11 December 2015 13:00
Business Growth Service to wind down
The Government's Business Growth Service - which includes Growth Accelerator and the Manufacturing Advisory Service - is to close in April 2016, despite the fact that it has a 94% approval rating rating from businesses.
The news has come as a shock to many, not least because George Osborne failed to mention the plan in his Autumn Statement.
The Business Growth Service (BGS) has worked with more than 18,000 businesses and helped SMEs raise more than £100m in finance.
According to the Department of Business, Innovation and Skills (BIS), the closure will save £84m.
As of this month, the service will not be available to new customers but any existing contractual commitments will be honoured as long as the activity is completed by the end of March 2016.
Small Business Minister Anna Soubry said:
"The most important way we can help small businesses is to continue to secure a strong, growing economy and that's exactly what this Government is doing. We'll keep cutting red tape and have extended small business rate relief for an extra year, freeing up small firms to do what they do best."
She added: "Where taxpayers' money is used to provide support, this is best done at the local level, which is why we're providing further funding to Growth Hubs and away from Whitehall."
BIS is investing £12m per year into 39 local growth hubs led by Local Enterprise Partnerships.
Emma Jones, founder of Enterprise Nation, commented:
"The support and advice that today's business owner needs does not need to be supplied directly by Government. In our view, the role of Government is to set the conditions of growth: confidence in the economy, decent broadband, good travel links etc, and then let small businesses get on with what they do best."
The announcement comes as new data suggests that business growth in the UK is faltering after two quarters of record highs. According to the latest quarterly barometer from the Chartered Institute of Credit Management (CICM), confidence has fallen in both manufacturing and services.