Support for small firms ‘ineffective’ and holding back growth

Small firm's growth is being stunted by LEPs

Support offered to small firms by Local Enterprise Partnerships (LEPs) is “ineffective and holding back the growth prospects” of British businesses, including food manufacturers, according to the Federation of Small Businesses (FSB).

FSB claimed there were too many schemes in place to make an effective contribution and a lack of co-ordination between them.

It outlined seven principles to improve the offering from LEPs in a report backed by the Institute of Chartered Accountants for England and Wales.

John Allan, national chairman of  FSB, said the report highlighted the great potential of LEPs to energise small firms in England – but only if the right steps were taken to improve the design and delivery of business support.

‘Magic bullet’

“This could be achieved by cutting duplication, better co-ordination of support at the local level, and robustly evaluating schemes on their effectiveness,” he said.

“There is no ‘magic bullet’ solution that will work across the country, because every locality has unique needs that individual LEPs must satisfy. But a long-term approach based on proper evaluation of initiatives, co-ordinating plans nationally and focusing on fewer, more targeted initiatives will all work to raise business performance.”

The seven key principles were to review existing delivery; consider local economic conditions and the local economic ecosystem; develop co-ordination across the system; focus on a limited number of initiatives; check targeted programmes against key principles and put evaluation mechanisms in place.

The FSB called for LEPs to work with newly formed ‘Growth Hubs’ and make improvements to local business support an absolute priority, Allan added.

Growth Hubs provide free business support to help firms grow. 

Growing small firms through better business support could make a real difference to local economies and help in rebalancing growth outside London and the South East, Allan claimed.

‘Lags noticeably’

“Growth currently compares well with other G7 countries, but the economy lags noticeably in key areas such as our exporting performance and labour productivity,” he added.

Meanwhile, earlier this month, FSB took the issue of supply chain bullying and late payments to Number 10 Downing Street.

Allan said at the time: “Since the news around Premier Foods’s poor payment terms came to light we have seen more evidence of supply chain bullying across the food processing industry as well as other sectors.”

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