London businesses say Government and Mayor of London offer little help during recession
March 29th 2009 The Government’s policies to help London businesses fight the recession have had little positive impact and are largely irrelevant according to the London Business Survey 2009, published 20th March 2009.

300 companies across the capital responded to the survey and the results reveal that the emphasis on training and tendering offers them little direct help, while VAT and interest rate cuts have not provided the stimulus to encourage trade that the Government expected.

The survey, carried out by Business Junction and Clarity between March 3rd – 19th 2009, invited companies across London to submit their views on how the recession and credit crunch has affected them directly and their outlook for 2009.

The key findings of the survey are:

• The business support programmes of the Government, Mayor of London’s office and London Development Agency have failed to make a difference to London businesses

• Most London businesses have never tendered for a public contract and those that have find tendering to be a poor investment of time and money

• Most London businesses ignore training schemes such as Train To Gain

• 55% of Enterprise Finance Guarantee scheme applications have been rejected, whilst two-thirds of general loan applications are also rejected

• London businesses have not been assisted by VAT and interest rate reductions
Details90% of London businesses have found the various initiatives for business developed by the Government, Mayor of London’s Office or the LDA are largely irrelevant to their needs and have had no impact on their company’s ability to keep trading.

The much-publicised twin planks of the Government’s assistance to businesses – tendering and training – are also irrelevant for most London businesses. A third of companies have tendered for public contracts, but two-thirds of these found tendering a poor investment of time and money.

Although the Government emphasises the importance of training during the recession, only 15% of London businesses have accessed Train To Gain or similar programmes.

Lending applications have started to be made through the Government’s Enterprise Finance Guarantee scheme, but that most businesses have seen their applications rejected.

The VAT reduction has had no positive effect for 70% of businesses, with more than 50% of London businesses surveyed saying they had not benefitted from interest rate cuts.

Commenting, Mark Herring, Director of Business Junction said,

“The Government’s and Mayor of London’s efforts to help businesses in London, especially those small and medium enterprises so key to employment opportunities in the capital, have been poorly targeted and are not the answers to business requirements at this moment.

“The Government’s only direct intervention for business has been to increase spending on training programmes, yet these are not wanted by London’s firms. This may be because the emphasis on leadership and management training seems bizarre when workforces are being reduced. Does the Government seriously think a company’s priority is to train workers while it struggles to find work?

“The emphasis on tendering as an opportunity for all also seems misconceived. The vast majority of companies which have tendered are left feeling it was a waste of time and money. The process is complex, with issues like indemnity insurance meaning small businesses actually have to pay just to be allowed to make a bid.

“If public contracts are designed to help all companies find new opportunities to supply, the public tendering process itself needs an overhaul to make it easier, fairer and more worthwhile for smaller companies.

“The London Business Survey shows that most companies seeking additional funding borrowing through the banks or the Enterprise Finance Guarantee scheme are rejected, despite recent claims by the Government.

“The government needs to start actively engaging with every sector and size of business in London. Business needs relevant assistance programmes that understand their actual requirements of businesses so that they can retain staff and start to grow again.

“We need more understanding from the Government and some figures from the London agencies about how relevant and effective their current policies around business support are.

“This recession is different from previous ones. Networking, the internet and other new technologies have changed the ways London companies do business with one another. The Government and Mayor have a lot to learn from smaller businesses. They need to quickly start engaging directly with all London companies so that together we all help rebuild the London economy.”

Media Contacts

Mark Herring (Press enquiries)
0771 218 3799 e: mark@businessjunction.co.uk
Emma Perris (General network enquiries)
020 7739 4200 e: admin@businessjunction.co.uk

Notes to editors
The London Business Survey was produced by Business Junction in association with Clarity. The survey, hosted online, was carried out between March 3rd – 19th 2009.
Business Junction is London’s leading independent business network, with a membership of over 350 companies drawn from across London business sectors and areas. It holds 80 networking events per year and published the London Business Directory 2009 on March 25th.

For more information, please go to www.businessjunction.co.uk
Clarity is an online feedback company, producing surveys and market research for a range of clients across the UK.

For more information on the methodology of the survey and to order more detailed analysis and breakdown of results, please go to www.clarityuk.net or email Paul Collins [paul.collins@clarityuk.net

Additional Information

BUSINESS JUNCTION is London's leading independent business referral network, creating connections and trading opportunities for hundreds of companies across London and the south east.

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