Concern over fall in new business start ups – NEN’s response

The Centre for Entrepreneurs (CFE) is reporting a significant fall in business start-up rates in 2017. In 2016 the number of business start-ups was 657,790 and in 2017 it reduced to 589,008 – a dramatic fall of 68,782. CFE’s view is that the majority of the reduction is down to the Government’s clampdown on ‘disguised […]

The Centre for Entrepreneurs (CFE) is reporting a significant fall in business start-up rates in 2017. In 2016 the number of business start-ups was 657,790 and in 2017 it reduced to 589,008 – a dramatic fall of 68,782.

CFE’s view is that the majority of the reduction is down to the Government’s clampdown on ‘disguised employment among public sector workers’ – this is where contractors have previously been used in the place of employees.

However, more concerning is the CFE suggestion that there is an underlying reduction in start-up numbers which they put down to ‘ the cumulative effect of business rate rises and other regulatory burdens, combined with muted encouragement of entrepreneurs from the current government’.

Graham Marley, Chair of National Enterprise Network said of the report, “The findings of the CFE report are both interesting and concerning. The start-up figures over the last few years have become increasingly distorted, however I believe there is an underlying issue. In recent years with cuts to both national and local government budgets, support to start-ups has decreased. Enterprise Agencies around the country are working hard to provide support. In our last Impact Report, they supported over 40,000 people thinking about starting a business. However, they are doing this with less and less funding being available. It is time for the Government to do more.”

Graham added, “If we are to ensure both high start-up rates, and also high survival rates and improvements in productivity, businesses need more support in the start-up phase. Businesses taking support are 20% more likely to survive and are more likely to continue to take support down the road, enabling higher growth. Government should be looking to introduce a national self-employment offer for all.”