Commentators suspect that the boom in business creation is fuelled by redundancy payments and the growth of the internet and faster broadband speeds allowing entrepreneurs to take advantage of e-commerce opportunities that require much smaller up-front investment.

But setting up a company is relatively easy; keeping it going beyond the critical three year period is less so. As the new government continues to feed speculation about the deconstruction of publicly funded business support [see earlier story], doubts increase about the level of support that fledgling businesses can expect from the State increase.

What scant information exists suggests that local delivery of pre-start support will be provided by the new Local Enterprise Partnerships [LEPs] [see earlier story], but LEPs are probably between one and two years away from being established and most new companies hit problems in the first six months.

ECONOMIC PARTNERSHIP COMMENT

Brighton & Hove has a good rate of private sector job creation [the best in the UK over the last decade] and business creation but it is fragile and needs to be nurtured. It would be a great pity to squander the resurgence of entrepreneurship that the recession seems to have spawned.

If the government is serious about creating over one million private sector jobs to compensate for the loss of nearly half a million public sector jobs it needs to give businesses some clarity as a matter of urgency about who is responsible for what.