England & Wales Democracy, devolution and governance, Economy and regeneration

Steps for local leadership to help small businesses thrive


Photo by Tim Mossholder on Unsplash

In this article, Archie Ratcliffe from the Federation of Small Businesses outlines the role local authorities can take in supporting local businesses and LGIU’s Greg Stride highlights the findings of our recent local government finance survey in relation to local businesses.

Archie Ratcliffe, Federation of Small Businesses

Small businesses and the self-employed are a major economic and socio-economic driver at a local, regional and national level. When small businesses and the self-employed succeed, so do local communities and economies they serve. At the Federation of Small Businesses (FSB), we see their vital contribution every day as we work to bridge the gaps between small businesses and local authorities.

As in previous years, FSB has produced its Local Leadership document for local authorities across England that have upcoming local elections. FSB’s Local Leadership document highlights the challenges and opportunities affecting small businesses and sole traders in what have been unprecedented times. It draws on the experience and expertise of small businesses and the self-employed, complimented by FSB’s policy experts, network of volunteers and area representatives.

Local leadership is important in providing small businesses with the confidence to grow, invest and deliver for the communities they serve. This document aims to further strengthen the relationship between local businesses, the self-employed, business groups and local authorities.

With this in mind, FSB has put forward a series of steps that local authorities can take to both engage with and support local businesses on an ongoing basis.

Read FSB’s recommendations here.

Dr. Greg Stride, LGIU’s Local Democracy Research Centre

Our recent report: the State of Local Government Finance 2023 found that over half of all councils are cutting spending on services in order to balance their budgets. Of all council services, business support was the most likely to be cut, with around 27% of all councils saying they were reducing spending on the service in 2023/2024.

At the same time, the UK government announced in their spring budget their long-term commitment to 100% business rate retention, meaning that the success of local businesses will become more and more important to the health of local government finances.

Alongside this, the government announced their intention to shift the responsibilities of Local Enterprise Partnerships onto local governments. This will give councils greater responsibility over local economic priorities and communication with local businesses.

The situation looks difficult for local councils, who will be trying to balance these new responsibilities, and eventually new financial arrangements, with the many other pressures that weigh on them.

With that in mind, the FSB’s recommendations are a useful tool for local governments to understand the perspective of small businesses and the self-employed. Strong communication between local governments and small local businesses has never been more important, and this document, as well as recommending ways for local governments and small businesses to engage, is in itself a good example of how the sectors can clearly and concisely lay out their priorities and steps to take for improved cooperation.

The Local Democracy Research Centre brings together experts, policy makers and academics to do practical research on some of the biggest challenges for the sector and to shape the future of local democracy. We have published research on local government finance, climate change, and devolution, and will be conducting research on electoral administration and comparative local government finance in the future. 

We are always looking for new ideas for research on local government and democracy. To get in touch, please contact [email protected] 


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