We now have a second prime minister in a row with northern roots and a commitment to the Levelling Up agenda. We even have a levelling up minister who grew up in Aberdeen. So, why then is there an obvious absence of similar commitment to the sector of the economy, which across the length and breadth of the country, represents 33 per cent of the country’s employment, and 50 per cent of its GDP?
The country is host to six million ‘small’ entrepreneurs, without whom high streets would be waste lands, housebuilding would cease and the UK’s claim to lead the world in technology would be hollow.
Yet, that is the image conjured up by the government’s initial failure to appoint a dedicated small business minister in the last two rounds of formal ministerial appointments. There was a time when the small firms minister had a seat at the cabinet table, but the initial commitment for small business to fall alongside 15 other responsibilities of a junior minister with no evident experience of what running a small business entails, was a worrying indication for those wedded to early stage small businesses. After a degree of lobbying, the appointment of Kevin Hollinrake, as a junior minister with specific responsibilities for small business and enterprise, is a little more encouraging, but questions remain around whether the role is in title only or whether he will have the authority to bring about
change.
If it’s the former, then there is little chance that the funding hitherto channelled to the sector from Europe through the European Regional Development Fund and the like will be replaced by anything that might resemble genuine ‘small business support’.
The inference in the government’s strategy appears to be that small business is to be ‘dumbed down’ rather than levelled up, with any levelling up being focused on a small number of big businesses. Levelling up funds are being channelled out of the Treasury to the local authorities with the capacity to oil the wheels of those big businesses.
But what of the ‘micros’ and the ‘small’ businesses here? Entrepreneurialism is now the norm for many Generation Y workers. A huge proportion of these, at least in their early stages, are managing single person ventures upon which the majority in the country rely. But being a small business owner is a lonely place without access to friendly, affordable face-to-face advice and flexible cashflow funding, those being two prerequisites to surviving.
Until now, funding from Europe, and a small business friendly government ensured qualifying grants and funding were targeted at business support, backing over 100,000 starts ups each year. Support organisations could plan programmes with certainty of delivery, and micro and small businesses were able to benefit from both cashflow and expertise help. As a result, they were able to survive and grow in every region of the country.
But time is running out for start ups. A combination of Brexit and the government transition has left the sector in abeyance, unclear on what funding will come from where, to whom it will be allocated and to where they will direct it.
The government’s belated response in appointing Kevin Hollinrake is welcomed but the Cabinet now needs to demonstrate its faith in the new minister without delay, recognising the value to both the economy and employment that small and micro businesses bring, let alone their criticality to delivering on the Levelling Up agenda.
Key Points:
• It appears that there is more ‘dumbing down’ of small business rather than levelling up.
• Small business needs greater certainty around funding in the wake of a Brexit black hole in support.
• Levelling up will be dependent on government recognising the value of small and micro businesses.
This article originally appeared in The Leaders Council’s special report on ‘The Levelling Up agenda’, published on November 30, 2022. Read the full special report here.
Photo by Tim Mossholder on Unsplash
