and respect, rather than continually wielding the stick.”

Business Link changes

In all, 21% of respondents said they had, at some point in the past, used their local Business Link’s face-to-face service, which has now been replaced by a central website and call centre.

While 58% said they had not used the local Business Link for a long time, many remain concerned that the loss of these services could erode specific understanding of their businesses and reduce the effectiveness of advice provided.

Some business owners believe Business Link’s new website is as good, if not better, than its predecessor, valuing advice on employment (30%), finance and grants (21%), starting a business (15%) and growing a business (12%).

Other areas of support scoring less well were IT and e-commerce (9%), tax (8%), sales and marketing (8%), intellectual property and innovation (3%) and public sector contracts (3%).

Business support entrepreneurs want

In all, 23% of members surveyed want public sector support organisations to be more contactable, with reports of difficulties finding relevant phone numbers, calls not being answered and often unhelpful advice when contact is made. Some businesses called for a named local contact to help them with specific issues and better understand their individual positions.

Others reported mistrust in government departments, particularly in a climate of public spending cuts, citing an emphasis on productivity targets, complex compliance systems conducive to mistakes, fears that inquiries could lead to inspections and concerns that some public sector business support is being duplicated from the private sector.

Forum members said they would value support focused on start-ups or businesses engaged in significant changes – such as employing their first staff member – via access to a trusted adviser.

Others feel there are too many restrictions on government support – with the system more frequently cited as a concern rather than issues with advisers or the advice given – meaning private sector business services are often seen as a better option.

Local authorities were criticised for failing to understand smaller firms and for giving preferential treatment to large corporations – with implications for Local Enterprise Partnerships (LEPs), which have significant input from local representatives. Better staff training was identified as a requirement and some members reported an overreliance on ‘computer systems’ and ‘tick-box forms’ to identify problems.

In all, 61% of members identified a business support need for workplace training, followed by 53% who cited grants for research and development, 51% business growth, 50% SME leadership and management programmes, 47% support for innovation, 47% accessing finance, 45% rural development and 42% resource efficiency.

Other sources of business support

Businesses displayed a high level of awareness of other sources of information, advice and guidance, with Acas deemed ‘effective’ by 52% of respondents, HM Revenue & Customs (HMRC) by 31%, the Health and Safety Executive (HSE) by 29% but just 11% believing the advice from their local council to be effective.

As part of its Get Britain Trading campaign, which focuses on the provision of public sector business support and the function of LEPs among a range of other measures to help stimulate small businesses and the economy, The Forum is calling for:

  • Proper quality control in order to gauge the effectiveness of the new Business Link support services, including monitoring small business feedback closely, and a willingness to adapt the system to changing need;
  • Assurances that the reduction in government websites, which took place early on in the Coalition’s term of office, does not lead to reduced public sector advice, guidance and support – particularly over red tape.
  • Reconsideration of the date for mandatory online VAT filing, particularly in light of insufficient broadband cover in many rural areas and following reports of issues with HMRC’s own systems.
  • A single point of contact, or single hotline number, covering all regulatory bodies in local authority areas – this is currently being trialed via the Leicestershire LEP.