The United Kingdom’s decision to leave the European Union could leave it with a small business support “black hole”, according to a new report.
The Federation of Small Businesses has warned that the government must put plans in place to replace a £3.6 billion EU funding plan that finishes in 2020.
It said that there is currently no regional development spend budgeted at a national level beyond 2021, and recommended that a “streamlined” growth fund for England is created.
“Small businesses across the country are staring into a business support black hole from 2021,” said Mike Cherry, the national chairman of the Federation of Small Businesses.
“This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions.
“If the next government is serious about developing an industrial strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU.”
The organisation’s research found that 78 per cent of small businesses have sought business support over the last 12 months, the biggest hotspot for applications to EU schemes being Yorkshire, where a quarter of firms have applied.
68 per cent of businesses that applied said EU funding had a positive impact on their businesses, while 64 per cent said it had a positive effect on their local area.
The research also found that businesses with greater growth ambitions are more likely to apply, with a quarter more firms looking to grow by 20 per cent or more applying.
That said, only 12 per cent of firms said the EU funding application process was straightforward, and a lack of engagement with the programme was also discovered.
In fact, 44 per cent of those that have not applied said they were unaware of the opportunities, and the survey found that 34 per cent of successful applications found out about the programme through their existing business contacts.
For more from the report, see the Federation of Small Businesses’ website.