Rural small firms present new ideas to become ‘economic growth-belt’ against backdrop of inequalities
Business / Sat 15th Apr 2023 at 07:20am
SMALL firms in rural areas face a unique set of challenges that will continue to stunt their growth, unless policymakers step in to make serious change, a new Federation of Small Businesses (FSB) report shows.
The Growth Belt: Supporting Rural Small Businesses highlights the way rural businesses are struggling against a backdrop of mounting energy costs, poor transport links, and unreliable broadband.
It also emphasises the diversity and ambition rural small firms have – and how rural areas hold enormous potential for businesses to thrive and contribute to the wider economy.
The Government’s 10-point plan for rural productivity from 2015 has also made little progress, leading to £43billion in lost economic contribution – but FSB’s report provides an opportunity to reverse this.
Findings include on average through 2022, quarter-on-quarter:
The report also highlights the impact of poor broadband connectivity in rural areas:
Recommendations to address the ‘rural deficit’ include:
On energy, 18% of rural based small firms have seen their energy costs triple or worse within the space of a year.
This comes two weeks after the Energy Bills Relief Scheme (EBRS) came to an end, which gave firms breathing room to cope with soaring energy bills. To help combat this, FSB is calling for energy providers to allow small and vulnerable firms who entered into a new energy agreement during the high-cost wholesale energy period to ‘blend and extend’ their contracts – effectively, the right to renegotiate a sky-high fixed-term early – to reflect the much lower wholesale energy prices currently available.
Ann Scott, Development Manager (Essex), said: “Our research highlights how rural small firms are the bread and butter of their communities, full of diversity and ambition. They provide local employment opportunities, drive innovation, and generate economic growth.
“But after decades of promises from the Government, inadequate transport and poor digital connectivity are still putting these rural firms at a disadvantage. This hinders their potential to contribute even more to a sustainable and thriving economy. The VAT threshold is a barrier to growth for many, and charge anxiety and the need to use off-grid fuels means that the transition to net zero needs attention.
“Our report offers concrete, feasible solutions to narrow the productivity gap and unlock these rural small firms’ full potential – not just for now, but for generations to come. The Government has the power to create a more sustainable and resilient economy that benefits everyone, no matter how small or how large their rural community is.”
Kevin Thorpe, Director of Auxilium Curo Ltd, an IT Services and IT Consulting company in Thorpe le Soken, Essex, added: “Many of our clients have been forced to invest in alternative solutions, such as satellite internet or mobile data plans, to compensate for unreliable internet services. These normally come with higher costs, including installation fees, subscription fees, and data usage charges, which impact the business’s bottom line.
“But for many small business owners, it’s not just about the money. Many people choose to shop with a small business because of the personalised service they can offer, but unreliable internet can impact on customer engagement, online support, and virtual interactions. This break in a seamless customer experience can negatively impact customer satisfaction and loyalty, which many small business owners pride themselves on”.