Business Growth Service to come to an end following Spending Review's 17% cut in BIS budget
4 min read
30 November 2015
Following chancellor George Osborne's Spending Review, the Department for Business, Innovation and Skills (BIS) has announced that the Business Growth Service (BGS) will soon come to an end.
The BGS has helped some 9,700 businesses to date. However, BIS started contacting customers about its service closure on Friday.
Most recently, a notice was posted on the Growth Accelerator website – one of the initiative’s part of the BGS – that it would stop taking on new customers from the end of November and would officially be ending 31 March 2016.
Its website further said: “On 26 November 2015 the Department for Business, Innovation and Skills issued a formal instruction to providers of the Business Growth Service: Not to enter into any further contractual commitments with customers after 23:59 Monday 30 November, that all contractual commitments should be honoured, as long as all support and related activity is completed by 31 March 2016.”
BIS is also set to axe the Manufacturing Advisory Service.
The move is part of the 17 per cent cut in BIS’ budget, which was announced in the chancellor’s Spending Review.
A BIS spokesperson said: “In the last parliament we responded to concerns that small businesses couldn’t find the support they needed. Since then we have funded the creation of Growth Hubs and by April 2016 there will be 39 of them providing support to businesses across England.”
Read more from the Autumn Statement and Spending Review 2015:
- 26 enterprise zones created or extended
- Free childcare entitlement to double from 2017
- Small firms to have digital tax accounts as part of £1.3bn HMRC reform
It suggested that the Growth Hubs would be given full ownership of supporting small business in local areas. These hubs, according to small business minister Anna Soubry, would receive £12m in 2016 and £12m in 2017.
She 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.
“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.”
It is thought that the government’s Help to Grow scheme, run by the British Business Bank, will take on the finance elements of BGS.
The bank is currently seeking delivery partners for a £100m pilot. BIS added that the British Business Bank will create a fund of over £400m with Local Enterprise Partnerships in the North West, Yorkshire & the Humber and Tees Valley to invest in smaller businesses.
Emma Jones, founder of Enterprise Nation, said: “The closing of the Growth Accelerator scheme shows that the government clearly expects the private sector to take over its small business support function.
“We’d like to see funding for such schemes come directly from big business and make sure they are directed at the next generation of startups for the good of the British economy as a whole.
“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.”