Small businesses in the region have a big part to play in closing the productivity gap between London and the wider UK says Simon Hanson, North East Development manager at the Federation of Small Businesses.
There’s no doubting that 2016 has been a momentous year for smaller businesses in the North East. We’ve had some huge changes politically with some areas agreeing deals to take more power and others rejecting this chance, we voted to leave the European Union, changed our Government with an election (of sorts) of a new Prime Minister and have seen the election of a President in the United States that no one predicted (other than the candidate himself).
Alongside these political changes we’ve seen some issues that are having a huge impact on smaller businesses lose a bit of focus. Late payment is still a huge challenge for too many businesses in the region with payment times increasing. Finding skilled staff remains a constant barrier in meeting the ambitions that smaller businesses have. We’ve also seen some big increases in overheads for smaller businesses as a result of increases to the National Living Wage and the introduction of the auto enrolment of pensions.
So what will smaller businesses focus on in 2017?
The good news is that smaller businesses remain ambitious with many looking to expand their business both in the markets they trade in and increasing the numbers of staff. Alongside this the North East has had the fastest growth in employment of any region in the UK and added an extra 11,000 businesses which have been created.
Across 2017 smaller businesses will continue to do what they do best, which is growing the North East economy and continuing to grow their business. In the last year smaller businesses across the North East contributed £26.5bn and employed 359,000 staff.
For many they will want some certainty in 2017 after the tumultuous year we’ve just had. This will mean the Government outlining what the Brexit strategy is and how this will continue to help smaller businesses meet their ambitions. Within this they’ll want to see some certainty around the future of funding particularly on the future business support, innovation and capital spending that has been provided by the European Structural Investment Funds.
Alongside this, smaller businesses will want certainty on the ease of doing business in, and cost of access to, the European single market and as a consequence, the impact and opportunities in relation to non-EU markets. Given the huge skills, challenges many smaller businesses face they need some certainty on the ease and cost of access to labour and skills as well as wider mobility issues enabling business being undertaken in the EU.
Over the coming year smaller businesses in Tees Valley will work with the Combined Authority to ensure that the devolution deal matches their ambitions. With more powers and responsibility in skills and transport backed up by a new investment fund, 2017 will set the momentum to achieve these ambitions. As this progresses hopefully we’ll see the Government devolving more powers and responsibilities to the region.
We’ll also see the first directly elected Mayor for the Tees Valley decided in May 2017. It’s vital that the Mayor understands the needs of smaller businesses and acts on their concerns.
In the North East the proposed North of Tyne devolution deal for Newcastle, North Tyneside and Northumberland will probably continue to progress. We say probably given the hokey cokey nature of the way the other proposed deal finished. This should allow smaller businesses to take advantage of new powers and responsibilities that their Tees Valley counterparts will have.
For smaller businesses in County Durham the new Place of Light campaign will stimulate high value economic activity. This will be achieved through the Smart County work which has been developed to introduce an innovative approach to stimulating high value economic activity in County Durham. It seeks to use ‘problems’ in the County as assets to develop innovative products and service development.
At the heart of this will be a more agile commissioning and procurement approach, which will help smaller businesses win contracts. Backed up by the £20m Finance Durham fund, this will help smaller businesses meet their ambitions.
The North East is the best region in the UK to start, grow and develop a business. As a region we will play a leading role in reducing the productivity gap between London and the wider UK. We have some world leading assets to deliver this whether in advanced manufacturing, automotive or in the digital and tech sector.
Let’s make 2017 the year that we deliver on this.