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The Rt. Hon. Patricia Hewitt

Business Link National Conference
The Rt. Hon. Patricia Hewitt


Tuesday, October 19, 1999


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Delighted at the opportunity to speak to so many of the key individuals in the local business support world

Must start with appreciation and thanks for all your hard work in the last year, not just in satisfying customers but in showing so many how to grow and expand their businesses.

My thanks as well for the highly constructive approach you have taken to the challenges of the Small Business Service. Your mature and professional contributions have reflected very well on you and your leadership.

I must make one thing clear: Business Link is by no means perfect but I know it is way, way better than anything that went before. In setting up the Small Business Service, Government is branding Business Link a success to be built on, not a failure.

I have spent much of my working life running not for profit businesses. Let me stress that they were designed to be not for profit! As some of you know, I spent nearly ten years running the national council for civil liberties - now liberty ? and later helped to start and run the institute for public policy research, a charitable company that went from start-up to over a million pounds in about 18 months.

My years at liberty in particular gave me a great deal of experience of the typical challenges facing the small business owner ? struggling with the cash flow, chasing up late payments in order to make sure that there was enough money to pay the staff at the end of the month.

So I start with at least some personal experience of what our customers - small business owners, start-ups and growing companies ? have to face every day of their lives.

When I started working in the not for profit sector, more than twenty years ago, we didn?t think of voluntary organisations as small businesses. There?s been a real change since then. Charities and community groups have realised they need to be far more business-like in their operations; they need to find commercial sources of income instead of depending solely on donations and grants. At the same time, businesses have realised they need to be more socially responsible - to play a full part as corporate citizens, not out of altruism, but because they have a bottom-line interest in doing so.

That process of learning from each other, almost a blurring of the boundaries between the profit and the not-for-profit sector, is part of a much bigger shift. We have moved beyond the old political divisions. In the old politics, you had to choose between a successful economy on the one hand, and a fair society on the other. Both the old left and the new right agreed that social justice and economic efficiency were incompatible: they just chose opposite sides.

But it is central to our philosophy, in new Labour, that we reject that false choice. In today's global knowledge economy, we no longer have to choose ? we can no longer afford to choose ? between social justice and economic efficiency. The policies we need to enable everyone to play a full part in our society and our economy, the policies we need to tackle the evil of social exclusion, the policies that will enable everyone to find and fulfil their potential, are precisely the same policies we need to create a dynamic modern economy. Creating opportunities for all ? that, quite simply, is how we build both a strong, inclusive society and a dynamic, modern, successful economy.

Government doesn't create wealth. Businesses do.

But government has a responsibility to business. To create a stable economic environment. A favourable tax regime. A high standard of education and skills. Effective competition. Regulate intelligently ? making sure we only regulate where it is necessary and, that when it is necessary, we regulate as simply and efficiently as possible.

We also have to ensure that our smaller businesses get the support they need. They are the future of our economy and deserve the highest quality of business support.

There are those who say that government should just sort out regulation, get off the backs of small business, and forget about business support.

But at the same time, we know that our small businesses ? and particularly our very smallest ? are bottom of the OECD league tables when it comes to using computers and the new communications technologies.

We know that a great many small businesses don't have effective processes for issuing invoices and chasing up payments.

And we know that even more small businesses have trouble getting the financing they need ? and the problem is even worse for women and black entrepreneurs.

If we are going to get more small businesses surviving. More small businesses succeeding and growing. More world-class small businesses. Then we need world-class business support services.

That is why we are creating the small business service. Not on our own, but in partnership with the private sector.

Consultation response

We have had some 700 responses to our consultation on the small business service. I'm very grateful to all of you for taking the time to give us your ideas.

We'll be analysing the responses carefully in the next few weeks. But there are already some clear messages coming through.

You are telling me that you don't want change for change's sake.

I agree. We?re not going to tear up everything that's been achieved since business links were created. We're going to build on those foundations.

But change we need. In this increasingly competitive world, no business, no organisation can stay still. We can't afford to be held back by the forces of conservatism - small-c conservatism ? who say that we're doing all right as we are.

You are telling me that you don't want yet another new brand.

I agree. The business links brand is well recognised and well thought of, with awareness levels close to 70% in MORI surveys. So the small business service will go to market locally through the business links brand.

You are telling me that Government is part of the problem - constantly confusing the customer - and business links - with endless schemes. You want the system simplified.

