Ministers have spent £3m on Gordon Brown’s pledge to streamline the £2.5bn-a-year business support system, but so far made fewer than 10 of the promised 2,900 cuts to schemes.
After 21 months of work on the prime minister’s 2006 promise to reduce the number of schemes from 3,000 to 100 by 2010, only a handful of low-profile products have been axed.
The Department for Business has instead drawn up an “initial portfolio of 18 high-level business support offers” – generic titles under which to group support products. Even this is not finalised. Further work was needed to “refine the portfolio,” with a “full policy framework” promised in the spring, officials said.
The government spent £3m on “staff and communications” on the business support reforms in 2007, with £1m spending planned for both this year and next. Officials said the cost represented principally the “time spent by people working on the simplification of business support in many different organisations”.
The Conservatives will challenge ministers after parliament returns next week over the “very slow progress”. Mark Prisk, the shadow enterprise minister, told the Financial Times he would be writing to ministers to highlight concerns over the government’s “tinkering” with the system. Mr Prisk lambasted the work done to date as a cosmetic exercise, saying: “Business will be deeply disappointed. They were promised real reform but instead this is a rebranding exercise.” The Tories intend in the spring to publish a rival plan for business support, based on a review headed by Doug Richard, the venture capital investor.
Business is supportive of the principle of tackling the complex system, which survey evidence suggests small companies in particular find difficult and expensive to use. The British Chambers of Commerce said it was right to try to reform a system “beset by waste and duplication, [which] is a massive source of frustration for businesses”.
But small business organisations appear sceptical about the extent to which ministers can solve those problems. David Frost, BCC director-general, warned the government’s proposals “will not necessarily bring about the step change in support that is needed. Support needs to be focused on the interests of business and not suppliers and this will require a massive commitment”.
The CBI employers’ group, which is closely involved in the work on the reforms, said the Department for Business was “making a good effort” at an “horrendous task”.
To achieve the promised change, ministers have to persuade local authorities, regional development agencies and other local bodies over which they may have few sanctions to agree to cull schemes. The task is complicated by coinciding with reviews of regional government.
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