The government’s new Small Business Strategy introduces several initiatives aimed at alleviating the challenges faced by small businesses, though further support is needed to address rising costs.
The strategy focuses on addressing late payments by introducing stricter payment terms, mandatory interest on overdue invoices, and penalties for companies with chronic late payment issues. It also promises to boost access to finance with a £3bn increase to the British Business Bank and the provision of 69,000 start-up loans. There is an emphasis on supporting exports with an additional £20bn capacity for UK Export Finance.
A new Business Growth Service is being introduced to help companies access essential support and advice, while regulatory burdens will be reduced with a 25% cut in administrative costs. Further investment in skills development has been allocated, including £1.2bn annually to fund digital skills development and “digital adoption pilots” for businesses. The strategy also outlines the modernisation of tax and customs processes through the use of AI tools to reduce errors. Planning rules for smaller sites will also be simplified to assist business growth.
The East Midlands Chamber has welcomed these measures but urged the government to tackle ongoing challenges, including inflation and staffing costs, which continue to affect small businesses. A recent Chamber survey found that nearly a third of East Midlands firms have faced worsened cash flow, highlighting the importance of the new focus on late payments.
However, ongoing issues like a skills shortage and high inflation need addressing to fully unlock business growth potential. Many businesses are also concerned about the impact of corporate taxes and rising costs. As part of their call to action, the Chamber urged that the government listen to the sector’s needs and ensure that policies do not inadvertently hinder growth.
