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Axe must fall on failing SBS


7th September, 2006


Businesses signal their frustration with the Government's approach to supporting small businesses, says the British Chambers of Commerce, and want the Small Business Service (SBS) to be axed. The BCC's Director General, David Frost, said: "Since the SBS was set up £79.3 million has been ploughed into it. In our view much of that money has been wasted: firms up and down the country have suffered six years of failure on enterprise policy and despite many warm words from a long line of government Ministers tangible support for small firms has been woeful."


Research conducted by the BCC tells the full story of failure and underperformance at the SBS. The organisation is responsible for delivering the Government's action plan for small business under seven themes, but for six of these, firms believe the SBS has proved virtually ineffective:


  1. Building an enterprise culture: 83pc of businesses have seen no improvement and almost a quarter (24pc) have seen a decline in the UK's enterprise environment;
  2. Encouraging a more dynamic start-up market: nearly nine out of ten businesses (86pc) do not feel that a more dynamic start-up market has been encouraged and of these, nearly a third (27pc) believe that the start-up market has worsened. Of those who have used publicly-funded business support, only four in ten businesses (42pc) thought it was relevant to the needs of their business;
  3. Building the capability for small business growth: over half of businesses (53pc) think that the capability for small business growth has stayed the same, whilst a third (34pc) think it has worsened;
  4. Improving access to finance for small business growth: more than four
    out of five businesses (83pc) do not believe that it has got easier for small
    businesses to access finance for growth and a third (32pc) believe it has become more difficult;
  5. Encouraging more enterprise in disadvantaged communities and under-represented groups: this is the single area where businesses have seen a noticeable improvement as 30pc of firms believe that enterprise in disadvantaged communities and amongst under-represented groups has been encouraged, resulting in tangible improvements;
  6. Improving small businesses' experience of government services: of the seven action points, this has one of the worst results with 90pc of businesses seeing no improvement in their use of government services, with two out of five (42pc) saying their experience of government services had worsened; and
  7. Developing better regulation and policy: the worst performing action point of the seven with 93pc of businesses seeing no improvement in regulation and policy and over half (52pc) believing that it has deteriorated.

Mr. Frost said: "It is time to end the cycle of failure and underachievement in supporting small businesses: the SBS does not carry the necessary weight in government to achieve tangible improvements. The conclusion to be drawn from these findings is that businesses' experience of efforts to help them is not what it should be and radical reform is required."

"Businesses must be able to have confidence in the quality of the support offered to them and know that their needs are given due weight within government. Looking to the long-term, we need to develop regional and local solutions that are business-driven and business-led", said Mr Frost.