The history of government support for businesses
25 years ago the Thatcher government of the mid 1980s took heed of research that repeatedly
showed the UK's businesses ranking no higher than 20th in the league table of international
SME competitiveness. This was restraining employment and export growth. Further reserach
showed that SME owners were not prepared to pay for advice in order to improve their knowledge
and skills.
Government policy was evolved that would invest in raising SME business skills and knowledge
through subsidised consultancy and that the good practices developed as a result would be
disseminated to all other businesses as examples to follow.
So, in 1987, the Enterprise Initiative was launched, which aimed to help SME owners improve
performance in marketing, finance, systems, business planning and quality, by using expert
consultancy advice with 2/3 funding support. This ran until 1992.
Business Links were formed in 1993 to follow this and focused on similar services but for very small
businesses and start-ups; again, with 2/3 funding support for expert consultancy advice.
Government has now announced the end of Business Link (July 2010)
When Training & Enterprise Councils (TECs) were formed in 1991, they instead, focused on
developing skills as the solution to better business performance and introduced fully funded
programmes such as Business Growth Training and Investors in People, delivered by independent
consultants and trainers.
TECs were replaced in 2001 by the Learning & Skills Council, which shifted towards funding
individual skills improvement via Business Link and the education system for the person. Examples
of this were Train to Gain (for employees) and Leadership & Management (for Directors).
The Learning & Skills Council was split up in early 2010 and the new government has announced
major reductions in Train to Gain and Leadership and Management programmes.
Thus, the 23-year run of government grants to support small
business performance improvement has come to an end
This major shift has yet to be fully understood and accepted and has left an overhanging culture
amongst businesspeople that if there is a requirement to spend money on consultancy or training,
there must be a grant somewhere.
The reason for this is that despite all the £billions spent on business grants, no government ever
followed through with the intended good practice dissemination. In fact, so great was the targeting
to spend the money that it became the end instead.
However, we believe that so much good has been done by grant support that the SME owner of
today is a far more savvy individual than his 1980s predecessor.
We cannot reintroduce grants, but we can put our money where our mouth is and undertake that
for every client, or prospective client, who is concerned about project cost we will construct and
deliver their programme to be self financing.
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