A Labour review into British business by Lord Adonis has resulted in a recommendation for the devolution of power to big cities and regions – in order to balance out economic growth outside of London and give local authorities more teeth to support SMEs and start-ups.
The plans would involve investing £30 billion into giving more power to newly-created combined authorities (based on the current model in Greater Manchester), existing local authorities and Local Enterprise Partnerships (LEPs) – the link between local government and businesses.
Establishing a Small Business Administration to drive policy and provide more direct support for local SMEs is one of the main suggestions for improvement.
Other recommended changes include setting a target of 25% for all government procurement contracts to go to small and medium firms both directly and through supply chains, creating a regional network of Small Business Investment Companies to complement Labour’s policy on introducing regional banks, reforming UK Trade and Investment and UK Export Finance to better support businesses, and establishing LEPs as business hubs to encourage quality apprenticeships and help start-ups.
FSB supports Small Business Administration plans
The outcome of this review has been received positively by the Federation of Small Businesses.
FSB National Chairman John Allan said: “The Adonis Review puts forward a number of challenging recommendations to support growth, investment and job creation by small firms across the UK. In particular, the FSB has long called for the creation of a US-style Small Business Administration to provide a focus for small business policy.”
However Mr Allan emphasised that this would need to be properly set up, with a strong voice, in order to ensure that businesses are represented at the heart of government.
He also welcomed plans to make procurement contracts more easily accessible to SMEs, along with the vision to create high-quality apprenticeships to fill skills gaps at small firms.