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Small businesses highlight failings on skills policy and regulation


The UK's 3.5 million small businesses are being held back by critical skills gaps, according to William Sargent, Chair of the Small Business Council.

The Council's annual report identifies a mismatch between education and business needs, and calls for education and training providers to consult firms in their regions about their skills requirements and reflect these in the content and style of training they offer. The report follows consultation with the small business community.

The Council has also questioned the mooted policy of giving employees time off work to acquire qualifications. It has called instead for recognition from Government that businesses provide training for their workforce, even if it does not always lead to an official qualification.

Mr Sargent commented: "We believe that the Government does have good intentions, but these are undermined by a lack of awareness of business needs, poor co-ordination between departments and in particular an ingrained culture of using regulation to solve any perceived problem. We do detect a positive culture change developing in certain parts of Whitehall, but it remains the case that Ministers and civil servants achieve more kudos for creating new regulation, than for improving or removing the legislation that is already in place.

"But consultation is not a one-way street and business people should not just sit back and expect the Government to sort everything out for them. Small firms must be available to explain how Government policy will affect their business and, in particular, to support UK negotiators in Brussels."


- All regions develop a regional skills intelligence unit, which identifies employers' requirements and enables employees to skill according to local job opportunities

- Small firms undertake a skills audit, and Government provides funding for the training they need using Company Learning Accounts

- The Small Firms Loan Guarantee Scheme be simplified to and that the scheme be extended to include new sectors
Government provides tax incentives for small firms taking in equity

- A two-stage litmus test is adopted by all government organisations. Stage 1 of the litmus test must include a statement of the possible unintended consequences of a proposal, and must include all policy options as well as legislation. Stage 2 of the test is How to Act, which is a detailed consultation exploring the delivery of policy in a way that poses as small a burden on business as possible.

- The Regulatory Impact Assessment be renamed the Policy Impact Assessment to allow for meaningful consideration of alternatives to regulation before it is envisaged

- Government issue a cross-departmental statement on its aims and priorities for small business by November 2002

- Government publish an evaluation of the services it currently offers small business


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