Small businesses slate government support

15 November 2011


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15 November 2011 | Angeline Albert  

Many small UK businesses believe the government is failing to help them compete for contracts effectively, according to research.

A poll of 311 small firms, commissioned by skilledpeople.com, found 70 per cent say they suffer from a lack of support from the government in helping them secure public and private sector business.

One in five who received invitations to tender in the past year said they did not bid for the business because they were concerned they would be unable to deliver the goods or services required because of capacity issues or skills shortages. They said better government support, in the form of more flexible employment laws, reduced business rates and lower levels of corporation tax, would help SMEs combat their skills shortages and capacity issues and enable them to compete effectively.

Some admitted they have limited ambition to win large contracts and compete against bigger firms. More than a quarter (27 per cent) said they would not compete against a large competitor because “it’s not worth their time”. Of these, 10 per cent said this was because skills gaps were hindering their ability to compete.

Interviews were conducted by Opinium Research of sole traders up to those with up to 49 employees. There are believed to be more than 4.5 million small businesses in the UK.

In a separate announcement, data published by the Bank of England revealed five major UK banks’ lending to SMEs fell in the third quarter, calling into question their ability to keep a promise to support small businesses.

An agreement between the government and Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander Group, known as Project Merlin,  included pledges by the banks to lend £76 billion to SMEs in 2011. Data published yesterday reveals the banks’ combined lending dropped from £20.5 billion in the second quarter to 18.8 billion in quarter three. They must now lend a further 19.9 billion in the fourth quarter of 2011 to keep their £76 billion promise. 

 

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