A report published today by the Federation of Small Businesses (FSB) and the Centre for Local Economic Strategies (CLES) calls on LEPS to place small businesses at the heart of their plans for local economic growth. The report stresses that small business can’t be ignored as the economic recovery continues.
According to the FSB, Local Enterprise Partnerships are the right vehicle to deliver local economic growth across England but stresses that the voice of small businesses needs to be better represented within LEPs.
Small and medium sized businesses have been responsible to four in five (84%) of jobs created in the private sector between 2010 and 2013, representing half (48%) of private sector turnover. However, the report finds that large businesses are perceived to have most influence within LEPs.
The findings highlight how doing business locally is better value for money as small local firms generated £746 million more for the local economy compared to large local businesses.
The research shows that for every £1 spent with a small or medium-sized business (SME) 63p was re-spent in the local area compared to 40p in every £1 spent with a larger business.
The FSB concludes that it wants to see more local authorities using businesses in their areas to help boost economic growth. It believes that if each authority had spent an additional 5% of their budget locally and committed just 3% more of that to small local firms, an additional £788 million could have been generated for local economies.
National Chairman of Federation of Small Businesses, John Allan said: “This report shows the power and strength of small firms to create jobs and growth in the local economy if they are given the help to do so. With budgets being cut there seems to be an increasing realisation that spending more locally will benefit the local economy. The evidence speaks for itself. Spending locally invests in jobs and growth for the area. We want to see more of this happening across the country.”