FSB: Business productivity can be improved

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A new report has highlighted the need for UK productivity improvements

Productivity is an issue for businesses of all sizes in the UK and delivering improvements in this key area has been the focus of a new report from the All Party Parliamentary Small Business Group (APPG), supported by the Federation of Small Businesses (FSB).

Overall, the report revealed that productivity levels in the UK remain 17 per cent below the average witnessed in other G8 nations - Canada, France, Germany, Italy, Japan, Russia, the UK and the US.

As such, the body has issued a warning that steps must now be taken to promote greater efficiencies within businesses of all sizes in order to help boost levels of productivity in the years ahead.

To this end, seven key drivers have been recommended by the APPG and FSB to bolster small to medium-sized business productivity in the UK, with the first being the need for a simplification of the business tax system, as well as the setting of the Annual Investment Allowance and other investment incentives at attractive and stable levels to drive productivity gains and improve business growth.

Access to superfast broadband was also revealed to be a key driver of productivity improvements for UK firms, as companies that are left in the broadband slow lane are less likely to be able to compete in what is now a digital world.

Competition both domestically and overseas can be improved through a commitment to universal superfast broadband and this is an area that while already receiving considerable investment and attention, more could still be done.

Meanwhile, the report states better support for business innovation was also highlighted as a key driver of productivity improvements in the years ahead, while the introduction of measures to tackle ongoing skills shortages is a must.

Investment should be targeted on regional growth, with infrastructure to help in the creation of connected networks of business development - Local Enterprise Partnerships need to be strengthened and made more locally accountable, while councils should be given more power to support their local firms.

Small businesses across the country should have greater opportunities to bid for and be accepted on public procurement contracts, with the APPG suggesting  the National Audit Office should publish regular performance data on the number and value of public contracts going to small, medium and micro-firms in the UK.

Finally, the report recommended  UK Trade and Investment be given greater support and investment for the long-term, ensuring the body can adequately support small and start-up businesses' ambitions to export.

Brian Binley MP, chair of the APPG inquiry, said: "Small businesses have been responsible for much of our recent economic growth and addressing the barriers that hold them back and giving them the right support is crucial to closing the UK's productivity gap."

Meanwhile, FSB national policy chairman Mike Cherry added: "This cross-party report concludes that while ultimately improving productivity is an issue for the private sector, the next government has an important role to play in addressing this long-standing weakness, regardless of which party or parties form the next administration."