We have some time taken the view that most Government “help” for small (if they know what that means) business is largely ineffective.

20 Jul 2015

We have some time taken the view that most Government “help” for small (if they know what that means) business is largely ineffective.  There are exceptions, and we know them, but by the time the original idea is consulted on with interested parties, and a fee paid to an international firm that also doesn’t have good experience of small businesses, the Civil Servants wrap the deal in so much red tape that completing an application because it is subsidised even though it doesn’t actually offer what you really want becomes a futile and frustrating exercise. 

Government should stick to improving the climate and infrastructure for entrepreneurship and leave off trying to get too “involved”.  The offerings are so emasculated by regulation and distorted by Civil Service interpretations that even the people that authorised the expenditure don’t understand half of it:

According to the Daily Telegraph, research by the Entrepreneurs Network and Bircham Dyson Bell shows that half of MPs are unaware of the policies that have been introduced to help boost small business growth. Of the 100 politicians surveyed, 55% had never heard of Catapult Centres, the organisations set up by Innovate UK, the Government's innovation arm, to promote R&D; while 48% had never heard of Innovate UK itself. Some 58% admitted they had not heard of the Angel CoFund, the Government's £100m seed investment arm, while 53% were unaware of the 2013 Patent Box legislation, which helps entrepreneurs profit from their intellectual property.

The Business Growth Service was slightly better known - just 38% of MPs had never heard of it. Meanwhile, the majority of Conservative MPs polled (86%) were in favour of lowering personal taxation and business taxation but 56% either hadn't heard of SEIS, which offers investors tax relief on 50% of their investments up to £100,000, or didn't know enough about it to decide whether it was effective. Labour MPs were similarly caught out by the poll: 63% were in favour of spending more on Government grants and loans, and 61% wanted more Government support services. However, 61% had never heard of Innovate UK, which supports entrepreneurs by running competitions worth up to £536m in Government funding, or didn't know enough about the scheme to decide if it was effective. 

Taking up Government support is often such a distraction and is so focussed on what THEY think is needed rather than what the business truly requires that what is on offer is ignored or discounted, except by the intermediaries who get paid to deliver the unsuitable support.  A healthy subsidy for Chambers of Commerce would be more cost-effective and likely to deliver a more useful, business-relevant solution for local businesses.