New small business fund to boost UK economy by £100bn

The new £8m Business Basics Fund will help support small businesses’ earning power, as part of the industrial strategy.

In a speech to the CBI, Small Business Minister Andrew Griffiths will unveil a new £8 million fund to boost the productivity and performance of small businesses in England.

As a small business accountant, Accounts and Legal welcomes this new boost to the small business community, particularly as High Street banks appear to be increasingly opposed to lending to smaller enterprises.

While the new funding pot is a positive, putting this money to optimal use requires a strategy and the guidance of an expert.

To satisfy this, we have recently launched a business coaching package, designed specifically to boost your profit margin and give you an edge over competitors.

Embracing technology to boost the economy

Research from the CBI suggests that by encouraging more businesses to take advantage of leading technologies, management practices and business support services – such as cloud computing, mobile technology and e-purchasing – the UK economy could receive a £100 billion boost and see a 5% reduction in income inequality.

The Business Basics Fund, run by BEIS in partnership with Innovate UK, will help businesses, charities, trade organisations and public sector organisations support small businesses in adopting tried and tested technologies and management techniques.

Once the projects are launched, the government will then work with leading experts to evaluate the effectiveness of each project in boosting productivity, helping to inform future policies.

Small Business Minister Andrew Griffiths said: “Small businesses are the backbone of our economy, with more than 1,000 new businesses starting up every day, and it is vital that we support them to grow through our modern Industrial Strategy.

“The Business Basics Fund will test new and innovative ways of supporting small businesses to take advantage of technologies and management practices – giving small business leaders the tools and support they need to continue to thrive.”

Matthew Fell, CBI UK Chief Policy Director, said: “Put simply, UK businesses must do more to improve their productivity to get themselves match fit to compete globally in the years ahead. Low uptake of the nuts and bolts technologies of today is a key feature of the productivity puzzle that can, and must, be tackled.

“UK business technology adoption levels are close to the EU average but far behind the front runners, lagging nearly a decade behind the Danes.

“The new Industrial Strategy can be the perfect vehicle to get to grips with this missing piece of the jigsaw.”

Geoff Mulgan, Chief Executive of innovation foundation Nesta, said: “I welcome the launch of the Business Basics Fund, and the commitment to using experiments.

“Nesta has advocated and run experiments in business support across the world through our Innovation Growth Lab which has worked with a dozen governments.

“With this move, the UK is taking a lead in applying experimental methods to boosting productivity – much the best way of ensuring that in the long run public money goes on programmes that really do work.”

The launch of the fund is the latest in a number of new measures introduced by the government to boost business productivity, including a review launched last month on how best to raise business productivity.

The Business Productivity Review call for evidence is open until 6 July 2018 and the government is encouraging workers, businesses, trade associations and other interested parties to contribute their views to it.

In 2017 Be the Business, an industry-led initiative backed by government, launched to help businesses across the UK benchmark their current level of productivity, access advice and utilise smart management training.