The chancellor’s latest Spending Review represents a pivotal moment when it comes to investing in small businesses, young people, and skills of the future.
Rachel Reeves increased the British Business Bank’s total financial capacity by two thirds to £25.6bn. Additionally, £6.6bn has been ring-fenced specifically to help small businesses start and scale.
Why is this important? It’s clear that one of the main barriers to entrepreneurship is finance. In fact, 15% of small businesses say easier access to funding and grants is the most important action the government can take to support SMEs, according to Simply Business research.
It’s great to see this increased investment being made available – let’s hope we see more people able to then take fledgling ideas into profit making businesses as a result. That will only happen if the access to these funds is highlighted and made simpler.
Opportunity to level the playing field
The government is also focused on driving growth across the UK, with more targeted funding to support entrepreneurs through regional programmes.
This includes new Nations and Regions Investment Funds, greater regional innovation, and an expanded regional angels programme from the British Business Bank.
Directing investment across the UK is imperative to reducing inequality when it comes to business funding. As it stands, a young person in London is nearly four times more likely to start a business than someone in the East Midlands.
While I’m under no illusion that there’s a quick fix, I hope this latest investment will go some way to levelling the playing field.
Investing in technology and training
The government’s commitment of £1.2bn for training and apprenticeships each year by 2028-29 represents a significant drive to connect youth ambition with business growth.
A report into young entrepreneurship by Simply Business and the Federation of Small Businesses reveals out of the 58% of young people who want to start their own business, only 16% succeed in doing so. This is a waste of huge untapped potential.
When I think of the economy of tomorrow, I picture the next generation innovating, embracing technology, and creating the jobs of the future. But we need this investment now to empower our young people to explore these opportunities.
Addressing the skills gap
The job market is changing and there’s growing concern that people won’t have the necessary skills to match what companies need within the next five years. And 62% of organisations are already facing skills shortages in the UK.
As a mum of senior school age children and with nearly one million young people not in education, employment or training, I worry for their job prospects. We need innovation – fast.
The government plans to invest £187m to bring digital skills and AI learning into classrooms across all communities, preparing citizens of all backgrounds for jobs of the future.
Beyond this, we need to make sure young people are getting the education they need to flourish in business. Not only do they need to be excellent in their trade, they need to be able to manage budgets, taxes, marketing, and more.
Final thoughts
When it comes to breaking down some of the barriers to entrepreneurship – funding, knowledge, and experience – this is a vital step forward.
With more businesses starting up, growing, and flourishing, our economy can only benefit. And with any luck this new investment will create a host of new job opportunities too.
But we must keep up momentum. This can’t be a ‘once and done’ approach – there needs to be certainty in the investment and support continuing to break down the barriers. I’d recommend the government continue taking practical action that will empower the young entrepreneurs of tomorrow. We all stand to benefit.
