Plans to abolish the services – designed to boost business performance and growth – were unveiled after the Autumn Spending review last month. According to a statement on the BGS website: “As part of the Spending Review settlement, the government has decided to wind down the national delivery of the Business Growth Service.”
The service closed to new applicants on Monday November 30 but existing commitments would be honoured provided they were completed by March 31 2016.
Steve Osborn, principal consultant, food and beverage at The Aurora Ceres Partnership, said it was “terribly disappointing” that the Autumn Statement had delivered “the final nail in the coffin” for the MAS.
Commenting on Food Manufacture’s Linkedin site, Osborn said: “This access to grants is an essential mechanism for many UK manufacturers not just food and drink. It was also a great lubricant, as it not only helped SMEs [small and medium-sized enterprises] move forward, it gave them access to those that could help them.”
Not promising
Rob Coleridge, associate at law firm Thomas Eggar, said the news was not a promising statement of intent by the government.
“The BGS, via MAS and the Growth Accelerator Programme, provided invaluable assistance to British manufacturing in what are difficult times,” he remarked.
The BGS helped businesses negotiate the bureaucracy of tax credits and gave SMEs access to a wealth of experience and a network of vital contacts, he said. Those links gave firms the confidence to expand and the opportunity to succeed.
“UK manufacturing has been in decline but that is not the fault of the BGS and winding it up could make things worse,” said Coleridge. “While some professional service firms can offer similar guidance to the BGS, many manufacturers will be reluctant to ask for fear of being lured into incurring unnecessary costs, even if that may not be the case.”
Consequences
Another consequence of winding down the BGS was that government would lose direct access to manufacturers and the feedback they provided.
“Consequently, manufacturers are going to feel less supported and measuring success is going to be more difficult than ever,” he said. “The government is going to have to work hard to overcome these issues.”
Business minister Anna Soubry told our sister title Food Manufacture magazine: “The most important way we can help small businesses is to continue to secure a strong, growing economy and that’s exactly what this government is doing. We’ll keep cutting red tape and have extended small business rate relief for an extra year, freeing up small firms to do what they do best.
“Where taxpayers’ money is used to provide support, this is best done at the local level, which is why we’re providing further funding to Growth Hubs and away from Whitehall.”