Mid-sized firms provide £24bn boost to region's economy

However, mid-sized businesses risk being overlooked as the UK prepares to leave the European Union, according to the ‘New Economy’ report published by accountancy and business advisory firm, BDO.

The new research shows that mid-sized businesses created 780,000 new jobs last year, more than smaller businesses (135,000 new jobs) and FTSE 350 companies (320,000 new jobs) put together. In Yorkshire, mid-sized businesses have contributed £24bn to the local economy, according to the report.

A BDO spokesman said: “These high-growth, entrepreneurial and ambitious businesses, which BDO calls the UK economic engine, punch well above their weight, accounting for only 30,000 companies, 1.5 per cent of all UK companies, but one third - £1.2tn - of all UK turnover.

“Yet despite driving growth, profits and jobs, the UK economic engine falls into a policy and profile gap: too big to benefit from Government initiatives aimed at small firms but too small to win the attention that FTSE firms command from the media and policy makers.”

BDO is calling on the Government to prioritise the needs of mid-sized companies as part of a strategy to create a ‘new economy’ that can thrive in the post-Brexit environment.

BDO wants the Government to implement policies to boost the UK’s fast-growth mid-sized businesses and create sector and geographic powerhouses. BDO also wants the Government to ensure that UK firms have “open and simple access” to global markets and talent.

The report’s proposals – which include 22 policy recommendations - include a call for the Government to choose simplicity over subsidy for the UK tax code.

BDO wants the Government to simplify the tax system to support mid-sized companies and cut through red-tape.

BDO believes the Government should commission “shovel-ready” infrastructure projects that bring immediate economic impact while fighting hard to retain the financial services passport, which it describes as a core pillar of the UK’s economic success.

Terry Jones, BDO’s Yorkshire office managing partner, said: “High-growth mid-sized businesses played a leading role in the UK economic recovery after the global financial crisis. 

“With Brexit and more uncertainty looming, this is the time for the Government to engage with this part of our economy and draw on their natural energy, ambition and entrepreneurial spirit to create a ‘new economy’ and help the UK succeed post-Brexit.

“Despite being the economic engine of our economy, mid-sized businesses are often undervalued and overlooked. Part of the problem is that they include a wide spectrum of family-owned, private-equity-owned businesses and AIM-listed firms that do not have a single voice.

“They are also based in all areas of the UK.  By supporting mid-sized businesses growth, policymakers would also be helping to achieve the Government’s ambition of a regionally balanced economy that ‘works for all’.”

BDO’s research is based on an analysis of the FAME database of company information and business intelligence.

Mid-sized companies were classed as being either mid-market businesses with a revenue of between £10m and £300m, AIM-listed businesses or private-equity owned businesses. 

Large businesses were classified as those on the FTSE 350, while smaller businesses were classed as having a turnover of less than £10m.