East Anglia: Business groups welcome Government package to ‘fire-up’ growth
- Credit: Archant
BUSINESS leaders in East Anglia today welcomed further measures from the Government to drive enterprise and growth
A taxpayer-funded loans scheme set up to help young entrepreneurs get business ideas off the ground is to be extended to the over-30s – one of several reforms set out in a new report by David Cameron’s enterprise adviser Lord Young which the The Prime Minister said would help “fire up business growth” in the UK.
Other proposals which have been accepted by ministers include making it easier for small businesses to bid for £230billion a year of public sector contracts and a £30million voucher scheme to encourage firms to get expansion advice.
The age-limit for the Dragons Den-style loans, which are only available in England and being delivered through charities such as The Prince’s Trust, was only raised from 24 to 30 earlier this year .
Those whose business plans are deemed “robust” typically receive £2,500 which can be repaid over five years at a relatively low rate of interest.
Downing Street dismissed criticism of the scheme, insisting it had “exceeded expectations by 50% in its first year” by making 3,768 loans worth around £16m.
The package of measures will remove the need for bidders to complete complex pre-qualification questionnaires when bidding for public sector contracts worth under £200,000 and “simplify and standardise” procurement across the board.
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Under the Growth Voucher programme, firms will be able to pay for outside expertise on issues such as taking on new staff, marketing, financial management and online services, something fewer than half do despite evidence it generally aids growth, the report said.
Funding for the vouchers was announced in the Budget and private firms are being sought to operate the scheme. Lord Young’s report also heralds action to increase the role of business schools in encouraging start-ups and to ensure Government schemes are “properly resourced and targeted at the small firms that need them most”.
Number 10 said it accepted the Government had failed to sufficiently publicise existing help and how to access it.
Former Conservative minister Lord Young said: “Growing our smallest businesses would transform our economy – they are the vital 95%.
“If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero. We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”
Mr Cameron said: “It is very much true that Lord Young brings solutions to the table - his excellent report highlights the steps we can take to fire up business growth, helping to boost our competitiveness and ensuring the UK can get ahead in the fierce global race we are in.”
The first loans to over-30s are expected to be made this summer.
John Dugmore, chief executive of Suffolk Chamber of Commerce, said: “Lord Young is right to place emphasis on the growth of smaller firms, who need greater support and encouragement to help them become the wealth creators of tomorrow.
“Small and micro businesses will only be able to fulfil their full potential once measures are put in place to help them in areas such as accessing the finance, skills and services they need to grow.”
Mr Dugmore continued: “The British Chambers network proposed to Government a Growth Voucher scheme in September 2012 to help businesses that want to grow gain access to crucial services and advice.
“ We were therefore pleased that the Chancellor accepted our proposal by announcing the Growth Voucher scheme in the 2013 Budget and committed £30m to the scheme itself.
“Suffolk Chambers and our counterparts in Chambers of Commerce around the country look forward to working with the Government to bring the scheme to life, and enable businesses to get the specialist assistance they need.”
And on the proposed procurement measures, he added: “Across the county, small firms tell us that they would be keen to compete for more of the public sector contracts advertised in their local areas.
“They regularly tell us that it is hard to break into procurement by local councils and other bodies, due to onerous information and application requirements.”
“Therefore Lord Young is right to call for better access to local procurement for small firms, and for the abolition of the much-despised Pre-Qualification Questionnaires and other bureaucracy that stop many small companies from competing for council business in the first place.”
Richard Tunnicliffe, eastern regional director for the CBI, added: “Supporting today’s smaller firms to grow and create jobs will make them the UK’s medium-sized businesses of tomorrow.
“Lord Young rightly identifies that the Government needs to earmark funding to effectively market existing finance and support schemes. Most firms simply don’t know what’s available, so the new Business Bank will play a crucial role in raising awareness.
“We support the recommendation to open up more government contracts to smaller firms by cutting out the requirement for them to complete a pre-qualifying questionnaire, as most smaller firms don’t have the capacity to handle this.”
However, Graeme Fisher, head of policy at the Federation of Small Businesses, questioned some of the details of the proposals.
“To ensure success we believe such schemes need to be carefully managed so they benefit many, and do not simply add further complexity to what is already a confusing market place for business advice,” he said.
“One means of doing so will be to house start-up loans within the Business Bank, and thereby tie access to advice closely to access to finance.
“Growth vouchers could be a promising idea but again how they are delivered will be all important. Experience shows that this will be most effective if put the voucher is put in the hands of businesses themselves so they can choose the best advice available to them, and not in the hands of providers.”