CBI slates 'baffling' business support schemes

The Government's £8bn-a-year business support network is failing to provide an adequate service to start-up companies, according to a devastating report published by the CBI today.

The employers' organisation says that entrepreneurs face a "baffling array of conflicting, confusing and inconsistent" bodies tasked with supporting new and growing firms. It said the £8bn that Whitehall spent on some 2,650 schemes in England alone was being wasted as businesses were increasingly disenchanted with publicly-funded schemes.

"They do not know what help is available, do not trust the quality of advice on offer, or do not believe it will match their needs," the CBI said.

The report claims that Business Link, the Government's flagship agency, was used by only one in seven firms despite receiving £140m of taxpayers' money each year.

Independent research commissioned by the CBI found only 38 per cent of businesses were satisfied with the quality of the general business information.

Ian McCafferty, the CBI's chief economic adviser, said its findings came as levels of entrepreneurial activity in the UK were stalling.

"There are too many overlapping, confusing and inconsistent schemes," he said. "Despite work to address the problem it is clear that much more progress needs to be made by Government and the regional bodies who can work more with business. With £8bn spent a year on services to small businesses, they should be exemplary but this is not the case."

The CBI called for the number of services to be streamlined to ensure they fill a gap in the market and for improved training for advisers. It said Whitehall departments should work with the Small Business Service (SBS) to "create an enterprise culture rather than resist it".

Last year the CBI's first report on the SBS found red tape had increased since 2000, while many businesses found it hard to access affordable or appropriate sources of capital.

The number of businesses in the UK has grown by 600,000 since 1997 to 4.3 million but those actually employing staff fell from 1.35 million to 1.23million, reflecting concerns about employment legislation, the CBI said.