Infrastructure tops SMEs’ Government investment wishlist


If small businesses could wave a magic wand and be Chancellor for a day they would rather spend taxpayers’ money on infrastructure than anything else.

That’s the conclusion of the latest quarterly Business Barometer survey from Close Brothers, the invoice finance firm which canvasses opinions of SME executives.

Two in five SME owners and executives said the Government should prioritise infrastructure over education, energy and health as the best route to economic prosperity.

A further 25% claim that an up-to-date infrastructure is key to the expansion of their business.

What is infrastructure?

Infrastructure means anything that gets the wheels of industry oiled. This includes the transport network, including major roads and rail links, communications links, such as super-fast broadband, and flood defences.

Why is infrastructure so key to SMEs?

Transport, broadband and utilities supplies are vital to a SME’s success, according to the Federation of Small Businesses (FSB).

Transport: Most SMEs rely on their car or van to run their company, with 72% claiming that their vehicle is essential. So this necessitates an efficient, fast road network for the smooth running of their business. Around half the UK’s small companies think that the country’s poor highways have cost them a maximum £5,000 – or around 1% of their typical annual turnover – over the last year, according to FSB research. The federation wants to see money clawed in by the road network actually invested back into the road network.

Broadband: One of the Government’s leading priorities is swift roll-out of top-quality broadband, with the goal of creating 10 super-connected conurbations by 2015. But 9% of small firms still can’t access any broadband whatsoever and 22% can’t get latest-gen broadband, according to the FSE, with the problem especially bad in rural areas. It says that faster broadband speeds can only raise the country’s growth and productivity.

Utilities: Water and energy are crucial to small firms, which enjoy all the same utilities benefits as householders, but without the protection. Four in five small firms are concerned over increasing energy prices, the FSB found. The federation said that several such companies don’t have the know-how to negotiate deals which are simple to understand and without penalties. The FSB is trying to address this issue with energy regulator Ofgem.

What is being done to improve the UK’s infrastructure?

The Government recently published £375 million plans to upgrade the country’s infrastructure up to the end of the next decade and beyond. This included long-term infrastructure investment in transport, water, waste, flood defence, energy and communications.

What the experts say

Close Brothers CEO David Thomson said that giving the UK one of the world’s best infrastructure’s is vital to its future economic plan.

Super-fast broadband, for example, would be advantageous to businesses which trade regularly online, Mr Thomson added.

He said the investment will create economic stimulation, employment and help to attract overseas investment.

An FSB spokesman, welcoming the new investment, said that firms will start moving and expanding if the Government addresses the country’s congestion problem and repair backlog.

Posted by the Secret Businessman