Comment & Analysis
The Chancellor George Osborne’s Autumn Statement and spending review made plenty of headlines last month, with most of the coverage associated with U-turns on tax credits and commitments to maintain police funding.
Less well documented was the decimation of manufacturing support bodies, which could seriously impact much-trumpeted plans to rebalance the economy away from the services sector.
Most notable was a decision to wind down the national delivery of the Business Growth Service (BGS), a well-established body that was set up to provide businesses with development and innovation advice, and to provide access to debt, equity and grant finance for growth.
BGS might not deal in the sorts of sexy services that interest the national media, but it has provided much support for manufacturers over the years, and its unheralded demise is to be regretted. Providers of the BGS have been told not to enter into any further contractual commitments with customers, although existing deals will be honoured, as long as all support and related activity is completed by 31 March 2016.
Also under the umbrella of BGS is the Manufacturing Advisory Service (MAS), which is also being left to wither on the vine. MAS will be familiar to readers of PE, as the work of many of its 80-plus team of business growth managers has often been name-checked in articles regarding business support. In particular, the free reviews and diagnostics that MAS experts offered to small or medium-sized businesses have proved invaluable over the years as companies have fought hard to survive. MAS has become a recognised and trusted name among the manufacturing fraternity, and it is sad to see it simply disappear amid the welter of government cutbacks.
Spin doctors at the Department of Business, Innovation and Skills have been quick to defend these decisions, arguing that the best way to support firms is at the local level, rather than through centralised initiatives. As such, it is investing in 39 so-called Growth Hubs, giving them autonomy to “support local businesses to start-up and scale-up”.
There’s two problems here, though. Firstly, the money being spent on the Growth Hubs is far less than was previously invested to support BGS. So that’s a direct cut to the already paltry funding of support services that the manufacturing sector receives. And secondly, this move risks losing the critical mass of recognition that BGS and MAS had spent years building up. Small firms are already put off by the confusing bureaucracy that surrounds government support initiatives, so to fragment and dilute what’s on offer seems a counter-productive thing to do.
Of course some will argue that in an era of austerity, which has resulted in cuts to publicly funded bodies across the board, there is no reason why manufacturers shouldn’t bear some of the burden. But this is a sector that has been specifically identified in Westminster as being crucial to the long-term well-being of our economy.
In short, it feels like a watershed moment: a time when the government’s belief in the March of the Makers came to an abrupt end.
Contact Lee Hibbert, PE Editor, at Unit G4, Harbour Yard, London SW10 0XD. lee.hibbert@caspianmedia.com