Member Article

Austerity measures put "vulnerable" cities' SMEs at risk

Austerity measures in the UK’s most vulnerable cities could kill off SMEs, suggests a city-by-city health check carried out by the Centre for Cities.

The independent think tank for UK city economics suggests Hull, Liverpool, Sunderland, and Middlesbrough are among the most at-risk because of their reliance on local trading.

Cambridge, Crawley and Reading are among the most insulated from the impact of job losses, welfare cuts and constrained wages.

Alexandra Jones, Chief Executive of Centre for Cities said: “Small and medium sized businesses are the lifeblood of the UK’s economy but Small Business Outlook flags that many have been particularly affected by the impact of the recession on their local economies. They will face challenges ahead as further austerity measures have a knock on effect on local demand for their services.

“Government must recognise the importance of local economies to SME performance and resilience and ensure that local partners, including Local Enterprise Partnerships, have a clear role in delivering national business support policies.

“High quality, evidence based Local Growth Plans will be critical to helping UK cities navigate the bumpy road of recovery, while support from national organisations such as UKTI, as well as local partners will be vital to helping SMEs diversify their customer base and even move into exports.”

Richard Coleman, director of SME from Zurich said: “The SME landscape is in a period of significant change influenced by increasing globalisation and new technological developments among other things. We are also seeing the transformation of the traditional high street and these trends are having an increasing impact on the growth opportunities and risks for local small businesses – from the tradesman to the high-street retailer and the exporting manufacturer.

“Cities have a significant role to play in helping their constituent small businesses capture the evolving opportunities and address the emerging risks; it is important that both local government and local business groups not only assess their current small business base and its comparative strengths, but also understand and plan for the changing shape and challenges of the SME sector on the horizon.

“Doing so will allow cities to provide a healthy backdrop of support for local small businesses, build a resilient local economy and ensure long-term economic growth, diversity and opportunity.”

This was posted in Bdaily's Members' News section by Tom Keighley .