Skills gaps are stifling small businesses, SBC warns

The Small Business Council (SBC) has asked the Government to address 'critical skills gaps that are leaving the UK's 3.5 million small businesses struggling to grow' in its annual report.

The Council, an independent advisory body set up in May 2000 to advise the Government on the concerns of small businesses, suggested all regions develop a regional 'skills intelligence unit' to identify employers' requirements and enable employees to skill according to local job opportunities.

It also warned against the Government's ingrained culture of using regulation to solve 'all policy objectives on small business issues.'

The Council called for consultation with business to take place at an earlier stage of policy development to try to encourage alternative approaches to legislation. It advised: 'When a decision is made to legislate, the "unintended consequences" of the legislation should be identified to try to minimise negative impact on small firms, which are hit disproportionately hard by red tape.'

William Sargent, Chair of the Small Business Council, said: "We believe that the Government does have good intentions, but these are undermined by a lack of awareness of business needs, poor co-ordination between departments and in particular an ingrained culture of using regulation to solve any perceived problem.

"We do detect a positive culture change developing in certain parts of Whitehall, but it remains the case that Ministers and civil servants achieve more kudos for creating new regulation, than for improving or removing the legislation that is already in place.

"Consultation is not a one-way street and business people should not just sit back and expect the Government to sort everything out for them. Small firms must be available to explain how Government policy will affect their business and, in particular, to support UK negotiators in Brussels. This is one of the reasons we are recommending a two stage litmus test to bring Government and business together at a much earlier stage in the policy process."

The report featured 23 recommendations to Government, focusing on: skills, regulation and access to finance.

Last year, the Government agreed to take up 17 of the Council's 22 recommendations, either in full or in part.