The hope, and indeed the expectation has long been that small businesses would be a strong driving force in the U.K.’s economic recovery and growth. However the latest quarterly report from the Forum of Private Business indicates that small business owners are still fighting an uphill battle, and losing confidence in their ability to get the job done.
Compared with the response to the Forum’s survey in December 2010, when about 30% of respondents expected to hire new staff in the coming year, this survey showed only about 20% who still thought they would be able to do so. Factors cited in the report included the tax structure and all the red tape involved, the high cost of recruitment as well as rising fuel and product prices, and the lack of support for improvement of skills needed to keep up with a rapidly changing business environment.
Amongst the business owners surveyed, about a fourth said they would need an increase in profit in order to retain and/or add to their current staff. Another 17% cited a simpler and more business-friendly tax set-up as a partial solution; others said more support for training employees in new skills is a crucial factor. Overall the level of confidence in future growth and prosperity has waned over the last quarter, and that is a worrying state of affairs, according to the Forum’s research director.
Another worry is the government’s plan to scrap the default retirement age, which the Forum says will undermine the ability of small businesses to plan ahead and make the best possible use of employees’ skills. What is needed is more re-training and updating of skills for both existing employees and new hires, and the large majority of business owners believe they will need outside help for that.