Member Article

Small businesses reject government advice

Small businesses choose not to use free guidance from government, having more confidence in private sector advice, according to a government-funded review of small firms.

The Anderson review, chaired by entrepreneur Sarah Anderson, was set up by the government to identify and evaluate the ways that small companies interact with Whitehall to ensure that they comply with laws on issues including employment, environmental standards and health and safety.

The review of more than 750 small and medium-sized firms found that government guidance left firms with a ‘great deal of uncertainty’ that put them off using the free advice services.

The Anderson review found that almost half of businesses paid for external advice, at a cost of at least £1.4bn a year. Over a third of small companies do not use any advice service at all.

The report will be published later this week and will make a series of recommendations that it estimates will save small firms over £800m a year.

Recommendations include new ‘quick start guides’, face-to-face advisory sessions and the creation of a single point of access for SMEs seeking government guidance.

Sarah Anderson said: “Many small businesses do not use and have little confidence in guidance from Government. Where there is good guidance, they don’t know where to go. Instead they choose to pay for advice, which they could get free or which might make them do more work than is necessary, to comply with the law.

“Improving the quality of, and access to, government advice is vital if we want to see better understanding of, and compliance with, the law. The vast majority of small businesses want to comply with the law. Government should give them a cost effective and efficient way for them to do so.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .