Key findings
This Interim Report has followed six months of research and evidence-taking from leading business organisations. The key findings include:

• Government now spends £12 billion on business support annually
  The Report, for the first time, tries to offer the most accurate and comprehensive picture of Government expenditure.


• 3,000 schemes, run by 2,000 public bodies
  The Report charts how over the last 25 years and several governments, an ad-hoc generation of schemes has accumulated. There is no clear structure or rationale, rather an overly complex maze in which roughly 3,000 schemes are being administered by around 2,000 public bodies and their contractors. Efforts to simplify these schemes cannot succeed because the Government has no means to separate the successful from the unsuccessful.


• No evidence the money has any impact
  The Report shows how Government has made little or no attempt to measure the impact of its business support schemes. The Task Force commissioned detailed research, including a series of 50 economic correlation analyses to assess the impact of state business support. No measurable correlation could be found whatsoever.


• At least one third is lost in administration
  The Report shows that for every pound coming from central Government to the Regional Development Agencies for SME support, at the very least 33.5 pence is lost in administration. In practice, with other layers of administration, the amount that reaches the small business is often lower.

Booming business
The Report's conclusion is that Government either needs to prove that its expenditure is having an impact, or to consider scaling back surplus cost. The large number of schemes and the complex and administratively-expensive system shows the need for fundamental reform, based on the principle that Government should only provide support, when there is clear evidence of demand.

Doug Richard, Chairman of Library House and the Task Force said: "From this Review it is clear that Business Support has become a booming business sector in its own right. Yet its failure to provide effective support is both a waste of the taxpayers' money and a lost opportunity to grow an entrepreneurial economy.

"Small businesses are the lifeblood of the economy and the ultimate economic wellbeing of our country depends on ensuring that the UK is one of the best places in the world to start and run a small business. We must radically re-think how government supports small business, entrepreneurs and innovation."

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"I want to make this country the best place for small businesses. Clearly Labour's money maze won't achieve that. So I look forward to receiving the Task Force's ideas as to how a future Conservative Government could reform things for the better."

The Richard Report on Small Business & Government has been researched and written by an independent team of business experts, led by Doug Richard, Chairman of Library House and a former member of the BBC2 Dragons' Den.

A final Report will be published in May, recommending a new approach to government support for small business.

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Susie Hughes
The Editor © Hardhatter 2007