Small businesses struggling with ineffective infrastructure

Rising energy costs and access to effective telecommunications, including broadband and mobile phone reception, have topped the polls as some of the most important infrastructure issues for small businesses, new research from the Forum of Private Business (FPB) has found.

According to its survey, 80 per cent of members questioned felt that energy costs were important, while the same number cited telecommunications access as a problem, particularly in rural locations. Other key areas of concern were the availability of local services such as banks, post offices and waste and recycling centres, and infrastructure such as local roads and rail transport.

The survey however, also highlighted that small businesses are most keen to see the Government prioritise reducing business rates, which rose by 5.6 per cent in April this year as they switched from tracking the consumer price index to the retail price index.

Boosting consumer and business confidence (49 per cent), tackling health and safety policies (45 per cent), utility costs (44 per cent) and late payment (28 per cent) followed as Government priorities, with under a quarter saying local business infrastructures needed to be improved.

Jane Bennett, the FPB's head of campaigns, said: "Improving the UK's transport network is extremely important but infrastructure is about more than just roads and railways - it is about creating a business environment and road map for growth that paves the way for small firms to be successful and create jobs."

She added: "There is clearly a regional perspective to all of this, with firms in different locations with some issues greater for firms in certain locations. We have noted before that there is something of a ‘postcode lottery' for public late sector payments, for example, and it appears the same is true in other areas of business, such as variances in business rates and raw material costs as well as transport links."

According to the survey, a total of 74 per cent of members felt their location was effective for their business's needs, with the proximity to good transport, centrality and footfall as other key factors.

The FPB is now calling for the Government to concentrate on a wide range of improvements to local business infrastructures, including the delay of HMRC's online VAT filing and Real Time Information service until high speed broadband is available across the country, accelerating proposed consultations on changes to employment law, reducing business rates, stabilising fuel prices, and consideration of extending the £5,000 national insurance (NI) holiday for the first 10 staff employed by a new business.