SMEs given 'vague and complex' government support
24th February 2015 | News
UK business owners often receive complex and unclear support from the Government, according to the Business, Innovation and Skills (BIS) Select Committee.
In its new report, the Committee found that, nearly seven years on from the global banking crisis, SMEs in particular still find it hard to obtain access to finance.
The inquiry into government support for business focussed on access to finance, support for exports, manufacturing and efforts to encourage local growth and found that a number of the 600-plus schemes on offer to business owners are often poorly communicated and hard to access.
Adrian Bailey, chair of the BIS Select Committee, said: “Creating the best possible conditions for British business, particularly SMEs, to thrive is vital to our country’s long-term economic prosperity.
“While the government’s current approach is largely positive, we found businesses are not always clear about the support on offer, finding it poorly communicated, confusing and not focussed enough on business need.
“If the UK is going to become one of the best places in Europe to start, finance, and grow a business, then Government needs to do better at getting the word out so businesses know what support exists.”
The Committee recommends the Government do more to increase exposure of the British Business Bank to SMEs, doing more to raise awareness of traditional and alternative finance.
“For budding entrepreneurs, start-ups, or established businesses trying to grow, access to finance is vital,” added Bailey.
“Yet, the experiences of SMEs trying to access finance from the banks is still mixed. The Government needs to tackle this lending problem by capitalising on the British Business Bank’s expertise and creating clear signposting so that businesses are aware of the alternative finance providers which could help them.”
The Green Investment Bank (GIB) has also been highlighted for its integral role in driving the country’s transition to a low-carbon economy.
The Committee recommends the Government build on GIB’s positive start in providing investment to firms developing green infrastructure by setting out clear plans that give the GIB stronger future borrowing powers.
“UK Trade & Investment (UKTI) is charged with taking a leading role in meeting the Government’s £1trn annual target of exports by 2020,” said Bailey.
“The success of UKTI needs to be judged on its impact in helping businesses to export and its efforts towards the £1trn exports goal.
“But if Government is really serious about meeting this ambitious target the buck can’t stop at UKTI. All of Government needs to get in on the act to help deliver this win for UK Plc.”