Bodies responsible for England’s economic growth need to become more accountable and transparent to gain full support from the country’s small firms, says the FSB.
According to the Federation of Small Businesses seven in ten small firms in England with an opinion on devolution support the principle of giving more powers to local leaders, and two-thirds feel devolution deals are good for their individual businesses.
But small firms are concerned about their ability to feed into devolution deal making. Only one in seven (15%) feel they have been consulted on the devolution process in their area. More than half (57%) feel they cannot contribute to ongoing decision-making and a similar proportion (53%) believe there are not means to hold locally elected leaders to account.
Mike Cherry, FSB National Chairman, said: “The success of devolution deals will hinge on effective collaboration between new and existing local leaders. Transparency is key. Combined Authorities must clearly demonstrate how they are promoting growth and establish channels through which they can be held accountable. No doubt they’ll be heeding the NAO’s warning about becoming ‘a curiosity of history’.
“With new devolution proposals in the pipeline, future deals must be established on the basis of need. What we can’t have is the political affiliations of negotiators playing any role in fresh agreements.
“It’s encouraging to see that our new mayors are already engaging with small businesses in some areas. A number have established business advisory groups, and we urge those that haven’t to follow suit, ensuring they bring together representatives from all sections of the business community.”
Small businesses also flag the need for greater accountability among Local Enterprise Partnerships. Just under half of those with an opinion on the issue believe they are able to communicate directly with their local LEP.
More encouragingly, half believe their LEP represents the interests of their local business community, though only one in three feel LEPs represent the views of their individual firms.
Mr Cherry added: “LEPs do some great work across England and it’s crucial that they’re equipped to maintain their vital business support services beyond Brexit and play a key role in delivering an ambitious Industrial Strategy. That being said, reform is urgently needed.
“All LEPs are obliged to have a small business champion in place and that obligation needs to be met right across the country. Equally, the Government should produce comprehensive business data, including unregistered businesses, at a LEP level so Partnerships can tailor local growth strategies effectively.
“LEPs need to be beyond reproach in terms of their governance, overall transparency and representativeness. They should be channels for economic growth and targeted business support, not old boys’ clubs.”