MPs face exposé on small business aid

MPs are facing an election roasting from entrepreneurs because of the future publication of a report to determine how ministers have spent money helping the small business sector.

Although not due from the National Audit Office until May, the report will probe into the different ways a £2.5 billion budget for SMEs is being spent to support entrepreneurs.

The document was due to be unveiled by the turn of the year, but the delay until the expected election month suggests the NAO has been saddled with a larger than expected caseload.

According to the Financial Mail's Enterprise section, the audit office has already spotlighted, "the sheer number of fragmented stakeholders across government."

The watchdog is also tasked with casting its eye over the wide range of enterprise schemes, grants and initiatives run under the DTI's flagship Small Business Service.

It is understood the SBS is at the heart of the enquiry, and will be tested on delivery of enterprise services such as managing the Small Firms Loan Guarantee and other programmes run from its website.

While it is likely that no specific details will be disclosed as to the success of individual schemes or companies, there will be a reading to see how well taxpayers' money has been spent.

The spending watchdog's investigation will also examine how much progress has been made towards achieving the stated goals of the small business sector.

A spokesman added: "Our study will determine whether the Small Business Service is making an effective contribution to the Government's overall agenda for small business."

In a separate move affecting entrepreneurs, Deloitte has warned that one pre-election tax sweetener of March 16 will be closely followed by tax rises of a staggering £10 billion.

The accountancy firm predicts that any pre-polling tax offerings will not only be immediately reversed, but also subsequently joined by a "major deterioration" in the public finances.

Roger Bootle, chief economic adviser, says Chancellor Gordon Brown will have no choice but to issue huge post-election tax rises based on his mis-management of the public finances.

 

7th March 2005

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