The new Centre for Cities policy briefing looks at state funded business support in the UK and reveals that current system needs simplification and re-structuring.
In 1998 if a small firm wanted to get advice it couldn’t get from its banker or lawyer, it would likely go to the local Business Link office. In 2008 it would probably reach out to its RDA. Today neither of these exist. Whilst the quality of Business Link and the RDAs across the country was patchy, they at least gave an overly complicated business support landscape a structure that helped businesses find their way around it.
As our briefing shows, today there is hardly any geographical or service structure or hierarchy to the state funded business support system. There are hundreds of support schemes nationwide, delivered by at least four government departments, an array of non-departmental bodies, quangos, special purpose vehicles, and local authorities.
Large public sector schemes that use a multitude of tools coexist and often compete with focussed initiatives; many of them have similar objectives (see figure 1), and coordination between them is often inconsistent. Overall, whilst there is hardly a lack of support out there, the system is so complex and fragmented that it is difficult to navigate, manage or even identify gaps in it; the parts add up to less than the whole
Selected national business support schemes structured by objective
So, where do we go from here? A recent roundtable we organised discussed this very question and highlighted several important issues. First of all in order to improve the current system we need to rethink the role of the public sector and find new ways to define the purpose of its intervention. Secondly, we also need better management and incentive structures that will ensure coordination between public sector schemes. And finally we need to agree the right balance between national schemes and local support that needs to be tailored to the specific needs of businesses in certain places.
Specific suggestions that emerged during the roundtable included re-establishing the BusinessLink website and brand as a visible first point of contact for businesses, and making sure that successful local support schemes are made available to all UK businesses, no matter where they are located.
The roundtable also raised a set of existing and new questions that need to be answered; . How do we best ensure the quality of support? How can we deal with the lack of trust between businesses and public sector? Will the new policy initiatives such as the Business Bank, City Deals and Heseltine proposals improve the system or just add a new layers of complexity? The debate continues. We will return to these and other issues in the near future
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