Written by: Keith Tully
Reviewed: Thursday 11th May, 2017
Small companies throughout the UK could be facing a “business support black hole” in the next decade if funding currently allocated to them from the European Union is not replaced after the Brexit process is complete.
That’s according to the Federation of Small Businesses (FSB), which is warning that small-scale operators nationwide could lose out on billions of pounds worth of funding once the UK leaves the EU, as it is currently in the process of doing.
The organisation has even suggested that the loss of support for its members could leave Britain at risk of a significant post-Brexit economic slowdown.
In making its case, the FSB points out that the EU has earmarked some £3.6 billion for supporting the competitiveness of the UK’s small businesses during its current funding round which runs until 2020.
However, with Brexit scheduled to have been completed within the next two years, there are concerns that large numbers of small companies across the country will may soon be left struggling to stay in business or to pursue growth opportunities.
“Small businesses across the country are staring into a business support black hole from 2021,” said the FSB’s national chairman Mike Cherry in a statement.
“This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions.
“If the next government is serious about developing an Industrial Strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU,” he said.
While the FSB has highlighted its fears that a sudden withdrawal of support for small businesses from the EU could have widespread damaging ramifications, it has also suggested that the existing small business support infrastructure is far from perfect.
Mr Cherry has said that the Brexit process opens up the potential for new and improved systems of small business support and funding to be established in the UK.
“Small businesses are clear that EU-funded support is a vital lifeline. But they’re equally clear that the process for attaining that support can be a real battle,” the FSB’s chairman said.
“Brexit marks an unprecedented opportunity for fundamental reform,” he said.