A £350 million government package to help small and medium-sized companies weather the downturn and boost training won a warm welcome from business leaders in the West Midlands.

Skills secretary John Denham said the money will help SMEs put staff through short courses designed to boost productivity. He also announced measures to cut bureaucracy and delays in accessing funds under the Train to Gain scheme.

The measures reflect a renewed emphasis on the importance of SMEs to the economy as recession begins to bite.

“Small businesses are an important engine of our economy and we must make sure that we support them through tough economic times,” Mr Denham said.

“We are overhauling the training system to make sure that they can get help with training their staff with the very minimum of bureaucracy.

“We know that firms which invest in skills do better than those that don’t.”

Birmingham Chamber of Commerce and Industry (BCI) said it had been anxious to see the Government to show a determination to maintain its commitment to tackling the long-term challenges to the region’s economy.

Chief executive Jerry Blackett said: “We’re delighted the Government has not been blown off course by the current economic challenges. This new commitment will help maintain the turnaround in skills achievements we have seen over the last couple of years.

“The new ability for workers to study accredited modules relevant to their particular need and to not always need to complete a full qualification, is extremely important.

“For many years now, workers and employers have been frustrated at the lack of this flexibility. Introducing it now could not be more timely. “Given the importance of the West Midlands improving its productivity levels we must do all we can to encourage our local businesses to invest in the skills of their people. The package announced by John Denham will help us do that in a significant way.

“In difficult economic times, the quality of leadership and team management skills becomes even more acute. So the extension of the funding to encourage even more take up of leadership and management training makes an awful lot of sense.

“It is now the responsibility of businesses and their representative organisations to ensure we take full advantage of these improvements.

Mr Blackett also praised the Government’s drive to ensure that public sector organisations pay their suppliers within ten days.

“The Government quite rightly identified late payments as a major difficulty for SMEs and a threat to their future.

Peter Mathews, president of Black Country Chamber of Commerce, said: “SMEs are the backbone of the British economy and if this country is to come out of this downturn as quickly as possible it is important small firms get as much help and support as possible.

“We are well aware of the skills shortage here in the Black Country and the West Midlands as a whole and it is good to hear the government is planning new strategies to help businesses invest in their own staff.”