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Labour has accused the government of abandoning small businesses after it emerged ministers are well short of their target to recruit 40,000 “business mentors” who were supposed to provide support for entrepreneurs.
Vince Cable, the business secretary, announced in November 2010 that the government would recruit 40,000 volunteer mentors, saying: “Mentoring is a very effective way of promoting start-ups, higher productivity and growth among established businesses.”
But 17 months after the policy was announced, just 16,000 have so far been trained, the department has confirmed, with officials appearing to struggle to persuade business leaders to take on extra mentoring work for no money.
Chuka Umunna, Labour’s shadow business secretary, said: “The government’s mentoring scheme, announced with much fanfare in 2010, has fallen short of the numbers of mentors which were initially promised.
“At a time when 50 businesses are going under every single day, we need to see far more leadership and urgency from the business department in supporting our wealth creators.”
As the government battles to recruit the full 40,000, ministers have lowered their sights, setting an interim target of 26,000 by September. While 5,000 mentors have recently signed up for training, that still leaves another 5,000 to be recruited if they are to hit the new target.
An official from the business department said the mentoring scheme was “continuing to attract significant volunteers” and reiterated its aim of reaching 26,000 by the end of September.
Meanwhile, the government also confirmed it will not develop any new tools or services for its Business Link website – another project aimed at helping small enterprises – while a new cross-governmental site is developed. This means Business Link will not be updated much further until the new site opens this year.
Officials say Downing Street has raised concerns with the business department about the lack of fresh development on the Business Link site.
Advisers to the prime minister believe the site has good information for small and medium-sized businesses, but that it is not accessible enough. They point to the Business Finance Finder, a database of private and public sources of funding for new businesses, which was developed in nine working days, as an example of the kind of new tool they want to see rolled out in the coming months.
Labour says these issues show the patchwork of measures brought in to compensate for the lack of regional development agencies, which were formally scrapped last week, are not doing enough to boost enterprise. Some senior Liberal Democrats admit they were wrong to scrap the RDAs, which they say were viewed as unnecessary government intervention by their Conservative coalition allies.
Mr Umunna said: “In the rushed abolition of the Regional Development Agencies, ministers failed to put in place a framework for business support to fill the gap they left.
“We have seen business support torn up without an effective replacement.”
The criticism comes amid broader debate over how best to promote SMEs and start-ups, which have struggled to secure credit from cautious banks since the financial crisis.