Levelling Up, Shared Prosperity Fund (SPF), Investment Zones, and the mantra ‘Growth, Growth. Growth’. What does this all mean for small businesses at the tail end of 2022?
First up is the future of Levelling Up. At the recent Institute of Economic Development Conference, we heard from Andrew Carter from Centre for Cities about what is likely to happen to this important White Paper. Despite having three Ministers over the last few months and a seeming lack of direction from the current Government, he argues that for 100 years we have tried to spread the nation’s prosperity more evenly and whoever is in charge over the next couple of years will have to tackle the issues contained in this report.
Tied in with this is the allocation of SPF. It is supposed to replace the old European Regional Development Fund (ERDF) as well as the European Social Fund (ESF). In 2014-20, the UK received almost £7 billion in funding from ERDF alone. In the 2021 Autumn Spending Budget the Government pledged to invest £1.5 billion per year by 2024/25. However, there is some concern around how soon this funding will come on stream. So far this year, there have been very few successful bids and there is growing concern around how and when it will actually be allocated.
Instead, in the recent Budget by the new Truss Administration, it was announced that there would be 38 new Investment Zones. Here, the successful local authorities will benefit from wider support to local growth. However, we do not currently have any timeline around when these will start.
We have also learnt that there will no longer be a Small Business Minister. Paul Scully has been replaced by Dean Russell who is now Minister for Enterprise and Markets and has small business as one of his 16 portfolio subjects.
All of which leaves a very fragmented and uncertain businesssupport landscape. Local authorities, Growth Hubs and LEPS are all fighting over scraps, there is very little clear direction from the Government about the future of Levelling Up or UKSPF and in the meantime, thousands of business owners are struggling with an increasingly difficult business landscape. Indeed, company insolvencies recently hit a 13-year high.
There is a real concern that there just won’t be the level of small business assistance required, due to the current administration’s focus elsewhere. Instead, many enterprise support organisations may have to look at other revenue streams in order to balance the books and ensure a continuity of
service.
At the same time, local authority economic development teamswill continue to keep their eyes peeled for one of the scores of funding rounds being offered by the Government, including UKSPF.
None of which adds up to much of a growth strategy, in our view.