SMALL AND MEDIUM SIZED BUSINESSES SUCCEEDING IN SPITE OF, RATHER THAN BECAUSE OF, THE GOVERNMENT
07/03/07 | 09:09
Despite comprising 99.9 per cent of the private sector there is a growing feeling amongst SME’s that they are an afterthought, with big businesses being the focus of attention.
This becomes increasingly apparent when the complexity of dealing with the Government is made clear.
As part of the submission, the BCC highlights the many frustrations that SME’s, who do not have dedicated HR and Tax staff, have to deal with. Amongst the schemes that the BCC is highlighting to put its point across are:
- Train to Gain. SME’s acknowledge the role they need to play to train employees and we support the Train to Gain model to improve skills levels among the workforce. However, to engage with this scheme employers must fill in up to 22 pieces of paper. The Government must make it easier and less burdensome for businesses to take part.
- The relationship between HMRC and SME’s is in crucial need of reform. Employers report to us mounting frustration in trying to deal with the tax office and at the overly prescriptive nature of the penalty regime. A single point of contact would streamline business dealings with their tax office and help to ease administration of the tax system for small firms as a consequence.
- The plethora of organisations focussed towards helping firms become energy efficient means that there is no clarity on offer. SME’s want to become more energy efficient yet companies such as the Carbon Trust are focussed towards working with big business.
- The complexity of public procurement contracts precludes many SME’s from developing new opportunities. From demanding an upfront fee to compliance with employment legislation, local authorities keep placing barriers up that SME’s do not have the resource to scale.
- Road congestion hits SME’s disproportionately, costing firms up to £17 billion a year. Despite lots of talk about what could be done to ease congestion, we are no nearer the implementation of any scheme that
David Frost, Director General of the British Chambers of Commerce, said:
“The complexity of dealing with the many layers of Government whilst trying to run a successful business is the bane of many employers lives in the SME sector.
“Despite comprising such a large proportion of the economy, the feeling is that the Government is keen to hear the views of big multinationals yet sees small businesses as an afterthought. This would certainly explain why so many Government departments offer complexity rather than clarity in dealing with SME’s.”
ENDS
MEDIA CONTACT:NOTES TO EDITORS:The BCC’s priorities laid out in the 2007 Budget Submission are:
Tax and Regulation
BCC members are concerned at the growing complexity of the current tax system and continuing burden of regulation. Most SMEs do not have the resource to outsource their tax, human resource and other employment related obligations. The current operating environment is becoming very complex and in many instances most SMEs are unaware of legislation or processes that affect them. 99.9% of all private enterprises are classified as a SME and we urge the Government to acknowledge their significance to the UK economy and simplify the tax and regulatory environment.
Education and Skills It is fast becoming a cliché that a highly skilled workforce is central to the continuing success of the UK economy. While it is clear that the Government is committed to improving the skills of the domestic workforce and putting business needs at the heart of this agenda, we believe that there are still a number of steps that could be taken to refine and improve the current infrastructure. The needs of SMEs must be taken into account in the development of the new 14-19 diploma system; while we believe the Train to Gain model of support for smaller businesses is the right way to engage the harder to reach in training. However there is significant evidence that Train to Gain is not yet functioning effectively enough; We are not convinced that the Skills for Business network is adding enough value in its current form. Leitch offers a real opportunity to reform Sector Skills Councils and get the most out of the network.
Transport
BCC members consistently, over time and across the country, register that this country’s infrastructure is one of their top concerns. Failures of our transport infrastructure, caused by under-investment, currently cost our members £17bn a year and that figure is rising. If Britain is not to fall behind its competitor nations this failure must be rectified. We need an integrated, sustainable transport system which delivers real choice across different modes of transport and meets the needs of business. The Eddington report includes many sensible measures but it is our view that it has not gone far enough. We need a national 30 year framework backed up by a real and sustained commitment to maintain levels of expenditure necessary to deliver real improvements.
Business Rates and Business Support
The British Chambers of Commerce remains opposed to relocalisation of the business rate under any circumstance. Businesses also want to see the Local Authority Business Growth Incentive Scheme reformed so that the principle of incentivising Local Authorities to promote economic development is retained but the benefits ring-fenced to projects that will promote economic development. The Business Support Simplification Programme must ensure that businesses are at the heart of testing the Product Development Group recommendations to ensure that BSSP is not solely a top-down policy exercise. Only by doing that will the right services that businesses themselves need be incorporated into the final product offerings. BCC members are also keen to see the expansion of Business Improvement Districts (BIDs), which give businesses an accountable and voluntary means of raising additional funds for specific projects decided on by them.
The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.