FSB urges LEPs to drive small business growth

Monday 16 February 2015

A new report by the Federation of Small Businesses (FSB), and supported by the Institute of Chartered Accountants for England and Wales, is urging Local Enterprise Partnerships (LEPs) to press ahead with diving small business growth via changes to the way that business support is provided.

The FSB says that LEPs need to bring coordination and leadership to their local areas. It believes LEPs should provide a bigger focus to the offer of business support in their area, including regular monitoring of the effectiveness of schemes.

In recent times, LEPs have been used to aid with well-targeted business support, which is useful for sole traders and limited companies. This was recognised in the FSB's report, which adds that LEPs are important for delivering growth in the future across the national economy.

Yet the FSB also uncovered a number of areas where it feels LEPs could be doing better. Using evidence from the Enterprise Research Centre, the report talked about how current support can be ineffective and can hold back potential growth for businesses in regions in England.

A number of areas were flagged up as issues, such as the fact that the nature of an offer can be fragmented because too many schemes are in place without enough critical mass to ensure they make an effective contribution. What's more, there is often not much coordination between various schemes.

The report states that LEPs, which are working with the new 'Growth Hubs', are in an ideal position to ensure improvements are made to business support in their local areas, which would boost growth in turn. Because of the unique strategic position of LEPs, they are more likely to understand what local businesses need as well as the local economy.

LEPs are soon to undergo reviews of business support and so the FSB believe that they should look to follow the recommendations that are set out in the report.

National chairman of the FSB John Allan said: "This report highlights the great potential of LEPs to energise small firms in England – but only if the right steps are taken to improve the design and delivery of business support. This could be achieved by cutting duplication, better co-ordination of support at the local level, and robustly evaluating schemes on their effectiveness. The FSB therefore calls for LEPs to work with newly formed ‘Growth Hubs', and make improvements to local business support an absolute priority."

Mr Allan added that 99 per cent of firms in the UK are small business, so it could make a big difference to local economies if they are given better business support. This in turn would aid with economic growth outside of London and the south east of England, providing a better balance.

At present, the UK economy is seeing good growth rates compared to other countries in the G7. However, Mr Allan said that the economy is lacking in certain key areas, such as labour productivity and exporting performance.

He explained that there will be no solution that will work across every part of the country because each region has its own individual needs.

By Victoria McDonnell

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