Business development · 6 January 2017

Local business support getting worse for seven in ten owners

In last year’s Autumn Statement the chancellor pledged to invest £1.8bn in local business support

Local authorities have failed to deliver local business support for almost three quarters of business owners in Britain, according to a nationwide survey that assessed the outlook of UK enterprise.

Business data website Company Check used the views of 1,300 company leaders across the country to provide an understanding of the main challenges faced by small businesses for 2017. Just three in ten business owners felt that effective local business support was available.

The lack of confidence in local authorities has grown since the same survey in 2016, when 60 per cent were unhappy with the levels of local business support available.

The economy remained the biggest concern for business owners, with over a third of respondents recognising economic uncertainty as the main threat to company growth and profits.

Company Check operations manager Katie Deverill, author of the “Business Census” report, said that the new findings came with a warning regarding the relationship between local government and business.

“It’s to be expected that the economy is the biggest concern, but what is striking is the growing disaffection with local authorities when it comes to supporting and nurturing business growth,” Deverill said in a statement.

The findings may alert the government to the fact that national initiatives, such as Local Enterprise Partnerships (LEPs), have failed to provide effective local business support.

LEPs were set up in 2011 by what is now the Department for Business, Energy and Industrial Strategy (BEIS) as voluntary partnerships between local councils and business owners, targeting growth at a local level.

In last November’s Autumn Statement, chancellor Philip Hammond maintained the government’s commitment to using LEPs as the primary link between local authorities and businesses, with a series of investment pledges for 2017.

A £1.8bn budget was announced for LEPs across the country, of which the East of England – the area with the worst outlook on local government assistance – is set to receive just £151m.

Birmingham was one city that experienced success in the role of LEPs. As part of plans to create a Midlands Engine for Growth, in 2016 Birmingham City Council teamed up with six LEPs to generate £87m in private sector investment for local businesses in 2016, receiving the title of the UK’s “most entrepreneurial city” by small business minister Margot James.

In response to the survey, the Federation of Small Businesses (FSB) commented on the future of LEPs, as national chairman Mike Cherry made recommendations on practices.

He said in a statement: “We want all LEPs to honour the commitment to have small firms represented on each and every LEP board, and to be more transparent and accountable to their local business communities.”

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.