SMALL companies must be given a better chance of winning government contracts and more should be done to promote business support schemes, according to the Prime Minister’s adviser on enterprise.
Lord Young of Graffham, who served as one of Margaret Thatcher’s trade and industry secretaries, will this morning tell David Cameron at Downing Street that small firms don’t have the time or staff to fill in the complicated questionnaires required before being allowed to bid for public sector work.
In his second report on small firms, Growing Your Business, Young backs the introduction of the “growth voucher scheme” unveiled by Chancellor George Osborne in the Budget, which will help firms to buy advice.
Young said: “We have one of the best environments in the world for the creation of new firms. What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow.
“Growing our smallest businesses would transform our economy – they are the vital 95 per cent. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero.
“We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”
Hayley Conboy, CBI principal policy adviser for enterprise, said: “Lord Young rightly identifies that the UK government needs to earmark funding to effectively market existing finance and support schemes.”
He said most firms didn’t know what is available, so the new Business Bank will play a crucial role in raising awareness.
He added: “We support the recommendation to open up more government contracts to smaller firms by cutting out the requirement for them to complete a pre-qualifying questionnaire, as most smaller firms don’t have the capacity to handle this.”
Adam Marshall, director of policy at the British Chambers of Commerce, added his weight to the campaign, saying the focus now had to be getting the proposals off the ground “so they can actually make a real difference to the business community and, in turn, drive the recovery”.
Young’s report also recommends that university business schools should “play a larger role in the local economy, “supporting local SMEs as advisers and providers of highly-qualified graduate employees”.
Professor Angus Laing, dean of the school of business and economics at Loughborough University and chairman of the Association of Business Schools, said universities were already supporting small businesses.
Laing, a previous head of Glasgow University’s business school, said: “We need to harness the best of this work so small firms recognise and benefit from what we and others can offer.
“We want to get to a point where small firms recognise business schools as ‘go-to’ resources in key areas of management and leadership skills.”
The latest report follows on from Young’s first study, Make Business Your Business, which was published in May 2012.