91% of SMEs rate Government support as poor or very poor

91% of owner-managed businesses rate Government support to the SME sector as either poor or very poor – up from 83% in 2024 and 77% in 2023, while 64% of these businesses are unlikely to make significant capital investment in the next 12 months.  These are two of the key findings of a survey of 276 owner-managed businesses, including Price Bailey’s own clients, launched by the Association of Practising Accountants (APA).

Other findings include:

• 84% of respondents expected labour costs to rise in the next 12 months, up from 2024 expectations (81%) but down from 2023 (90%)
• 82% expect supply-chain costs to rise in the next 12 months, which is consistent with our 2024 findings but down on 2023 figures (89%)
• 46% of respondents think their business is in better shape than 12 months ag,o which is consistent with our 2024 findings, but down from 2023 (49%)
• Uncertain trading conditions (40%), followed by wage inflation (28%), were cited as the biggest challenges facing the owner-managed sector
• 52% expect tariffs to pose a risk to their business
• 89% are not confident in the Government’s growth strategy

Commenting on the findings APA Chairman and Managing Director at Price Bailey, Martin Clapson said:

Over the last 24 months there has been a noticeable loss of confidence in the ability of Government to provide owner managed businesses with the support they need to thrive.

Many of these entities are being buffeted by choppy political and economic headwinds.  Recent progress on a UK trade deal with the US together with renewed dialogue with European partners on cross border trade are both welcome but what is clear, is that growth remains a major challenge.  Uncertain trading conditions, wage inflation and increased labour and supply-chain costs are making it harder to operate and disincentivising capital investment.  

Government needs to make it easier and more cost effective for SMEs to employee people. There is also a need to provide guidance and support as well as confidence to the sector on vital business continuity issues such as cyber, infrastructure and energy security.

That 91% of respondents rate Government support as either poor or very poor suggests there is significant work to be done to provide SMEs with the help they need to grow. Owner managed businesses are a vital part of the economy. Policy makers need to understand their distinct needs and put in place the policy frameworks and light touch regulation to have them succeed.

The APA calls on Government to put owner-managed businesses at the heart of the pro-business agenda that is core to the recently launched industrial strategy by:

• Revisiting rises in NI and corporation tax and incentivising capital investment.
• Taking a more realistic view of our future trading relations with Europe, recognising that a more challenging export environment poses a real threat to long-term growth.
• Recognising that uncertainty remains across many sectors of the economy and that businesses need reassurance as well as clear and unambiguous advice and support.

ENDS