GPSJ Autumn 2024 ONLINE - Flipbook - Page 34
GPSJ
FINANCE & INVESTMENT
Empowering SMEs: How Local Authorities
Can Foster Growth and Innovation
By Steph Gemson, Director, TaxGem
Small and medium-sized enterprises (SMEs) are the bedrock of the UK economy, comprising 99.9%
of all businesses and employing millions of people across the nation. With over 5.6 million SMEs,
these companies are key drivers of innovation, job creation, and local economic growth
knocked back multiple times, costing
us both time and money. LA’s could
potentially alleviate this by appointing
experts within council teams to guide
SMEs through planning applications
and other regulatory processes,
helping businesses navigate these
hurdles more efficiently.”
“Streamlining policies and
regulations, especially those related
to business expansion, will create a
more business-friendly environment.
Councils can also consider “virtual
hubs” or pop-up advice centres to
provide direct access to guidance
on navigating local regulations.”
3. Skills Development and
Training Initiatives
Steph Gemson, Director,TaxGem
This article explores practical ways
local governments can support
SMEs, addressing core challenges
and offering actionable solutions
that foster growth, innovation, and
sustainability. Drawing on insights
from Steph Gemson - a qualified tax
advisor and founder of TaxGem, this
article highlights five key areas where
councils can make a significant
difference.
asked about funding opportunities,
and the fact that people are asking
means the information isn’t readily
available,” says Steph. “This
indicates a need for better outreach
and education. Local governments
should maybe consider creating
centralised portals and conduct
workshops or webinars to inform
SMEs about available funding,
simplifying the application process.”
1. Streamlined Access to
Funding and Resources
2. Business-Friendly Policies
and Regulations
One of the most significant
challenges facing SMEs is the lack
of access to capital. According to
recent data, 20% of UK SMEs fail
within their first year, and 60% close
within their first three years, often
due to insufficient funding. Local
authorities can help close this gap
by improving access to government
grants, low-interest loans, and other
financial resources.
Steph Gemson, highlights that
many SMEs are unaware of available
funding options. “We regularly get
Navigating the complex regulatory
environment is a common complaint
from SMEs, with 50% reporting that
local council policies impede their
growth. A major source of frustration
is bureaucratic red tape, particularly
around planning permissions and
other business-related approvals.
For example, SMEs looking to
expand or develop new premises
often face prolonged delays and
high costs due to complicated
planning processes. As Steph
mentions, “We’ve had plans
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GOVERNMENT AND PUBLIC SECTOR JOURNAL AUTUMN 2024
years.
Steph recalls her own experience,
saying, “One of the first things
we did after moving into our
building was to go door-to-door,
introducing ourselves to other
businesses. Networking is a lowcost, high-impact way to promote
your business and build valuable
connections. LA’s can support this
by organising networking events
or virtual mentorship programmes,
where business owners can meet,
share ideas, and learn from each
other.”
5. Reducing Taxation
4. Networking and Mentorship
Programmes
Finally, taxation remains a significant
challenge for SMEs, particularly with
flat tax rates that disproportionately
affect smaller businesses. Local
authorities can ease this burden by
offering reduced business rates,
tax holidays, or flexible payment
terms. This would allow SMEs to
reinvest in their growth rather than
being hindered by excessive tax
obligations.
As Steph explains, “The thing
we often see as a stumbling block
for businesses, is business rates
on second premises. Generally
speaking, entire business rates relief
is applied if the rateable value of the
premises is less than £15,00 per
year. But if you take on a second
premise, then the small business
rates relief applicable to that second
premises is only around £2,000 to
£3,000.
It’s not feasible to suggest that a
business should have a rateable
value of less than £2,000 pounds
per annum so as soon as you
occupy a second site, you’re into
the realms of business rates. This
can be a huge expense and quite a
hindrance to a small business and
ultimately stunts growth. Reducing
these taxes would allow SMEs to
expand more freely.”
Mentorship and networking are
critical to the long-term success
of SMEs. Studies show that
businesses with mentors are 70%
more likely to survive beyond five
By taking proactive steps, councils
can drive regional economic
development, ensuring that SMEs
continue to innovate, grow, and
create jobs.
Investing in skills development
is critical for SME growth, but
training costs can be prohibitive.
The average apprenticeship costs
businesses between £4,000 and
£7,000, while training for existing
staff can exceed £2,000 per
employee. This financial burden
often prevents SMEs from upskilling
their workforce, particularly in critical
areas like digital skills.
Steph Gemson notes, “We’ve
struggled recently to find good
applicants for our accountancy
apprenticeship, even though it’s a
solid career path. Connecting SMEs
with potential apprentices earlier,
perhaps through school workshops,
could make a big difference.”
“LA’s can bridge this gap
by offering subsidised training
programmes and partnering with
educational institutions to provide
affordable training solutions.
Encouraging collaboration between
local businesses and schools
or colleges can also help attract
apprentices and improve the skillset
of the local workforce.”
