Doing Business in the UK - Survey 2006

Business views on the DTI, the SBS and the UK's enterprise environment.

September 2006

 

Why did we conduct this survey?

Ahead of the Comprehensive Spending Review in July 2007, there are some pressing issues for the Government which the business community wants to see addressed. These relate to:

·        the role of the DTI

·        the effectiveness of the Small Business Service and

·        the enterprise environment

 

The BCC surveyed businesses to get the most up to date picture of what they think on these subjects. With the prospect of government departmental budgets being cut in the Comprehensive Spending Review, it is vital that what works well for businesses is maintained and, just as importantly, improved. In view of the likely reduction in public spending, businesses’ priorities must be fought for.

 

How did we conduct the survey?

The fieldwork for the survey Doing Business in the UK was conducted during June 2006. A total of 550 businesses took part in the survey, from across the UK and representing a wide-range of sectors and sizes. The survey was available online and as a Word document. It was distributed through BCC’s e-newsletter, which goes direct to businesses, and through Chambers of Commerce, to whom we are very grateful for the time and effort they gave to help make the survey a success.

 

Results

The objectives of the DTI

In the eyes of businesses, the two most important objectives for the DTI are championing business interests within government (selected as the highest priority by 73% of businesses) and balancing employment rights and businesses’ interests (selected as the second most important objective by 70% of businesses). Businesses want the DTI to punch its weight in government and be regarded as a serious voice for business interests.

 

The effectiveness of the DTI

Business views on the effectiveness of the DTI in relation to each of its seven current objectives varied significantly. The results for each objective are as follows:

  • Championing business interests within government: nearly two-thirds (61%) of businesses think the DTI is either ineffective/very ineffective. Just 7% think it is very effective.
  • Business support schemes: just over half of businesses (54%) think the DTI is ineffective/very ineffective in establishing and managing business support schemes.
  • Promoting international trade and inward investment: 56% of businesses think the DTI is effective/very effective in achieving this objective whilst 44% think the DTI is ineffective/very ineffective. Together with promoting employment rights, this was the most positive result but still shows considerable need for improvement.
  • Balancing employment rights and businesses’ interests: This was identified as the second most important objective for the DTI but only just over half (56%) of businesses rated the DTI as effective/very effective in achieving this objective.
  • Supporting research and development:  Three out of five businesses (58%) believe the DTI is ineffective/very ineffective at supporting research and development.
  • Promoting competition and consumer interests: Businesses were divided on their perception of how the DTI is meeting this objective, 51% believing the DTI to be effective/very effective and 49% rating it as ineffective/very ineffective.
  • Ensuring secure, sustainable and affordable energy supplies: This was the worst result with 74%, or three-quarters, of businesses rating the DTI as ineffective/very ineffective.

 

Is there a future need for the DTI?

Businesses were in almost unanimous agreement that there is a future need for the DTI: 89% want to see a DTI in the future, despite concerns over its effectiveness and whether it really is a champion for business interests. Clearly the DTI needs to be reformed and strengthened so that it is better placed to deliver on its objectives, but without a doubt it must be retained as a key department within government.

 

The future responsibilities of the DTI

Businesses’ top five priorities for the DTI in the future are: small business support (selected by 78% of businesses); representing business interests within government (74%); promoting business interests in the European Union (68%); export promotion (52%); and promoting skills and training (52%).

 

The effectiveness of the Small Business Service

Over two-thirds (69%) of businesses think the SBS, set up in 2000 to achieve the Government’s aim of making the UK the best place to start and grow a business, has been ineffective/very ineffective in achieving a better environment for small businesses. 43% rated it as ineffective and a quarter (26%), rated it as very ineffective.

 

Progress on the Action Plan for Small Businesses, published in 2003

In 2003 the Government published the Action Plan for Small Businesses, with seven areas for improvement. Businesses were asked to indicate whether, in their experience, they had seen improvements in each area. The results were as follows:

 

 

1. Building an enterprise culture:

·        83% of businesses have seen no improvement and almost a quarter (24%) have seen a worsening.

2. Encouraging a more dynamic start-up market:

·        Nearly nine out of ten businesses (86%) do not feel that a more dynamic start-up market has been encouraged and of these, nearly a third (27%) believe that the start-up market has worsened.

3. Building the capability for small business growth

·        Over half of businesses (53%) think that the capability for small business growth has stayed the same, whilst a third (34%) think it has worsened.

4. Improving access to finance for small business growth

·        More than four out of five businesses (83%) do not believe that it has got easier for small businesses to access finance for growth and a third (32%) believe it has got more difficult.

5. Encouraging more enterprise in disadvantaged communities and under-represented groups

·        This is the single strand of the 2003 action plan which has, in businesses’ eyes, seen any noticeable improvement. 30% of businesses believe that enterprise in disadvantaged communities and amongst under-represented groups has been encouraged.

6. Improving small businesses’ experience of government services

·        Of the seven action points, this has one of the worst results: 90% of businesses have felt no improvement in their use of government services, with two out of five (42%) saying that it has worsened

7. Developing better regulation and policy

·        This is the worst performing action point of the seven. 93% of businesses have seen no improvement in regulation and policy, with over half (52%) believing that it has got worse.

 

Further information

Please contact: Charlotte Moore-Bick, Policy Adviser, British Chambers of Commerce, 65 Petty France, London, SW1H 9EU, Email: c.moore-bick@britishchambers.org.uk, Tel: 020 7654 5806