FSB: Spending Review crucial for future of UK SMBs

Monday 10 June 2013

The Spending Review must stimulate investment in small and medium-sized businesses, in order to strengthen the economic environment, it has been claimed.

In a submission to the Chancellor George Osborne, the Federation of Small Businesses (FSB) has called for reform of the enterprise support landscape.

This comes after research from the lobby group found there are more than 800 grant schemes available for SMBs at the local level, with no less than 18 national schemes.

And while the FSB says government business support is important, it believes the Business Bank is an opportunity to simplify support and focus efforts on delivery.

This can ensure that good policy intentions have "a real impact on the ground" it has claimed. 

The FSB has also asked the Chancellor to detail how the Business Bank will be financed in the long term.

In its submission, the organisation claimed the institution must be independent from government, with its own source of funding.

The FSB also reiterated its view that the UK banking sector needs more competition, and the Business Bank is "fundamental" to making this happen.

With data from the Bank of England showing the main high street banks have reduced lending to SMBs, the FSB says it is "imperative" for the government to get this right first time.

John Allan, national chairman of the FSB, said the recent economic picture is "more positive than we have seen in a while".

"Our own data shows that confidence is building and is at its highest level since the start of 2011. The Chancellor must use the Spending Review to build upon this by setting out a long-term vision for ongoing investment in key areas such as skills, exports and broadband as well as the Business Bank," he stated.

"The Business Bank has the potential to be a game changer in the SMB finance market, but only if its aims and funding are clearly set out. 

"What the FSB would like to see is a long-term plan for how the Business Bank will be funded to ensure it remains independent, and for the current ‘alphabet soup' of government initiatives tidied up to create a much more focused offering."

Mr Allan claimed that with firms struggling to access finance, reforming the business support landscape and putting all funding in one place would make support clearer for small firms, help delivery and improve the environment in which they operate.

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Posted by Steve Williams