Business leaders call for SME hub outside of London

Nine out of ten SME directors would support the creation of an SME hub outside of London.

The creation of a small and medium enterprise (SME) hub would be “beneficial to the UK economy”, according to a new AXA report, and nine out of ten (89 per cent) SME directors would support it. Furthermore, 93 per cent see a demand for a non-London-based hub to “create an environment for growth for small businesses”.

AXA’s report, Driving local business growth: Creating an ‘SME hub’, showed that the majority (71 per cent) of small business leaders believe that the concentration of businesses in London represents a “risk to the economy”. They believe that the creation of a new SME hub outside of London could help promote a “more balanced lending environment”.

"It's clear from what these SME leaders have told us, across the country, that there is widespread fear the economy is not only unbalanced in favour of London but that businesses operating outside the capital are at a competitive disadvantage,” said Amanda Blanc, chief executive officer of AXA’s commercial business.

Nearly two-thirds (60 per cent) of SME businesses feel that being able to borrow from banks at competitive rates can be affected by their geographical location, and 25 per cent of the survey’s respondents believe it has a “significant” impact.

SME hubs often help firms connect with banks, lenders and private investors, while offering subsidised business rates and free advice. In fact, nearly all (89 per cent) of the directors surveyed rated subsidised rates as a “valuable” service provided by hubs.

The lack of SME hubs outside of the capital puts other businesses at a disadvantage, as they fail to receive all the benefits that London-based firms enjoy. The report notes that Birmingham and Manchester were ranked as the top two locations of choice for the creation of a non-London-based hub, due to their relatively central locations, good transport links, and already existing strong business centres.

But, while the vast majority of SME directors and businesses are calling for the creation of such a hub, over a third of them (35 per cent) believe there is a lack of political will on the issue.

“If the government is serious about supporting SMEs, and it truly believes that SMEs are the lifeblood of our economy, then I encourage it to show its support in real terms," said Ms Blanc.