Financial news round-up - February 2015

by Startacus Admin

EcWelcome to the Startacus monthly financial news round-up, brought to you by Sophie Turton of Crunch Online Accounting. 

Microbusinesses are making a comeback this year, as the government puts more pressure on their own to pay up on time and provide SMEs easier access to public sector contracts. Unemployment also hit the lowest point since the economic crisis. Let’s take a closer look:

SMEs to gain easier access to government contracts

Red tape that has historically prevented small businesses from winning government contracts will be stripped away this month as part of a government initiative to support better access to business opportunities within the public sector for SMEs.

The Report on Small Firms 2010-2015, published earlier in the month, said the “arduous” pre-qualification questionnaire will be binned for contracts considered below EU thresholds for goods and services. 

The idea is to make the procurement process as transparent and simple as possible so as not to put small businesses at a disadvantage when tendering against larger organisations. The report also stated that all public sector bodies will have a legal duty to pay invoices within 30 days.

Microbusinesses are making a comeback, says RSA

Microbusinesses are once again the driving force of the economy, a report by the Royal Society of Arts (RSA) will suggest. 

Research conducted by the RSA for their “The Second Age of Small” report revealed microbusinesses account for 41% of employment in the 20 fastest growing industries. This is despite representing only 34% of employment overall.

Microbusinesses employ 75% of workers in personal service activities, 45% in computer programming and consultancy, 57% in education and 40% in human health activities.

Benedict Dellot, senior researcher at the RSA, said:

“We have called this phenomenon the ‘Second Age of Small’ – a phrase that captures how the economy is returning to its roots.

“We seem to be going full circle. Why? First, because consumers are turning away from mass produced goods for more meaningful products. And second, because technology has diminished many of the advantages of scale.

“The lesson for government and wider society is to start treating microbusinesses and the self-employed more seriously.”

There are now more than 5 million microbusinesses in the UK – a 50% increase since 2000, whereas large firms – employing over 250 - have increased by just 25% in the same period.

Gender diversity makes for a better economy

Women in business are an “under-utilised economic resource” and more should be done to close the gender gap between men and women in managerial positions, a report by the Department of Business, Innovation and Skills (BiS) stated.

The Inclusive Support for Women in Enterprise report aims to provide gateways for women to enter positions of power in British business, which should boost economic growth and the creation of jobs. The number of female-led SMEs has growth by 6% since 2014, but more need to be done to close the gender gap in business completely.

Unemployment lowest since 2008

Unemployment hit a seven year low this month and now stands at 6.2% - the lowest level since last 2008. 

The latest statistics from the ONS revealed that 30.9 millions brits were in employment between October and December 2014, compared to 1.86 million who were unemployed. This figure was down from 2.02 million in the previous quarter and showed a reduction of 486,000 from the same period the year before.

Earnings were also up, with pay for UK employees 2.1% higher. 

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Published on: 1st March 2015