Government help for small and medium businesses 

With the economic gloom spreading it is important that the Government does everything it can to help small and medium sized businesses (SME’s) in North Staffordshire.  These companies are critical to our long term economic success.  Over 99% of UK businesses are SME’s and they provide almost 60% of private sector jobs.  Ensuring their long term health is therefore vital.  I was pleased then to hear the Government’s announcement this week of a £4bn package designed help our small businesses. 

The prime concern facing most small businesses is cash flow.  As economic problems mount, the time organisations take to pay their bills to suppliers increases which makes cash flow a real problem.  To try and ease this the Government has pledged to pay its suppliers as soon as possible, and within 10 days at the latest.  This compares to normal payment terms of 30 days plus.  The Regional Development Agency Advantage West Midlands have also committed to do this as have the NHS Trusts.  This shows the Government will play its part of easing cash flow problems for small businesses. 

The deal struck to support our large banks is also structured to support our small businesses.  As part of the recapitalisation package RBS, HBOS and Lloyds TSB committed to “maintain the availability and active marketing of competitively priced lending to SME’s at a level at least equivalent to that of 2007”.  Small businesses must know that the banks are open for business and banks must take their responsibility to lend to them seriously.  Fortunately, now that Government owns a major stake in these banks they also have a major say in how they are run.  The Government will monitor closely how the banks are delivering on their commitment and will ask for evidence of how they are to achieve this.  Of course, the Government can only enforce this measure on the three banks mentioned above but given that they operate in a competitive market other banks can be expected to follow. 

Business Link West Midlands are also offering a free health check for every small business to offer expert advice on how to survive during the downturn.  If you run a business and are interested in this you can contact Business Link on 0845 1131234.  There are also a number of “credit crunch” workshops in November for anyone business looking for advice.  If you would like to attend you can book on place on 0845 6099890.

A further measure the Government is taking is to provide £350 million of funds to help small businesses build the skills and expertise of their workforce.  For the first time training at level 2 will be free for all SME employees regardless of whether they have already gained qualifications at that level.  Management and leadership training will also be provided. 

At this difficult time it is vital that the Government is doing everything it can to support our small businesses and is demonstrating real leadership to guide us through these difficult times.  I will be glad to feed in any issues back to Government.