It’s the beginning of a new year and things are looking optimistic, especially for small business and startups. However, a lot lies in the balance – elections are fast approaching and government parties are expected to step-up in support of Britain’s vanguard of self-employed. Let’s take a look at the financial highlights so far:
Conservatives pledge more startup loans if re-elected
David Cameron pledged to increase Startup Loans lending to £300 million with the aim of supporting another 50,000 fledgling businesses, should the Conservatives be re-elected this spring.
The scheme has already helped 25,000 businesses get off the ground, lending almost £130 million, and has proven the most popular and well-used of the government’s small business support schemes.
Yet, government departments are harming SME suppliers
Despite Cameron hailing the Tories as the ‘party for small business’, government departments are failing to meet their payment obligation to the small businesses supplying services to them, a National Audit Office report found.
The NAO found that 80% of invoices raised by SMEs took between three and seven weeks to settle, breaking the government’s pledge to pay 80% of all undisputed invoices within five working days.
The NAO’s Amyas Morse commented:
“UK businesses told us they welcome the government’s commitment to pay invoices early. However, there has been a disappointing lack of effort by government to check whether the implementation of the policy is actually helping SMEs.
“We are also seriously concerned about the prompt payment performance figures publicly reported by departments. These were overstated by the four departments we looked at. It remains to be seen whether the changes proposed in the Small Business, Enterprise and Employment Bill and secondary legislation will be enough to bring about improvements, not just in public sector payment practices but the private sector as well.”
The drop marked a six year low, pushing the unemployment rate down to 5.8% of the adult working population. The number of people claiming job seeker’s allowance also fell by 26,700 to 867,000, the 26th consecutive monthly reduction.
This news was boosted by the fact that wages were also up 1.8% from the year before. This is the second consecutive period that both measures of earnings have been above the level of inflation and shines an optimistic light on the first quarter of 2015.
There were more UK startups than ever in 2014
2014 was a record year for companies formed in the UK, with a total of 581,173 businesses registered with Companies House, beating the 2013 record by almost 50,000.
London was, unsurprisingly, cited as the most entrepreneurial city with Birmingham coming in second. The report, commissioned by Startup Britain, also shows an increase in entrepreneurial activity in regional cities, which could indicate a move away from Britain’s London-centric economy.