A new report, entitled Sharing Prosperity, has stressed the threat to business support funding after Brexit and the importance of ensuring funding isn’t cut.
The post-Brexit picture for business support
The report from the Federation of Small Businesses (FSB) and the Enterprise Research Centre (ERC) comes a year on from the launch of the Government’s Industrial Strategy, which aimed to rebalance economic growth across the UK.
It says it’s critical that funding levels aren’t cut when the new UK Shared Prosperity Fund (UKSPF) comes into effect—and that future funding should help to rebalance growth across the UK, targeting more deprived areas where firms have significantly lower turnover.
The creation of UKSPF will give the Government greater flexibility when distributing business support funds across the UK and devolved nations. However, the report calls for small businesses to be the focal point of the new fund, particularly those in more deprived parts of the country (referred to as ‘less favoured areas’ (LFAs)).
Mike Cherry, FSB national chairman, said: “As the UK leaves the EU, a large amount of business support funding will be transferred to UK control.
“This gives us a great opportunity to reflect on the current support landscape and rebalance the system, looking at how funds are best spent to benefit small firms across the UK.”
Rebalancing economic growth
Small businesses in LFAs have significantly lower turnover growth, at 0.7%, than those based elsewhere, which see significantly higher growth of 3.2%. The report calls for support to be refocused to reach LFAs, moving beyond job creation to include productivity, social impact on communities, modernisation of business practice and decarbonisation targets.
Firms in these areas are actually more ambitious than their counterparts in more favourable areas, not less, with 49.5% of small business owners in LFAs striving to become a business leader in their community, compared to 43.5% in other areas.
The report also recommends:
- The creation of a new Business England brand for business support in England to encourage more engagement and consistency across the country, focusing on key areas like access to finance
- Allowing each Local Enterprise Partnership (LEP) to distribute their proportion of UKSPF funding, earmarked for LFAs, with input from a new ‘small business champion’ who will sit on each LEP board
- Requiring all LEPs to create their own strategy to identify areas in need of more funding, and plan tailored support for them
“Policymakers must realise the potential and ambition of business owners in these ‘less favoured areas’ across the UK,” said Mike Cherry.
“Providing the right support will allow them to ramp up productivity, create jobs and see their business community grow.”
You can read the full report here. What do you think of business funding post-Brexit? Are you worried? Please share your thoughts.