Civil servants need to ‘get to grips’

David Cameron has been attacked in an open letter for failing to adequately support small and medium-sized enterprises (SMEs), with civil servants at the top of a list of grievances for not ‘getting to grips with the real problems’.


David Cameron has been attacked in an open letter for failing to adequately support small and medium-sized enterprises (SMEs), with civil servants at the top of a list of grievances for not ‘getting to grips with the real problems’.

David Cameron has been attacked in an open letter for failing to adequately support small and medium-sized enterprises (SMEs), with civil servants at the top of a list of grievances for not ‘getting to grips with the real problems’.

In the letter addressed to the Prime Minister, the SME Innovation Alliance says that while the group applauds Cameron’s ‘aspiration’ for a more entrepreneurial Britain, there remains ‘severe structural barriers’ that are ‘actively’ stopping the country from achieving growth.

Included in the raft of issues the lobby group raises is an accusation that Whitehall officials and public sector workers are failing to listen to and understand the needs of SMEs before setting policy. In other complaints, the banks are still not lending sufficiently, the patent system is ‘effectively broken’, and the university sector has become ‘bloated’, the alliance claims.

Jointly signed by chairman John Mitchell and director Chris Wilde, the letter initially congratulates the Prime Minister on his recent campaign to raise the profile of SMEs and improve conditions for business owners.  

‘We applaud your aspirations and we believe that the UK high technology SME sector could rise to this challenge …  However, after years of governments following a very different course, there remains severe structural barriers that are actively preventing this renaissance,’ the letter states.

‘Moreover current actions of government are perpetuating the difficulties we face: given your stated aims we can only presume that this is simple inertia in Whitehall, and, perhaps, a lack both of direct experience and of specialist expertise in the civil service. Unless and until HMG gets to grips with the real problems, we do not believe that your plans for the economy can succeed.’

The group adds, ‘There needs to be new understanding within the civil service that innovation for the most part is carried out by SMEs, not major corporations nor universities. SME representation must be built into the strategic processes that determine the structures for government support. Civil servants need to listen to SMEs first and define policy later: at the moment, the opposite remains the case.’

The letter comes less than two months after Cameron launched the much-publicised StartUp Britain campaign and a month following the promoted widely welcomed ‘Budget for business’.

Though, Government workers aren’t the only ones to come under fire. The group says the banks are still not lending sufficiently for SMEs, and at the same time, most companies aren’t ‘willing to borrow from the banks’.

‘Trust has been lost,’ the letter explains. ‘We desperately need new financial institutions, or radical reforms of those that exist. Without change, their potential source of funding for SMEs to develop long-term industries, that can build the foundations for future jobs and export success, is not realistically available.’

Comment has been sought from the Prime Minister’s office.

The full letter can be read here.

Todd Cardy

Todd Cardy

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

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