West Midlands businesses need help if they are to get through the months ahead, the leader of the region’s company directors has warned.
Richard Boot, West Midlands chairman of the Institute of Directors, said that the measures announced by the Government to help small businesses were welcome but given the extent of the potential economic downturn they did not go remotely far enough.
“We are not convinced that the £350 million the Government has allocated to small business training is new money.”
He said that while support for training was critical, particularly in the West Midlands, the Government needed to implement changes that had an instant impact on business if it was to assist what might become a large number of companies in the West Midlands coming under severe pressure.
“What companies need today is help with issues such as cashflow, which will determine whether they survive or not,” he said.
Last week the Government announced a package of measures to help small business including a commitment by central government to speed up payments to suppliers as well as putting pressure on banks to begin lending to small business again.
Mr Boot said there was no single simple solution and he called for a multi-pronged attack on factors hitting business and in particular for public sector bodies to accelerate major projects to boost workflow and employment.
“Bringing forward schemes to energise the local economy is tangible and of direct impact.
”We need action on cashflow, delays or scrapping of employment legislation that will hinder job creation and retention and we need urgent action to kickstart the housing market, particularly at the lower end.
“Saying the authorities should be flexible on cash collection is not alone sufficient and indeed can be unfair on those companies who do strive to pay their way. An across the board and simplistic deferral scheme for those who meet pre-determined criteria would help for both VAT or NI payments.
“We need to look again at how big companies and local authorities pay their bills but smaller businesses also have a challenge to make sure they get their documentation and invoicing straight.
“And while we welcome the Government’s renewed attempt to tackle the problem of late payment to small businesses by public bodies, we regret that the equally large problem of late payment by large companies has been overlooked,” he said.
“If the Government wants to make a real difference to small businesses it needs a much more radical strategy. It should start by abandoning implementation of all its current employment law proposals.
“Plans to expand the right to request flexible working and create a new right to request training would impose significant administrative burdens on small businesses and create uncertainty at the worst possible time.”
And he warned that equally radical action was required to rescue the housing market.
“More radical action on stamp duty should help with deposits but there is also scope to develop schemes where the Government steps in and helps young homebuyers with deposits.”