BUSINESS: The Comprehensive Spending Review – what it means to you and your business (From Your Local Guardian)
BUSINESS: The Comprehensive Spending Review – what it means to you and your business
11:31am Thursday 4th November 2010 in News
You don’t need to have paid much attention to the news recently to have been aware of the Comprehensive Spending Review (CSR) announced by the Chancellor George Osborne, on the 20th October. The plan to shape spending for the Government brings the beginning of a new era of austerity, which at worst estimates could see 500,000 jobs lost from the public sector, and an equal number from the private sector.
In London, the Chancellor claims a number of benefits for the city’s residents. These include:
The creation of a UK-wide Green Investment Bank that will be funded by a £1 billion spending allocation and additional proceeds from the sale of Government-owned assets. The bank will encourage significant additional investment in green infrastructure;
The £1.4 billion Regional Growth Fund will support projects with significant prospects for sustainable private sector growth and provide support for people in areas which are currently dependent on the public sector;
Tax increment financing will enable local authorities in London, to borrow against locally raised business rates;
Capital investment programmes in London will concentrate new investment on infrastructure underpinning economic growth, and maintaining existing public assets:
Crossrail – a new line linking East and West London providing an additional 10% to London’s rail capacity;
£220 million funding for the UK centre for Medical Research and Innovation at St Pancras;
Guaranteed funding will help support the tube upgrade programme which will increase capacity by 30% by 2020;
The Olympics Games will help to transform East London – five major new sporting venues for elite and community use, an initial 2,800 new homes, and an estimated 8,000-10,000 new jobs on the Park.
More generally, for the business community, we saw, measures to increase the number of adult apprenticeships by 50 per cent to 75,000 new apprentices a year, measures towards moving to a low carbon economy and the commitment to improve the infrastructure of the country. The £530 million directed from the Government and the BBC to put in place superfast broadband will benefit those businesses based in more rural areas and the investment in the Post Office Network is something that many small businesses will welcome, as the closure of post offices is cited as a problem by many small businesses.
However, we need more support for small businesses; it will be those businesses that will need to grow to provide the new jobs to help support the country in the aftermath of such severe job losses.
The Federation of Small Business has called on the Government to provide a Programme for Change. This would include:
An extension to the National Insurance Contributions holiday to include existing firms with up to four members of staff and provide incentives when they take on three new employees - funded by scrapping the £1 billion Regional Growth Fund;
A cut in VAT to five per cent in the construction sector to help create jobs and stimulate the economy, but also increase revenue to the Treasury;
A cut in the business support budget to £500 million and concentrate spending on genuine business support for micro businesses and a fully operational web portal;
A business-led National Mentoring Service to be created through the Institute of Enterprise and Entrepreneurs to match mentors with businesses with backing from the banking industry.
John Walker, National Chairman of Federation of Small Businesses, said:
"We all know we are living in an age of austerity and that these cuts will affect us all. But our members understand that to reduce the public sector deficit, these cuts had to be made. The small business community continues to have a vital part to play in driving a credible recovery and taking on new members of staff to help tackle unemployment, so it is now vital the Government puts a Small Business Programme for Growth into action immediately."
It should also be remembered, that whilst these will be trying economic times, as the old proverb goes, from challenges come opportunities, and those small businesses able to respond and adapt to our new economic circumstances, will grow and flourish and help lead the country towards better economic times.
Hannah Holdroyd is London Policy Officer for the Federation of Small Businesses; she can be contacted on Hannah.firstname.lastname@example.org. Read more about the FSB in London at www.fsb.org.uk/London