5 Conclusion
64. Our inquiry looked over a broad range of Government
business support initiatives. We found positive feedback about
many aspects of this support offer, with expectations of further
positive developments as institutions such as the British Business
Bank, Green Investment Bank and UKTI continued to develop their
role. We heard about increasing "confidence" and "aspirations"
amongst businesses, which were slowly "beginning to translate
into more growth, investment and job creation".[171]
However, the Government has stated that "more can be done"
to improve the support it offers to businesses.[172]
We agree. The Government should be working to ensure its support
efforts better serve the 4.9 million SMEs which make up such a
significant part of the UK economy, by working to reduce the complexity
of the support it offers and increase its stability.
COMPLEXITY AND POLICY DESIGN
65. Despite moves towards simplifying the support
landscape, there remain a large number of schemes, each with different
objectives, eligibility, funding and contact points. Over 600
different schemes are currently advertised on the Government's
website, covering different locations, different industries, and
being supported by different funding sources,[173]
where businesses need "consistency and rationalisation".[174]
Furthermore, we heard that, in terms of organisation and strategy:
This whole area is confusing at the moment. You
have LEPs. You have City Deals. You have Growth Hubs. You have
unitary authorities. You have district authorities. You have county
councils. You have that plethora that is out there, without very
much steerage or guidance. This is one of the problems that you
have. Without some steerage and guidance, everybody is left with
a freeforfall, and nobody is undertaking a needs analysis,
if you like, of what business needs and what support is already
out there. Again, from our evidence, you are very clearly seeing
duplication. You are seeing overlapping. You are seeing a waste
of public sector finances.[175]
66. We also heard concerns about the extent to which
these schemes were addressing the needs of business, with suggestions
that a focus on narrowly defined outputs rather than broader business
or economic outcomes was limiting their overall effectiveness.[176]
For example, Dr Adam Marshall, Executive Director of Policy and
External Affairs at the British Chambers of Commerce, told us
that:
So many business support schemes around the UK
are let on contracts that specify output targets, and the chasing
of those output targets becomes the be-all and end-all of the
scheme. You will have great individuals working in those schemes
trying to get outcomes for the businesses they are working with,
but output targets still reign. That is a cultural problem of
the square mile we are in here around Westminster and Whitehall
rather than anyone else. Moving that focus would be helpful.[177]
67. The Department stated that measures to improve
its policy evaluation processes were being introduced, including
a systematic review of spending and appointment of a peer review
panel of expert evaluators.[178]
Regarding this evaluation, the Minster told us that:
In this process of simplifying the schemes on
the advisory side, we measured the value for money and the return
in order to assess whether these schemes should close if they
were not good value for money. We talked a lot about the optics
of it for the customer, making the customer journey easier, but
one of the advantages of contractually bringing them together
is that, instead of having separate pots of cash from the Government
for each of these different schemes, if one scheme is more beneficial
to business, then the money can migrate directly to it and the
pots become fungible, which is a better way to run this.[179]
68. Despite
the Government's desire to create a simple and effective business
support offer, the support landscape remains complex and difficult
to navigate. This hinders its overall effectiveness. It also dilutes
the Government's ability to track the efficacy and value for money
of each new initiative and to measure their performance. If the
Government had a better handle on what each scheme was aiming
for, the results it should bring about and where the gaps in business
need were, then it would be able to make its overall offer more
effective. A more robust understanding of desired outcomes and
value for money would support the development of this policy area.
The Government should undertake a regular needs analysis to ensure
its support offer is genuinely addressing areas of market failure
and business need. We therefore recommend that the Government
ask the NAO to audit the value for money of the schemes it offers
at present.
LONG-TERM STABILITY IN BUSINESS SUPPORT
69. In addition to being complex, we heard that the
support landscape can seem unstable, or subject to a constant
process of "revolution" as Government priorities changed.
As Dr Adam Marshall, Executive Director of Policy and External
Affairs at the British Chambers of Commerce, told us:
Businesses are bombarded with action plans, strategies,
etc—not just individual sectors but really across the piece.
[…] When it comes to business support—when it comes
to export support and manufacturing support—Government operates
in a state of continuous revolution, and that is to the detriment
of businesses, who become aware of something after two years,
become interested in it after five and see it as part of the furniture
after 10. Unless we have those kinds of timescales in mind, it
becomes very hard for them to grasp or really deal with the support
that is being pushed at them.[180]
70. The
Government should seek to establish cross-party consensus to ensure
that its offer of support for businesses reflects business need.
This means that points of information about or access to the support
available should remain consistent. The Government should strive
to improve the schemes in place and make them flexible enough
to meet business needs, rather than engage in continuous revolution
of the system.
171 Q2 Back
172
Department for Business, Innovation and Skills (GSB 22) extract Back
173
Government Website, 'Finance and support for your business', accessed
4 February 2015 Back
174
Q9 Back
175
Q10 [Mr Cherry] Back
176
For example in Table 3 on page 29 we showed that UKTI has an output
target for "70 per cent of businesses to report 'significant
business benefit'" after engaging with UKTI and an outcome
target to "achieve a specific amount of additional sales,
and report on the actual number of increased jobs" Back
177
Q283 [Mr Marshall] Back
178
Department for Business, Innovation and Skills (GSB 22) para 12.1 Back
179
Q410 Back
180
Q269 Back
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