Kier Starmer warned. Support for UK businesses risks collapse with stalling economic growth, funding delays and…
The National Enterprise Network, the leading representative of business support for micro, small and start-up businesses, has warned that urgent action is needed to prevent the UK losing the vital infrastructure which supports growth across the country’s economy.
As the latest news shows the UK economy continuing to slow down, NEN is calling on the government to deliver on its pledge to act on delivering effective enterprise support for the country’s millions of small businesses. Micro, small and medium sized businesses account for 99.2% of businesses in the UK, make up around half of the UK’s private sector turnover and also provide more than a quarter of the country’s jobs.
NEN chair, Alex Till, says that despite the government’s positive announcements around a Small Business Growth Service, the level of experienced locally-based business support that has been sustaining micro and small enterprises for decades is under severe threat. And with a cliff-edge approaching with no funding plans beyond the end of March, many enterprise agencies are already laying off staff and closing services.
“Without strategic intervention, the loss of this expertise and infrastructure will severely hinder the growth potential of the UK’s small and micro businesses, ultimately stalling economic recovery and innovation, “ said Alex.
“The recent short-termism of funding contracts, which often go to private sector firms with no established advisory quality assurance, often on a short-term basis and with no continuity, is undermining our country’s ecosystem of high-quality, tried and tested business support from experts delivered locally – an infrastructure which has been built up over decades by the country’s network of enterprise agencies and which is recognised internationally as a model for success.
“Historically, these not-for-profit enterprise agencies have reinvested their surpluses to match European and subsequently UK funds, providing essential services when other funding streams have been unavailable. With the loss of these funding mechanisms, enterprise agencies are now at breaking point, forced to sustain support with diminishing resources.”
NEN reports that the majority of their members have already been reporting job losses, some of up to 50% of their workforce as they have been sustaining critical roles and programmes since before Christmas on their own reserves. Many are now expecting further cuts and possible closures from June.
The plea follows a report earlier this year which NEN presented to the Business Minister Kevin Hollinrake MP, evidencing the value of investment in enterprise support in ensuring that EM&S businesses continue to be the backbone of the UK’s local economies, providing local employment, added economic value and new wealth, alongside bringing diversity to local communities, high streets and local economies. It also highlighted how funding and policy changes had added pressure to already stretched resources, impacting businesses survival in their local communities, putting jobs at risk and stalling the innovation and entrepreneurialism needed to restore the UK to growth.