I agree. And one of the top priorities for the new Chief Executive of the SBS will be to review all the schemes. Not to cut back on the variety of support we offer. But to make sure that we offer one seamless service not hundreds of different schemes.

But even more important than what you're telling me, is what our customers are telling all of us.

Our customers ? the start ups, the self-employed, the small businesses struggling to survive or starting to succeed ? are telling us that they want the small business service run by someone like them.

I agree. And although the chief executive will hold a very senior civil service job, he ? or she ? won't be a civil servant by background. They'll know what government looks like when you and your partner are doing the accounts late at night on the kitchen table.

Our customers are telling us that the best business links are outstanding, but they're not all good enough.

I agree. That?s one of the main reasons we're creating the SBS ? to make the best universal. We will seize the opportunity created by a smaller number of areas ? about 50 rather than the present 80 ? and the process of franchising to ensure that every business links service delivers to a consistently high standard.

Our customers from the minority ethnic communities are telling us that business support services are out of touch and unapproachable. They want services tailored to their needs ? delivered by people from all our communities.

I agree. And I expect to see business links helping afro-caribbean and asian entrepreneurs and employing afro-caribbean and asian advisers. Women as well as men. Young people and those from disadvantaged areas as well as the middle-class and middle-aged.

Our customers are telling us that they don't want government money going into layers of bureaucracy. They want the money in front-line support services, not car parks and carpets.

I agree. Every business knows it has to keep cutting its cost base to survive. Government has to do the same. And so do business links. I want to see what we spend on overhead and management cut. Not just in the areas where one larger BL will replace several smaller ones. But also in the areas where the boundaries are unchanged.

I want to see every proposal for the new BL franchise exploiting to the full the new information and communication technologies. Spending less on buildings. And more on business services.

Let me make a confession. I have a powerful bias against buildings, and I expect our new chief executive to share it.

I'd like to see some Business Links coming forward with plans for a virtual or near-virtual business model. No HQ building at all. But a network of business advisers working with laptops and mobiles. Based where they want to be and where they need to be ? working from home, or using a local business centre as a base. And where we do have premises, let's make sure that they are for customers as much as staff for seminars, consultancy and specialist advice, video conferencing, sector brainstorms, etc in space that's booked where and when it's needed.

There is no reason why people struggling to start a business in the coalfields of Nottinghamshire or Derbyshire should have to travel to get to a BL service. The service should go to them.

Let me tell you straight that I am a 'customer focused' Minister. Any proposal for one of our franchises that does not look like an excellent deal for customers will be rejected. They may get the opportunity to improve it but we will not hesitate to put any franchise out to open competition if we believe that will produce better value for the customer. We are giving existing partners 'first opportunity' but no one should think it is a foregone conclusion they will get the franchise.

My vision

In the centre, we have to practice what we preach.

That is why the small business service will establish itself as close as it can to a virtual business model.

Not command and control. But an internet-enabled knowledge network, created and maintained by the SBS. A network designed to support the franchisees, the business advisers, and small businesses themselves.

I envisage a network of data bases that include electronic registration services. Information about regulation. Interactive forms to simplify the system for business. Connections to British Trade International, the Information Society Initiative local support centres, University Business Schools and many others.

There's no reason why this network should be confined to the public sector. Trade associations and others might wish to contribute their specialist knowledge.

My vision is a service which customers can access electronically, by telephone, by fax, by mail or by walking through the door of their local Business Link. Customers should be able to access the service at a national level, a local level or through a sectoral route such as a trade association.

We should aim to provide a high quality information and signposting service to all SMEs, with the capacity to direct growth SMEs to the most appropriate source of value added service whether that be a business adviser, trade association or a national body.

All parts of this single service should be able to communicate with each other and have a common mission of giving each and every customer the best possible advice.

It means a single memory button for business advice on the PC and telephone of every SME, every bank adviser, every accountant, every citizens? advice bureau

It means that in the middle of a business to business e-commerce transaction a business adviser can be called in, on-line, on video, to advise on a finance or supplier problem.

The Gauntlet

Business Link in its short seven years has achieved much to be proud of. The quality and accessibility of business support is far better than ever before. But in too many places it is still not good enough for our customers needs.

The Small Business Service will be a strong voice for small business at the heart of Government. It will help us streamline business support and simplify regulation. And above all it will deliver first-class services to our customers - the small businesses whose success means success for all of us.
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