Businesses believe that the SBS (Small Business Service) has failed them. Key targets have not been achieved and the SBS has nothing to show for its efforts to boost enterprise. It is likely that power and the purse strings will be handed over to the Regional Development Agencies (RDAs). But are they in a position to do a better job?
The Government set seven strategic targets for the SBS:
- to build an enterprise culture;
- to make it easier to start up a firm;
- to encourage entrepreneurs in disadvantaged areas and by under-represented groups;
- to make Government more accessible and helpful (achieved);
- to improve regulation;
- to improve access to funding
- and to create a positive environment for growth.
Business leaders and the organisations that represent them including the CBI, claim that the SBS has failed on all counts apart from getting more disadvantaged groups into business.
The greatest problem however is in creating an environment for businesses to grow. Encouraging more people to set up in business could be argued as irresponsible on the part of the Government when it is failing to nurture these fledgling companies.
Blame for the failure in terms of sustainable growth among small businesses cannot be laid entirely at the door of the SBS. Many businesses are failing because of the many hurdles that other Government departments continue to place in the way of growth. Surveys conducted by the FSB and the CBI indicate that businesses are being held back by red tape and in particular employment law (see Knowledgebase for full details of surveys).
The CBI has identified a more useful role for the SBS. Richard Lambert, director general, CBI has suggested that the SBS could act as a lobbyist to ensure that the needs of small businesses are seriously taken into account by policy makers.
It is thought that RDAs will be closer to the business communities working through Economic Partnerships and other business groups. As such they will be in a better position to respond to local needs and ever changing dynamics.
The partnership between the RDAs working in the regions and the SBS influencing national policy could provide the solution that small businesses need for growth.
Alistair Darling has indicated that it is very likely that control of business support funding will be handed over to the RDAs but this will not be made official until later this month.
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