March 24th, 2015.
The Small Business Scheme: One Year On
Fourteen months ago, a brand new government service was announced with the aim to invest a huge £30 million into small business schemes across the UK. But just after a year has the scheme fallen flat ahead of the final hurdle?
A Boost for Small Businesses Announced
In January 2014 the Government launched their growth voucher programme which promised to spend £30million on boosting 20,000 eligible small businesses. The money was set aside to provide these SMEs with advice and services to help them develop, grow and eventually maybe even help the local economy.
Companies with less than 250 employees were eligible and if successful they would receive a voucher for up to £2,000 to spend on business advice. The recipients were chosen at random from a list of applicants and would be required to match the voucher value to pay for half of the cost.
At the time the coalition said this was “a pioneering programme to help support 20,000 small businesses get the advice they need to achieve their growth potential”.
And the Department for Business Innovation and Skills (BIS) commented:
“This £30m programme will provide an immediate cash injection of up to £2,000 for eligible small businesses to gain professional business advice in areas such as marketing, recruitment and finance.”
Falling Short of a Promise
Despite the good intentions, now just days before the scheme ends, only £3.6million (12%) has been handed out in the form of 2,132 growth vouchers, and £1.2million worth of advice and guidance. And it is very unlikely that much more will be handed over before the deadline. So what happened?
Well, a progress report found that many companies were receiving the vouchers but not redeeming them due to financial instabilities. After the publication of this report, the BIS said:
“There are still 5,694 vouchers in businesses’ possession worth £11m that are yet to be spent and we will continue to distribute vouchers through to the end of March when the programme officially closes.
“Evidence gathered from this demand-led research programme will help us develop better business support schemes in the future as well as helping businesses decide what type of advice they need to grow.”
So, if this was an experimental scheme does it mean we can write it off as a fail? Maybe it should simply be marked up as experience? The BIS first stated they needed 19,000 firms to have a business needs assessment to produce ‘robust evidence’ for their research, which was then reduced to 12,000. But with more than 20,000 companies made eligible this number was well surpassed. So it wasn’t a total waste.
Find Business Funding You Can Rely On
Although these government business funding schemes may benefit thousands of companies across the country, as we’ve seen in this case, they aren’t always the most reliable source of funding.
Find business finance that you can rely on by enlisting the services of our experienced commercial finance brokers.
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