Learning from the story of Business Link

What went wrong with Business Link? Elliot Forte looks back on its rise and fall and examines whether latest attempts by government to support businesses are any more likely to succeed

Business minister Mark Prisk launches the StartUp 2012 Enterprise Calendar in January. The interactive online calendar of enterprise events is designed to be ‘a vital tool for entrepreneurs, signposting them to key events and growth opportunities’.

On 25 November 2011, the coalition government closed the Business Link Advisory Service. This event hardly registered a blip on the radar of the national, or even local, press. The closure was not unexpected. After all, the service had been under fairly sustained public attack by politicians, press and partners since the publication of the Conservative sponsored Richard Report in 2008 (the blueprint for the current laissez-faire policy and the new business support landscape).

I had just committed six months of life to researching and writing a history of Business Link and analysis of small business policy. I had also spent a fairly uncomfortable session interviewing Lord Heseltine, the founder of Business Link himself. So, to be honest, the fact no one else seemed to care took me by surprise. But then, the chancellor George Osborne himself had already issued his edict that ‘those who oppose these reforms are the forces of stagnation, that would commit our country to decline’ (not exactly inviting a balanced open debate).

I spent over 15 years working as an adviser at Business Link and would be the first to acknowledge the service was far from perfect. I would also be quick to recognise that Tony Blair’s obsession for measurement and league tables had created doubt regarding the official performance figures. But even if you believed the numbers had been cooked up (and I have never seen or found any factual evidence to suggest they were), the sheer scale of contact was difficult to dispute.

Business Link served millions of small businesses for a generation. It was the largest single engagement of the small business market in history. Even in the final year of operation, in the face of negative press and scaled back activity, the data suggested over 500,000 customers had asked for help. That figure is more than the combined membership of the Chambers of Commerce, the Federation of Small Businesses and the Confederation of British Industry.

I was certain there had been valuable lessons learned about how small businesses think and act, learnt in the field, working directly with entrepreneurs on projects to grow their businesses. This knowledge had been gained through observation and action learning.

Contrast this insight with the usual short survey churn that is the foundation of most commissioned research. Yet, no serious attempt has been made to capture this experience, as two thousand advisers were scattered to the wind.

Business Link never had the full support of the business consultancy sector or the partners. It was hard to have a partnership of equals, when the Business Link was effectively imposed as the leading brand and given the majority of funding to back it up. In 1998, MP Mark Hoyle summed up this rivalry perfectly when he declared: ‘What has happened is instead of working together the Business Link has been like an octopus, tentacles have been spreading everywhere to try and take over everybody else’s role.’

No surprise, as that had been a key driver for the creation of Business Link in the first place, to simplify how small businesses find support in a complex fragmented supply chain. A decade later, the position had worsened, not improved. The Richard Report was typically blunt, when Doug Richard’s task force declared the government of the day was surreptitiously the ‘sponsor’ of a tax-funded ‘parallel market’. Ironically, the other main rationale for the creation of Business Link had been to increase the take up of consultancy (knowledge) by small businesses, stimulating the consultancy market, not replacing it. I am certain this happened, if only because of the sheer scale of contact in the target market. A million ripples will cause a big wave.

The Business Link Advisory Service survived four changes of government, but not without significant political interference. At the beginning, the adviser brief was simply to engage entrepreneurs and help a ‘friend in the need’. Some 20 years later, the government had moved progressively away from ‘heavy handed’ intervention towards a light touch penetration driven service (‘we are trying to see more businesses than ever before’).

What did this policy shift mean in real terms for small businesses? In the final years, advisers were instructed to work with three times the number of businesses and were dealing with an equal increase in administration burden. In 2010, an internal survey of a Business Link adviser team found that client related work now constituted just 29.4% of adviser time. Monitoring and reporting performance is a vital ingredient for any organisation, but when two thirds of your most expensive resource is spent not helping the end customer, it might be time to stop counting and start asking some difficult questions.

And for what…

Appeasing the consultancy market? Satisfying the lobbyists? Increasing the value for money for small businesses by halving the time available to speak to each one (that should work!)? The policy drive for a national programme of entrepreneurial stimulus was inherently flawed from the start. Micro measurement is not a comfortable bedfellow for creativity and innovation, let alone inspiration. The cost to small business was a diluted advisory service, by design.

Yet in the final years, even with all the increasing demands and restrictions placed on the Business Link network, a fifth of the entire business population were still asking for help year on year. As Heseltine recalled in 2011: ‘The scale of the enquiries reveals the demand was there (in 1994). We can argue about whether the quality of the service was good enough. But my view would have been that argument could only lead to a debate about how you could improve it, not closing it down.’

That demand is clearly still there 20 years on.

I have some issues, as I am sure you can tell. For example, I disagree strongly with Vince Cable’s statement that Business Link was ‘widely criticised by the businesses for which it was designed’. Based on what? I am guessing it wasn’t his colleague Mark Prisk’s confirmation that half a million businesses used the service and gave the organisation a 90% satisfaction rating. I also believe that Lord Alan Sugar’s statement that there was ‘no real business advice dished out other than simple stuff you could pick up and learn for yourself by going on the internet’ is remarkably ill informed. In truth, Business Link was always an easy target. But none of that really matters. What matters to small businesses is the here and now.

We have a new small business support landscape, devoid of subsidised face-to-face help for the vast majority of small businesses. The 2012 Business Coaching for Growth initiative appears to promise much, but it must be noted that when applying, the support seems to be restricted to gazelles, small businesses exceeding £1m turnover. Excluding the vast majority. Those same people that typically have least money to invest in help and remain most cautious about engaging consultants. The acorns that, a generation later, are still the best chance to save the economy.

In June 2011, Lord Heseltine himself bristled when I asked him in interview about these issues. ‘My party would not take kindly to the arguments that you should have these in depth support systems. I’m deeply aware that there is a very substantial body of opinion, which would reflect itself in many of the representative organisations and in many of the newspapers, which would be, very suspicious of anything that smacked of interventionism.’

Six months on, there is clearly no going back. This, despite the sigh-inducing announcement in a recent BIS report calling for the return of a ‘one stop shop’. My own view is that the Business Link network needed to change, not close. If only because it would be a challenge logistically, difficult economically and impossible politically to ever return to the ‘friend in need’ paradigm. Never mind the lost opportunity to capture any learning from this unique mass engagement of small businesses, recouping at least some value from the not insignificant investment of £1bn in tax funding.

The new small business policy willingly accepts that hundreds of thousands of small businesses are being left to survive, thrive or die – a new industrial policy of natural selection, for a meaner and leaner time. It remains to be seen whether handing the baton back to private sector consultancy and relying on a website can deliver the hoped for improvements in quality of support for small businesses.

This new approach could well win the economic battle. I hope it will. Just don’t mention any collateral damage. You might ‘commit our country to decline’.

• The Battle for Better Business, is available in paperback or Kindle on Amazon, or at www.battleforbetterbusiness.co.uk