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News - 24 September 2006
Richard Lambert, /director General, CBI

CBI says give SBS real power

The CBI has called for greater power to be given to the Small Business Service (SBS) to promote the needs of smaller firms to policy-makers. This announcement follows hot on the heels of a vote of no confidence in the SBS from the British Chambers of Commerce and a suggestion that the organisation would be abolished if the Conservatives gain power in the next general election.

The role of the SBS is being reassessed. It is expected to be given a smaller policy focus and a closer tie-up with the Treasury. This has sparked comment from business organisations that represent the interests of small businesses. (See previous stories in Knowedgebase entitled 'Business calls for closure of SBS' and 'Small Business Service faces radical cuts')

The CBI would like to see the SBS in a position of influence within Government with the power to audit policies affecting entrepreneurial activity.

The CBI has proposed that the SBS should be a powerful advocate for small business, similar to the United States' Small Business Administration in its heyday, and invested with real authority in Whitehall. This should, the CBI suggests, include the ability to audit other departments' work to examine their business-friendliness and to insert liaison officers across government to build pro-enterprise policies outside the DTI.

The CBI is urging the Secretary of State for Trade & Industry, Alistair Darling, to adopt these firm policy recommendations in the restructuring of the Small Business Service (SBS).

Mr Darling should also ask his department to frame an enterprise white paper with the dual purpose of focusing policy-makers' minds on their attitudes to entrepreneurial activity, and producing a public policy document against which to measure future business-related government activity and legislation.

CBI Director-General Richard Lambert said, "The Government knows that successful small businesses are vital to the UK's long-term prosperity, but this means they need their voices to be heard so they can help shape an environment which is conducive to growth.

"The Small Business Service should have the power to audit the work of other government departments which have an impact on small and growing business, and mechanisms should be developed to link it more formally with government beyond the DTI.

"The CBI's vision of the SBS has always been built on the success of the US's Small Business Administration in its heyday when it was a powerful advocate for enterprise, with a chief executive able to speak out with authority on behalf of small business. This should be the aim for Government."

The CBI believes far more attention should be paid to boosting the growth of small firms - perhaps the most important driver of wider economic productivity and growth - as well as promoting start-ups.

According to the SBS's own statistics, since 1999 the number of businesses in the UK has grown by 600,000 to 4.3 million - but the proportion with employees has dropped from 37% to 28%. Although more people are willing to take the risk of starting a business, too few are growing them to a point where they need to take on staff, and this needs to be overcome.


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