Most UK small businesses are not eligible for the government-funded Help to Grow: Management scheme.
The scheme, launched in May last year, aims to improve the management skills of SMEs. As of 31 October 2021, just 810 businesses had registered, falling way short of the 30,000-participant target.
One of the most restrictive elements of the scheme is that’s only open to businesses with five or more employees, excluding sole traders and businesses who mostly rely on freelancers or contractors in the process. The £750 participation fee also doesn’t do a great deal for the smallest businesses. Microbusinesses account for 95 per cent of all UK businesses, says a House of Commons report from December 2021. In fact, 75 per cent of the UK’s 5.5m SMEs have no employees at all, according to the Association of Accounting Technicians (AAT).
Calling for change
The AAT have sent a letter to small business minister Paul Scully MP asking him to widen the eligibility criteria of the Help to Grow: Management scheme so that more small businesses can make use of it.
Here are the main changes they want to see:
Allow businesses with fewer than five people to participate
The AAT argue that altering this restriction would open up the scheme to most of the UK’s small businesses. They add there is little reason not to reduce the threshold from five employees to one given that participants must be in a line management role to qualify.
Allow small businesses who went on the Small Business Leadership programme to participate
Almost 3,000 businesses participated in this introductory programme and it bears little similarity to the Help to Grow scheme, so makes no sense for these engaged businesses to be excluded. This restriction doesn’t just apply to the person who participated – it applies to the whole business.
Allow more than one person per company to participate
More spaces could be filled if more than one person in medium-sized or larger companies could take part.
Allow charities to participate
The UK’s 170,000 charities are small to medium-sized entities and employ over 90,000 people so should be eligible.
Phil Hall, Head of Public Affairs & Public Policy at AAT, told Small Business: “The government’s Help to Grow: Management scheme represents a fantastic opportunity for small businesses to improve their management expertise. It has been welcomed by many AAT Licensed Accountants and their clients but many more have complained that they are not eligible due to the restrictive nature of the eligibility criteria, which sees over 90 per cent of SMEs excluded because they employ fewer than five people.
What do the excluded businesses have to say about the Help to Grow: Management scheme?
Three microbusinesses spoke to us about why they’re not eligible for the scheme and what help they want from the government.
Hanna Dilley, founder of Benji’s Bites
I’m a small toddler food start up and was hoping to be able to benefit from the guidance and mentorship from the Help to Grow: Management scheme but unfortunately I am below the five-employee threshold.
I realised I wasn’t eligible for either of the Help to Grow schemes once I’d gone through the details. It is pretty clear when you dig into the schemes, but when they are first ‘sold’ to you, it implies all small business are eligible.
I think there is a bit of a gap with government help (as in support rather than funding) for small start- ups, who often still only have themselves or one or two employees and very limited funds. I think this is when small businesses really need help to reach the next, more scalable level. Support is often most needed initially, to help start-ups get to the point where they can start to grow and employ local people. I imagine it is at this initial start-up point where quite a lot of business fail as they struggle to take it from just being founder-run to growing enough to need a team.
The support that would help me grow the most is business mentorship – someone to help steer me in the right direction and hold me accountable to grow my business.
I’ve built my entire business by myself so far and now I’m at a point where I need to grow and scale, so [Help to Grow: Management] would add a lot of value and guidance. I don’t think the five-employee threshold is fair as it will exclude most small start-ups who would probably benefit from this help more than larger, more established businesses.
I was also hoping to be able to utilise the Help to Grow Digital incentive and invest in subsidised CRM & Accounting software to enable my business to become more efficient, but again I fall under the employee threshold.
Liz Barnes, managing director of Swetwipes
I wanted to apply for this scheme but only have two part-time employees and was therefore not eligible.
To keep fixed costs down and improve cash flow, I use a large number of self-employed contractors for everything from payroll to advertising and design.
Kinga Stabryla, founder of Brandspire
It was about three months ago when I was thinking of resources and strategies that would help me make successful first hires and then accelerate Brandspire’s growth. Up until that point I had used contractors only on an ad hoc basis. There was a 45 per cent increase in profits and a lot of new enquires, so I wanted to be prepared.
Naturally, after some Google searches and hearing how the government is investing in small businesses, the ad for the Help to Grow scheme appeared on my LinkedIn. I was over the moon! It was the answer to my current challenges!
I went on the website and thought, ‘I’ll check the eligibility criteria before doing anything, so I don’t waste two hours on an application. £500 is a doable investment.’ I read the criteria and got depressed that I literally don’t meet nearly all of them. Five people minimum?!
They should rename the scheme to ‘Help to Sustain’ rather than calling it ‘Help to Grow’, because anyone who matches their eligibility criteria already knows how to grow and it just shows small businesses that they weren’t even factored into this investment.