Government has ‘too many SME initiatives’

'Government initiative-itis': Finance Yorkshire's Alex McWhirter says inundating business owners with new initiatives is counter productive.
'Government initiative-itis': Finance Yorkshire's Alex McWhirter says inundating business owners with new initiatives is counter productive.
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A YORKSHIRE investment chief has slammed Government bids to aid Small and Medium Sized Enterprises – accusing it of suffering from “initiative-itus.”

Alex McWhirter, chief executive of leading regional investor Finance Yorkshire, says the Government is so busy launching new initiatives that it is failing to ensure they reach and benefit the businesses they’re designed to help.

Mr McWhirter was responding to a new survey of entrepreneurs by international law firm Nabarro and leading Sheffield-based independent accountancy firm Barber Harrison & Platt.

The survey showed that the region’s SMEs feel that the Government is launching too many initiatives to be effective and that they do not hit the target.

Mr McWhirter said: “Entrepreneurs are telling me they don’t know what is going on in terms of Government aid and advice, which concurs with the findings of this year’s survey.

“The Government needs to reduce the number of new initiatives it is launching and to work harder on the main ones to ensure they reach entrepreneurs more clearly and usefully. Inundating business owners with new initiatives is counter-productive and really our entrepreneurs should be better-placed to benefit from Government assistance.

“There are so many things put out by the Government but not properly communicated or coordinated – initiative after initiative – that it’s a case of the Government having ‘initiative-itis’. Entrepreneurs are not saying what the Government is trying doesn’t work, they’re saying they can’t understand it to see if it works because they’re drowning in a sea of proposals and schemes.”

Nabarro partner Ben Hendry said: “A ‘one size fits all’ approach to funding will not work.

“The survey shows that Yorkshire SMEs have specific characteristics, such as little appetite to raise finance to fund growth or to take advantage of tax breaks and other Government initiatives. The fact is that initiatives have to be tailored to meet our region’s specific needs.”

The Nabarro/BHP survey found two thirds of SMEs in Yorkshire hadn’t heard of the Government’s initiatives, two out of five were not aware of mentoring campaigns and only one in 20 had received any Government export support through UK Trade and Investment.

Funding appears to be less of an issue for SMEs than it was last year.

When asked to highlight their main concerns for the coming year, 27 per cent said access to funding – down from 44 per cent in 2011.

BHP partner Lisa Leighton said: “When asked if they had tried to borrow new money from a bank or other sources, whether they were successful in obtaining funds and what those funds were for, the responses were quite startling.

“Only 24 per cent of businesses had tried to borrow new money from a bank and of those 63 per cent were successful in obtaining the funds, though only half wanted it for growth, with the other half citing the restructuring of existing debt or to assist with poor cash flow.

“So the findings show there is little appetite for raising finance to fund growth plans. Confidence needs to be restored if businesses are going to invest for growth.’’