Are SMEs the hidden losers in Spending Review

As the owner of an SME I am naturally interested in how to ensure that these organisations develop and grow which is why I specialise in working with them.  It is commonly accepted that it is SMEs that will drive recovery from the current economic situation.  However they are facing more challenges than ever on all fronts.

The Spending Review will impact on a large number of small organisations providing services to the public sector as capital spending is cut.  With recovery from the recession still precarious it is going to be very difficult to replace these revenue streams.

Employment legislation is also placing additional burdens on SMEs, particularly the Equality Act and proposals from the European Parliament to increase paid maternity leave.  These small businesses generally do not have the resources in-house to manage the amount of legislation being thrust upon them and are unlikely to want to retain consultants because of the cost.  This puts them at risk of high cost tribunal applications.

Whether or not we agree with the value of the service given,the demise of Business Link and RDAs will further reduce the help available to them to ensure they are positioned for future growth.

Best estimates at present are that the Spending Review will put between 1m and 1.25m people onto unemployment benefits.  In the past a number of these people would have looked at opportunities for self employment as a way of staying in work, creating more SMEs as a result. Given the current situation those opportunities probably won’t be there and the unemployed will struggle to find work of any kind until the economy turns around again.  This could mean that some of the people who lose their jobs now may never work again.

Boom and bust is a cycle that happens regularly yet we appear to learn nothing from each recession and recovery.  Isn’t it time we started to be more responsible with our economy in order to safeguard the future of coming generations and shouldn’t we be doing more right now to help those organisations that, if allowed to grow and develop, will provide much needed employment opportunities.

About elaineonyc

HR generalist who is passionate about the benefits of good HR practice. Experienced in delivering strategic and operational HR initiatives to clients in both public and private sectors. Specialises in working with SMEs.
This entry was posted in Economy, News, Public Sector, Upcoming Legislation. Bookmark the permalink.

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