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Rate Relief for Small Businesses: Consultation Paper

INTRODUCTION

Small businesses make a significant contribution to the Scottish economy. They currently provide some 46 per cent of all non-public sector employment. Small firms also contribute significantly to innovation and wider competitiveness in the economy and are likely to be a major provider of future employment opportunities. Rates account for a larger proportion of the costs and turnover of smaller businesses than they do of larger businesses and accordingly there is a case for providing relief for smaller businesses. However, it is important to be sure that any relief scheme is correctly targeted at those who need it, bringing real benefits to those who receive it without placing undue burdens on those who pay for it.

This consultation paper sets out proposals for rates relief for small businesses. They .have been developed following The Executive has had regard to suggestions from and discussions with business representative bodies, the Scottish Valuation and Rating Council and the Scottish Parliament Local Government Committee. in developing proposals for general rate relief for small businesses.

The specific proposals are:-

Comments on the proposals contained in this paper should be sent to:

Hilary Tristram
Scottish Executive
Non-Domestic Rates Section
Area 3-J
Victoria Quay
EDINBURGH
EH6 6QQ
Fax: 0131 244 7058
e-mail:
hilary.tristram@scotland.gsi.gov.uk
by 18 May 2001

SUPPORTING SMALL BUSINESSES

1. The Scottish Executive is committed to helping small businesses. The Framework for Economic Development highlights the importance of encouraging a culture of enterprise in all impacts of Scottish life and, inter alia, assisting new business formation and growth. The new Strategy for Enterprise "A Smart, Successful Scotland" also stresses the need to increase the number of new businesses and growing businesses, including those under-represented in business, and the role of the Enterprise Networks in providing quality business advice and information to help meet that challenge.

2. The current provision of small business support in the Scottish Enterprise area was recently reviewed on a joint basis by Scottish Enterprise and the Scottish Executive. This has led to a package of measures being developed to improve the quality and consistency of support across the network This includes a single Small Business Gateway, a single brand for the Scottish Enterprise area allowing easier access (electronically online at www.sbgateway.com

, by telephone 0845 609 6611 or by visiting one of around 50 outlets) to a consistent range of core support services geared towards potential business start-ups and small businesses. Four basic programmes are available through all outlets - business information; start-up support; business growth; and high growth starts.

3. The Scottish Executive is also working with Scottish Enterprise and Highlands and Islands Enterprise (HIE) to implement a new package of support measures (financial and non-financial) for women and other groups under-represented in business using an additional £1.5m of funding announced last year. This initiative combines the objectives of the Scottish Executive’s economic development, social inclusion and equality agenda.

4. The Scottish Executive will continue to work with the Enterprise Network to refine and improve Scotland’s business support framework. For example, in light of Scotland’s business birth rate performance, Scottish Enterprise has recently commissioned an independent review of the Business Birth Rate Strategy (by the Fraser of Allander Institute). The review should be completed within the next few months, and possible improvements to supply side support measures will be considered in light of the report’s conclusions. Improvements to the Small Business Gateway are already underway, and further consideration will be given to a number of new initiatives, including improved support for high growth businesses and a possible extension of business mentoring.

5. Improvements are also in hand in the Highlands and Islands. The Highlands and Islands Network will shortly be introducing HIE Starts, a new European aided programme, which will offer information, advice and discretionary financial assistance to small business start-ups that have the potential to contribute to the local economy. In addition, HIE’s Business Information Source is extending the reach of its services to provide a comprehensive business information service through a network of locally based Business Information Offices, one in each of the LEC offices. A key factor is the use of ICT to help develop innovative delivery methods including software development for outreach centres, targeted pro-active information services, such as environmental and R&D information and support for business growth areas.

6. Scottish Enterprise and Highlands and Islands Enterprise are also currently working together to address training and accreditation standards for business advisers on a national basis. A national training standard for all business advisors in the Scottish Enterprise and Highlands and Highlands Enterprise networks is currently being piloted. The target is to have all business advisors undertake the new training over the next 2 years. Links with similar work being done by the DTI’s Small Business Service (SBS) in England are also in hand.

7. In addition, linkages are being established between the Small Business Gateway and the electronic advisory services being introduced by the Small Business Service. Although the SBS does not have a direct economic development role in Scotland, the Executive recognises the need for Scottish businesses to access information and advice on UK reserved matters, such as employment regulation.

 

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