A multimillion pound training scheme aimed at helping small UK businesses become more productive has been revealed in the 2021 Budget.
Chancellor Rishi Sunak said the initiative - Help to Grow - could benefit up to 130,000 small and medium sized businesses (SMEs) across the country.
It comes as the government looks to get businesses booming once more, as the country emerges from the cruel and costly Covid pandemic.
What is the Help to Grow scheme?
The Help to Grow scheme will give SMEs access to a range of management training courses and provide online training seminars to support firms.
The government wants UK businesses to be seen as leading the way out of the clutches of the coronavirus pandemic which has restricted large parts of the economy.
Help to Grow has been set up to empower SMEs to become more productive in the short and long term by providing access to some of the UK’s top business schools.
Firms will receive expert technology advice and discounted software, as the UK’s elected leaders plot to provide a digital focus for a post-pandemic world.
How will Help to Grow work?
The Government said that firms will have access to digital and management services under the new scheme, which is expected to run in 12-week programmes.
SME bosses will be offered 50 hours of tuition from the country’s leading business schools, as well as one-to-one support from a business mentor.
Help to Grow’s digital offer will create a new online platform for free advice on technology that will help businesses to save time, reduce costs, and reach more customers.
Eligible SMEs will also be given vouchers to get up to 50% off the purchase of new productivity-enhancing software, up to £5,000 each.
Mr Sunak also committed £126 million to create 40,000 additional traineeships in England and offered cash incentives for employers who take on an apprentice to £3,000.
How much will the Help to Grow scheme cost?
The overall cost of the Help to Grow scheme is expected to total £520 million.
Yet the benefits could far outweigh any initial outlay with improved SME performance potentially adding an extra £100 billion to the UK economy, according to the Treasury.
Mr Sunak said: “Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity – so it’s vital they can access the tools they need to succeed
“Help to Grow will ensure they are embracing the latest technology and management training, fuelling our Plan for Jobs by boosting productivity in all corners of the UK.”
How does the UK’s productivity compare to other countries?
The UK is lagging behind members of the G7 (Japan, France, Italy and Canada) when it comes to comparing the output per hour worked across each country.
Whereas the gap, using the same metric, shows the UK 20% less productive than the US and Germany.
The Bank of England’s chief economist Andy Haldane has looked at the productivity gap between the top and bottom performing companies in the UK.
He said the difference was materially larger in the UK than in the US, Germany or France.
The gap between the top and bottom-performing 10% of companies in the service sector is 80% larger in the UK than in its international competitors, states the Guardian.