Sunak’s £520 million SME Help To Grow scheme set to be axed in cost cutting drive

Rishi Sunak’s £520 million scheme to improve the productivity of Britain’s small companies faces the chop as part of a review of business support in Whitehall to find cost savings.

The former chancellor launched the initiative in March 2021 to train the leaders of 30,000 businesses on 12-week courses run by business schools over the following three years.

He said the scheme, called Help to Grow: Management, was designed to help “entrepreneurs to reach their potential”. It is 90 per cent-funded by the taxpayer, leaving businesses to pay £750.

In May, three business support organisations, including Enterprise Nation, were awarded an £8 million contract to recruit thousands of volunteer mentors to support the scheme. However, it is understood that business department is identifying business support schemes that could be cut in order to meet new cost savings demanded by the Treasury, with Help to Grow and a related programme, which provides £5,000 discounts on approved productivity software, both under the microscope.

“[We are] reviewing all those schemes to judge how effective they have been and if they’re worth continuing with,” a source at the department said.

A spokesman said the schemes were continuing to enrol new applicants. “Both the Help to Grow: Digital and Management schemes remain in place,” he said.

Help to Grow aims to help small companies to become more productive by arming their leaders with tools to help them to plan, prioritise and execute more effectively.

A survey last week by Be the Business, the support organisation, found that the management teams of small businesses were eight percentage points less likely to believe that they had the right skills, compared with their mood when the question was asked in the Spring. Business owners were ten percentage points less confident in their own skills.

Officials expected 4,000 directors to have enrolled on the Help to Grow scheme by May this year. A source involved in the rollout said the numbers of participants had accelerated since then. However, she was critical of the business department for not marketing the scheme effectively to encourage take-up. Another source admitted that the uncertain trading environment made it more unlikely for company owners and directors to feel they could commit to the three-month course.

Help to Grow’s sister scheme, called Help to Grow: Digital, was expanded in July to cover 1.2 million businesses when the business department lowered the eligibility criteria from a minimum of five staff to one. It aims to encourage the wider adoption of digital technologies.

At the time, Martin McTague, national chairman of the Federation of Small Businesses, welcomed the move. “It’s good that ministers are listening,” he said. “This will help small businesses enhance their operations and drive efficiency and growth.”

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Sunak’s £520 million SME Help To Grow scheme set to be axed in cost cutting drive