Growth Britain – unlocking the potential of our SMEs, which was published by Dods, the political publishing house, and sponsored by Santander UK, gathered research from three policy workshops to understand more clearly what support was most needed.
Topping the list of priorities, 79 per cent of SME firms said that reducing tax burdens should be the government’s main focus to help the sector.
Aside from tax relief, there were additional requests for a more bespoke tax return system. According to the report, the survey’s participants, “lamented the complexity of the existing tax system, noting that it was especially burdensome for smaller firms that often lacked the specialist knowledge required to navigate it”.
The second biggest preference for SMEs concerned the recruitment of skilled graduate trainees or apprentices, which was favoured as a priority for over half of the firms surveyed.
New staff took preference over developing the skills of existing management teams, with only 40 per cent of respondents claiming that this could have a positive impact on growth, although the research also noted that just one in eight recent graduates preferred working for SMEs.
The study also focused on access to finance amid growing concerns of an increased lack of credit since the recession began. This featured as the third biggest concern for SMEs, with 28 per cent citing access to finance as pivotal to influencing growth.
The report concluded that some businesses lacked the confidence to approach banks, or believed banks were not prepared to take on an adequate proportion of risk, before adding that a more personal relationship should develop between banks and businesses.
Rather than placing the responsibility just with banks, the report also indicated that access to finance would improve by increasing the availability of alternative sources of funding. However, according to the poll, traditional unsecured and secured bank loans are still the preferred option, with the former being rated most popular.
Steve Pateman, head of UK banking at Santander UK, said: “This research project puts the focus on this cohort of businesses to ask what needs to be done to help unlock this potential and encourage these businesses to act and go for growth now.
“If this potential can be realised, these businesses will prosper and, in so doing, create jobs and wealth, and maintain the momentum of the recovery.”
Other areas the report covered included exports and available guidance and support channels, which were reported as being abundant, but not always easy to navigate.
Adviser comment: Duncan Glassey, founder of Edinburgh-based Wealthflow, said: “I think the government should create a separate entrepreneurial bank, because banks appear incapable of giving entrepreneurs advice. Bankers in the UK have not got a clue how to quantify risk and the government doesn’t understand small businesses, which means stifling all that positive entrepreneurial energy.”