Supporting SME's - the lifeblood of our economy

Matthew Hancock, the Skills and Enterprise Minister has eloquently referred to SME's as the "lifeblood of our economy" and he is supporting this statement by being at the forefront of the Government's plans to increase support for SME's. 

Mr Hancock shared the first step in the Government's 'SME strategy' at the 40th anniversary conference of the Federation of Small Businesses (the "FSB"); a plan to establish 20 business schools with the overarching aim of establishing a 'Small Business Charter'. The business schools will be established as institutional support mechanisms assisting SME's that fall within their respective geographical regions. 

A barrage of announcements followed, in an attempt to convince the audience (and general SME community) that more initiatives are in the pipeline, including a £1 million technology and design competition targeted at small, innovative businesses and two new Entrepreneurs in Residence, aimed at assisting the Department for Business, Innovation and Skills with forming SME policies going forward. 

The Government has turned its attention to creating a stronger relationship with the SME community, in recognition of the importance of increasing SME activity in aiding gradual economic recovery. Overall, this is good news for SME's based within the UK as they now have a 'voice' and are free to express their views on how the Government should be supporting them. 

To further reinforce the Governments' focus on transparency in relation to SME's, George Osborne has declared a new consultation based on plans to require lenders to disclose information of SME's that have been refused financial support, in order to allow alternative credit providers (such as First Enterprise in Nottingham) to identify and approach the SME's requiring financial support. 

The national chairman of the FSB, John Allan, supported the new measures introduced by the Government and emphasised the importance of forging a mutually beneficial collaborative effort between SME's and the Government to fuel growth for small companies, maximise expertise through the utilisation of 'business schools' and focus on making the avenues of support available to SME's transparent and easily accessible. 

The Government is now taking steps to develop a support-based infrastructure for SME's in order to nurture smaller businesses with little or no external support, encourage transparency in relation to lending and developing a sense of unity amongst SME's throughout the UK. 

Whether this latest Government strategy designed to strengthen our economy and take advantage of the previously neglected SME sector will be successful in practice remains to be seen, but it is definitely a step in the right direction. 

Further Information 

If you have any questions or require specific advice on any matter discussed in this publication, please contact Kay-Leigh Keen (T: 01332 225 279 or E: kay-leigh.keen@smithpartnership.co.uk) or Balraj Kang (T: 01332 225 416 or E: balraj.kang@smithpartnership.co.uk). 

Balraj Kang (Trainee Solicitor), Company & Commercial Department, Smith Partnership