1 Introduction
GOVERNMENT SUPPORT FOR BUSINESS
1. In 2014 there were 5.2 million private sector
businesses in the UK.[1]
Over 5 million of these were small or medium-sized enterprises,
each employing fewer than 250 people.[2]
Those small or medium-sized enterprises accounted for over 50
per cent of total UK private sector employment and over 50 per
cent of UK Gross Value Added output.[3]
Helping these businesses to thrive and grow is therefore vital
to the UK's long-term economic prosperity.
2. Ensuring the UK is "one of the best places
in Europe to start, finance and grow a business" and encouraging
"investment and exports as a route to a more balanced economy"
are key to the Government's Plan for Growth.[4]
This Plan includes a range of measures to support businesses,
including:
· Initiatives
to improve access to finance for new start-ups and business growth;
· Schemes
to provide investment across the UK;
· Assistance
promoting exports; and
· Increasing
green investment.[5]
3. The Government has described its approach to business
support as "helping businesses get the right support at the
right time".[6] It
considers that "it is the role of Government to encourage
the development of a responsive and competitive private sector
marketplace" by working to "address specific market
failures or equity shortfalls" and providing "a range
of schemes and interventions to fill these gaps".[7]
In pursuance of these objectives, there are over 600 publicly-funded
schemes to support businesses, many of which are targeted at specific
industry sectors or locations.[8]
The main Government-backed schemes, alongside their funding and
objectives, are outlined in the Appendix.[9]
Our inquiry set out to review the Government's approach to business
support and consider the extent to which its interventions are
working to address the needs of businesses across the UK.
THIS INQUIRY
4. We launched our inquiry into government support
for business in September 2014. We sought evidence relating to:
· The
Government's approach to business support;
· The take-up
of the Government's support offer by businesses; and
· The impact
of the Government's support programmes.[10]
5. We received over 30 submissions of written evidence
and held five oral evidence sessions. During these sessions we
heard from business groups, academics, business owners, local
enterprise partnerships, UK Trade and Investment (UKTI), UK Export
Finance (UKEF), the Manufacturing Advisory Service (MAS), British
Business Bank, Green Investment Bank, officials from the Department
of Business, Innovation and Skills (the Department) and the Minister,
Rt Hon Matthew Hancock MP.[11]
We thank everyone who helped with this inquiry.
6. This Report does not look in detail at the implementation
of every Government-backed initiative. It instead focuses on specific
areas of work and the extent to which the support on offer addresses
business needs in those areas. We start by looking at two Government-backed
institutions working to improve access to finance for businesses:
the British Business Bank, including the Enterprise Finance Guarantee,
and the Green Investment Bank. We then consider the support offered
to businesses involved in exports and manufacturing, focusing
on the work of UK Trade and Investment (UKTI) and the Manufacturing
Advisory Service (MAS). Thereafter, we discuss the communication
and coordination of Government support measures at a local and
national level, including the introduction of the new Business
Growth Service, which was launched during the course of this inquiry.
We conclude by outlining factors which we heard continue to limit
the overall effectiveness of the Government's support offer: the
complexity of the overall support landscape, the identification
of appropriate policy outcomes and the long-term stability of
support schemes.
1 Business Statistics, Standard Note, SN/EP/6152,
House of Commons Library, November 2014 Back
2
Business Statistics, Standard Note, SN/EP/6152, House of
Commons Library, November 2014 Back
3
Department for Business, Innovation and Skills (GSB 22) extract Back
4
HM Treasury and Department for Business, Innovation and Skills,
The Plan for Growth, PU1141, March 2011, p 5 Back
5
HM Treasury and Department for Business, Innovation and Skills,
The Plan for Growth, PU1141, March 2011, pp 6-7 Back
6
Department for Business, Innovation and Skills (GSB 22) extract Back
7
Department for Business, Innovation and Skills (GSB 22) extract Back
8
Government Website, 'Finance and support for your business', accessed
4 February 2015 Back
9
Department for Business, Innovation and Skills (GSB 36) extract Back
10
The full terms of reference for this inquiry may be found here,
accessed 4 February 2015 Back
11
The full list of witnesses for this inquiry may be found here,
accessed 4 February 2015 Back
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