Watchdog hits out at lack of direction for business support

THE public spending watchdog yesterday said business support provided by the Government during the financial crisis lacked direction and accused ministers of failing to keep a close eye on taxpayers' money.

The National Audit Office said the Department for Business, Innovation and Skills (BIS) found itself under considerable pressure to act quickly and offer targeted support to businesses once the downturn was apparent.

Amyas Morse, head of the NAO, said: "The Department did well to balance the needs of businesses with protecting the taxpayer. However, it did not set out clear objectives, nor did it consistently record costs."

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The NAO found that management of the schemes was generally good, but take-up was lower than expected, partly due to the suitability of the support.

Edward Leigh MP, chairman of the Committee of Public Accounts,

said: "The Department chose a rapid launch of the schemes, instead of opting for rigorous planning and assessment.

"Support quickly reached businesses in need but the series of schemes lacked coherence and there was no overarching aim, which meant that actions were carried out on an individual basis rather than as part of a structured programme."

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Meanwhile, new research by the Federation of Small Businesses claims that Business Link Yorkshire has improved the quality of services to small business,

The FSB said satisfaction with the 35m-a-year service has grown from nine per cent in 2006 to 58 per cent at the end of last year.

Around 7,000 members took part in the survey, which was drawn up by the FSB's policy committee and Business Link Yorkshire.

The FSB said the improvement followed the replacement of a subregional approach with a Yorkshire-wide service. It also praised the "information, diagnosing and brokerage" approach to support.

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But it warned that some businesses were dissatisfied with some areas of the service, citing poor communication and follow-up after meetings with advisers.

The report said the Barnsley-based organisation should analyse reasons for dissatisfaction, develop measures to better manage customer expectation, improve marketing and highlight improvements which have been made.

The report added: "Business Link should, in the immediate future, focus its main services on supporting small and micro businesses to survive, and to grow, out of the recession with a particular emphasis on marketing, access to finance, training and financial management and forecasting."