agents of growth 21 Overlooked yet overperforming...


Our ’Agents of growth’ research clearly showed that ’overlooked’ MSBs have grown faster, employed more staff and contributed more to the UK economy during the past five years than SMEs and large corporates, says Grant Thornton, sponsor of the Solent 250. So, we ask, what more could MSBs achieve with greater support?


This has always been a question at the forefront for Grant Thornton and one of the key challenges raised as part of our Agents of growth campaign, which launched over two years ago, recognising the pivotal role MSBs play in the UK economy. Throughout the extensive research, the third iteration of which will be published this month, our subsequent recommendations have continued to drive the agenda and raise the profile of MSBs on both a local and national level, with Grant


More and better targeted support on exports


Our recommendations were: • To extend UKTI support to potentially include up to 34,100 high growth MSBs


• UKTI continues to increase the volume of trade delegations to higher-growth emerging markets, and ensure MSB representation on these trips


• The Department for Business and Skills (BIS) and UKTI promote existing schemes such as UK Export Finance more vigorously


• BIS explores incentivising corporate mentoring schemes


Closing the skills gap and finding the talent


Our recommendations were: • HM Treasury explores a National Insurance Contribution (NIC) exemption for apprentices of all ages in MSBs (both employers and employee) for the duration of the apprenticeship


• HM Treasury explores incentivising training and development with tax reliefs


• Industry and BIS work together to introduce more ’vocational accredited education’ under trade bodies


• BIS and HM Treasury should explore further devolving the funding for apprenticeships to businesses – not national bodies


Thornton consistently acknowledged as ’the voice’ of this valuable segment of the economy.


Some highlights


• We’ve held two rounds of Growth Summits (eight events nationally) engaging with over 300 business leaders from the mid market.


• We’ve held a number of Growth Insights breakfasts locally, in Bournemouth and Southampton, discussing our insight and perspectives on successful


Our progress


• UKTI has rolled out a programme of support for MSBs and is treating them as a priority


• We have heard positive feedback on both UKTI and UKEF from our clients. The Autumn Statement included an additional £45 million to connect British exporters to fast- growing emerging markets and to help first time exporters


• The Office of Tax Simplification recommended our proposal to raise the threshold for transfer pricing, to reduce administrative burdens faced by MSB exporters


strategies for growth – the latest event sharing how the Election results might shape future growth opportunities in the next four to five years.


• We’ve hosted two roundtable breakfasts with Lord Livingston to discuss how government can help UK MSBs to improve their exporting performance, at which representatives of the south’s businesses were present.


• We have raised our concerns in the House of Lords’ debates about the adverse effect that support implemented for SMEs would have on MSBs and, as a result, amendments are being discussed.


Unlocking growth potential


Our research into the mid market paints a picture, for the


Sharper definition of the MSB sector and consistent engagement


Our recommendations were: • BIS, the Office of National Statistics, MSBs and business advocacy groups agree a standard definition of MSBs


• BIS and Number 10 engage with mid-tiers by appointing CEOs from the MSB segment to all relevant advisory groups


• HMRC assign customer relationship managers to MSBs to reduce the administrative burden for MSBs


Our progress


• At the 2013 Autumn Statement, the chancellor announced the abolition of employer’s national insurance contributions for apprentices under 21 years old


• The 2014 Autumn Statement, following further lobbying by Grant Thornton, announced an extension of this to apprentices under 24 years old


• The Husbands Review of Training, for the Labour Party, has recommended consideration of tax relief to incentivise provision of apprenticeships


• In Autumn 2014, BIS backed a Grant Thornton-led proposal to develop a new business skills apprenticeship


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2015


A continued focus on access to capital


Our recommendations were: • The Government should double the Enterprise Investment Scheme funding to companies that have 500 employees and gross assets of £30m to encourage significant growth


• The Government continues its work to explore creating an aggregation platform to allow MSBs to access the UK bond market


• BIS work with business groups to help promote crowdfunding as a possible alternative to traditional finance


• HM Treasury explore a reintroduction of the Corporate Venturing Scheme (CVS), aimed at MSBs, to unlock capital


www.businessmag.co.uk Our progress


• BIS has started publishing statistics on MSBs and a standardised definition is starting to be used by CBI and others. We have had on-going discussions with BIS, Office of Deputy Prime Minister and Number 10 about policies to support MSBs


• HMRC has announced a new pilot MSB service that will provide more tailored support for MSBs


second time, of a vibrant and dynamic business segment, the unsung powerhouse of the UK economy. Yet, it faces a number of significant challenges. We outlined four areas in which, if the right support was given, MSBs would become an even more valuable segment for the UK economy – and we’ve made great progress.


Details: Norman Armstrong 023-8038-1114 norman.armstrong@uk.gt.com www.grant-thornton.co.uk/ agents-of-growth


Our progress


• The Government has now set up the British Business Bank, which has continued to support the Business Finance Partnership and has co-invested in crowd funding


• In February 2015 the prime minister announced a new £100 million ’Help to Grow’ fund to provide mezzanine and debt finance for growing MSBs


• The 2014 Budget announced measures to make crowd funding eligible for ISAs and FCA regulation has opened crowd funding to a wider group of investors


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