Advice shop hold-up

The government is determined to be seen as the small businessman’s friend. After all, SMEs account for 97% of businesses in the UK and any way you cut it that is a lot of votes.

But the price of friendship is high. The sort of friend these businesses are looking for is one that reduces the administrative, tax and red tape burden on their beleagured sector.

Ministers had hoped the Small Business Council – an organisation designed to cut red-tape and fight for the rights of SMEs within Whitehall – would be just the sort of friend SMEs were looking for.

But then problems. The DTI has been forced to reschedule its launch date into May at the earliest as none of its 20-strong council members have yet been announced. The Council had been due to launch in March but, Accountancy Age revealed last week, due to technicalities including recruitment, the date has been pushed back.

‘The recruitment process has taken longer to get through than we expected but we are hoping to get the Council up and running in May,’ a DTI spokeswoman explained.

FrameStore joint chief executive William Sargent, well-known for his block-busting digital series Walking with Dinosaurs, was appointed as the first chair of the Small Business Council in March, but has still to meet the council which will act as the go-between between him and the SME community.

Now with the launch of the council delayed and with the new members naturally going to take time for the new members to bed in, it may be the case that nothing worthwhile gets done until after the summer.

David Hands, a spokesman for the Federation of Small Businesses, says: ‘At the moment the delay of the launch of the council has been about a month and there is not too much concern about that. However if the delay drags on there is a danger people will begin to question how serious they are about small businesses.’

But, he warns, in order to stave off criticism it is imperative the formula for the council is right from the beginning.

‘The council is going to be quite important and so it is essential the make-up is right. But the chief executive was in place and working before his official start date in April, so a small delay will not hurt too much, as long as it is off the ground in the next two to three weeks,’ adds Hands.

The council will undoubtably need to consist of the right mix of members with relevant experience in the SME sector, something which lead to problems for the Trading Enterprise Councils and Business Links schemes.

Forum of Private Business spokesman, David Harrop, fears that that might not be the case. ‘We would have liked a presence on the Council as we have 23 years of factual information on the sector, but we have been informed we will not have one,’ he says.

‘The composition of the Council will be critical. If it has too people with just large business experience on board then it is doomed to failure. It’s task is going to be monumental but then the prize for getting it right will be to win a battle to change the whole government thinking towards SMEs – and that is a battle that has been going on for 25 years.’

Support from the very top

Gordon Brown, chancellor of the exchequer
‘…to match our small business tax cuts with a new champion for small business in government, we will simplify help for small businesses and establish, for the first time in our country, a single Small Business Service, devoted entirely to the needs of small business.’
Budget Statement, 9 March 1999

Stephen Byers, secretary of state for trade & industry
‘I intend to establish a new body – the Small Business Service -specifically designed to meet the needs of smaller businesses. I can announce that I will have funds of over £100 million new money.’
announcement to Parliament, 10 March 1999

Patricia Hewitt, small business minister
‘We are determined to get rid of burdens on business wherever we can. These changes are just part of our programme to reform and reduce regulation. We will announce further changes very soon.’
Announcing how the SBS will help cut red tape, 29 March 2000

David Irwin, SBS chief executive
‘Very few small companies can grow quickly without external debt or equity finance. But deciding which is best for them is not easy. The availability of finance also varies across the country. It is one of my ambitions for the Small Business Service that we help overcome these problems.’
speaking at the launch of the SBS, 3 April 2000