Rishi Sunak’s scheme to boost the productivity of British small and medium-sized enterprises (SMEs) post-Covid has hit just one per cent of its target since it was launched last July.
The government wants 30,000 businesses to complete the Help To Grow management scheme – which offers subsidised business training – however just 402 SMEs have finished the programme, according to research compiled by Labour.
Government figures show 1,270 business leaders have signed up for the scheme, which sees businesspeople offered courses in things like financial management, marketing and employee management.
The Federation for Small Businesses (FSB) told City A.M. that the slow take-up was partly due to its criteria being too strict and that all businesses with two employees should be able to access it.
Currently, SMEs must have five employees to enroll.
Seema Malhotra, a Labour shadow business minister said: “British firms are crying out for help in the face of rising prices and inflation, yet all Rishi Sunak has delivered is an extension to piecemeal schemes that aren’t working and are stunting economic growth. It is clear the Help to Grow Management scheme is failing to deliver.
“Small business need a government on their side willing to take the steps needed to grow our economy.”
Low productivity growth has been a serious drain on the UK economy since the 2008 financial crash.
The UK has among the lowest rates of productivity growth in the G7 since 2008, with successive chancellors trying to overturn this.
The £520m Help to Grow scheme was described by Sunak when it was announced in the March 2021 Budget as a way to ensure SMEs “are embracing the latest technology and management training [and] fuelling our Plan for Jobs by boosting productivity in all corners of the UK”.
There is also a digital stream, to help businesses buy new technology, however no figures have been released by the government on its take-up.
The government is aware of the shortfall in demand, with the Financial Times reporting last month that business secretary Kwasi Kwarteng had written to firms to encourage them to tell smaller companies in their supply chains to sign up to the scheme.
A Whitehall source said the government will “continue to develop and scale” Help to Grow to try and attract a larger take-up.
A spokesperson for the British Chambers of Commerce (BCC) said the take-up figures for the scheme were “disappointing and we would encourage the government to extend the timescale” for SMEs to enroll.
FSB national chair Martin McTague said: “Help to Grow: Management is a great route through which small businesses can improve internal processes and productivity to the benefit of the wider economy.
“We’ve recommended [The Department for Business, Energy and Industrail Strategy] expands the eligibility criteria for the scheme to those with two employees, rather than the current five. We also think there’s a case for reducing the participation fee to £250, from the current £750.
“Micro businesses do not have the big HR and training budgets enjoyed by large corporations at the best of times, and they’re currently coming out of Covid trading restrictions into an energy crisis.”
A government spokesperson said: “Our Help to Grow schemes are giving small and medium sized businesses across the UK the tools, funding and support to thrive.
“Feedback from participating business leaders has been very positive so far, and we urge businesses to sign up if they haven’t already to learn how to reach new customers, boost profits and expand.”