In May 2021, the Government launched the Help To Grow Scheme, to help small and medium businesses (SMEs) by providing them with the skills they need to grow their businesses.
According to Phil Hall, Head of Public Affairs & Public Policy at the Association of Accounting Technicians (AAT), over 90% of SMEs are not eligible to take advantage of the Help to Grow Scheme. The AAT has therefore written to the small business minister, Paul Scully MP, to call for changes to the eligibility criteria for the scheme.
What Is The Help To Grow Scheme?
The scheme is funded by the Government and aims at training small and medium businesses to enable them to grow.
The Help To Grow: Management course offers training to decision makers in small and medium businesses on topics such as leadership, marketing, employee engagement and financial management. The training is delivered by the Charted Association of Business Schools in an MBA-style programme.
Additional to the training, small businesses will also receive 1-to-1 support from a business mentor, peer-learning sessions, access to an alumni network and help to develop a business growth plan.
The Help To Grow: Digital scheme, which was launched in January 2022, offers SMEs free, impartial online support about how digital technology can help businesses to grow. And eligible businesses will also get a 50% discount on approved software, such as accounting or CRM software.
The Chancellor, Rishi Sunak, wants to see SMEs improve their skills and performance to aid the economic recovery from the impact of the pandemic.
Small businesses are key to our innovation and economy and will therefore be an essential part to our recovery from the pandemic, which is why we are levelling up their skills through the Help to Grow schemes.Rishi Sunak, The Chancellor of the Exchequer
Why Over 90% of SMEs Aren’t Eligible
So why are so many small and medium businesses not eligible for the Help To Grow scheme? The problem lies in the eligibility criteria, which are very restrictive. Businesses who want to participate have to meet all of the following criteria:
- the business has to be registered in the UK with Companies House or the Financial Conduct Authority’s Mutuals Register
- the business has to have been trading actively for a year before the date of the application, with an incorporation date at least 365 days before the date of the application
- the business has to have a minimum of 5 and a maximum of 249 employees
- the business must have at least one link of management in the structure (for the Management course)
- the business has to purchase the software for the first time (for the Digital scheme)
The main problem is the criteria that require businesses to have at least 5 employees to be eligible. According to a House of Commons report from December 2021, as of 1 January 2021, 75% of all businesses in the UK had no employees at all.
These criteria also exclude sole traders and businesses who work with freelancers or contractors. Furthermore, charities, who employ over 90,000 people, are excluded from participating in these schemes.
And of the 5.6 million businesses, 95% were classed as micro-businesses, which have 0-9 employees. As a result of these restrictive criteria, only 810 businesses had registered for the Help To Grow scheme by 31 October 2021.
Given that the target was 30,000 participants, this is an exceedingly low number of registered participants.
What The AAT Is Asking For?
In their letter to the small business minister, the AAT is now asking for changes to the eligibility criteria to give more businesses the chance to take advantage of the Help To Grow schemes.
First of all, they want the number of minimum employees to be reduced to one to open the scheme to more small and micro businesses. This is seen as the most restrictive criterium.
Another change the AAT wants to see relates to the eligibility of small businesses who have participated in the Small Business Leadership Programme. Currently, these businesses are excluded from participating in the Help To Grow schemes.
This means over 3,000 businesses are excluded, who have been shown to engage with the help and support that is offered. The AAT argues, that as both programmes are completely different, there is no reason why participants from one programme should be excluded from the other.
Especially because the whole business is excluded and not just the staff members who have participated in the leadership programme.
Another area where the AAT is asking for a change is that only one person per company can participate in the Help To Grow scheme Management course. Given that already only a small percentage of businesses are eligible, this restriction further reduces the uptake of that scheme.
Finally, the AAT wants charities to be able to participate as well, given that they employ 90,000 people and would benefit from the training.
The Help To Grow schemes are a good idea and, in particular, small businesses and start-ups could profit enormously, if they were able to participate. Opening up the scheme to more businesses could boost the post-pandemic recovery.