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
Good piece.
However in spite of the stats quoted about customer satisfaction, many, perhaps most, people’s experiences of Business Link were less than satisfactory because too often advisers were little more than a sales force for the latest great economic development wheeze. If there was a workforce development budget to spend then that would be pushed. Need to get mentoring rates up? That would become the panacea of choice. They became increasingly delivery agents of the latest minister’s bright ideas. And, unless you were in the right sector, with the right postcode at the right time with the right aspiration (or a credible pretence to them) you would also get referred to the increasingly puny ‘universal start-up’ offer.
For several years there was a serious attempt at capturing learning from the BL network. The Business Link University aimed to capture and share best practice and pioneered the use of study visits, extranets and other fresh approaches to learning. However when the service was regionalised and managed by the RDAs they decided that they no longer required BLU.
But the fatal flaw for me was that Business Link put itself at the heart of the relationship with the small business. Instead of encouraging them to turn to peers for support and advice it became ‘ring our call centres’, ‘visit our website’ or, if you qualify for anything more than the universal start up offer, perhaps even get to ‘speak to an adviser’.
Interesting to note that the ‘parallel market’ for business support has now been destroyed and Mr Richard has just completed a marathon tour promoting his own School for Start Ups. Only those who can afford to pay can now access ‘expert’ business support.
Good piece Elliot. I agree it is a shame BLOs have gone and also agree that changing them would have gone a long way in delivering SMEs the required support we saw on a day-to-day basis.
I disagree with Mike (above): there was nothing wrong with BLOs putting themselves at the heart of the relationship – indeed the advisors who did this were the most productive and valued of all. By any measure, being valued by your clients can only be a good thing.
I mostly agree with Mike, but would qualify this by observing that Business Link being regionalised ended up with a supply-driven rather than demand-led service that resulted in the call centre/national website approach. National Business Link policymakers were at fault not the local coalface provision that was scrapped.
The other problem with Business Link over the years was the loss of identity of local enterprise agencies, many of whom also went under or struggled when they refused to operate their services under the Business Link banner.
In a way the scrapping of Business Link will slowly bring back some equilibrium in the business support market – by this I mean that supply will slowly but surely meet local and demographic demand. However I also suspect that within 3-5 yrs we will see a return to a nationallly operating business advice service under another name, but hopefully coordinated independently rather than nationally from Whitehall.
A thought-provoking piece Elliot.
With the demise of Business Link the local dimension of advice for small business has gone. The government has abrogated its responsibility for small business to the internet. Business Link was a valuable resource for small business. It is a great shame that politicians / policymakers failed to understand the important role Business Link provided and chose to play politics. I fail to see how scrapping the service entirely will help solve the problems that did exist. Business needs local help from a human being not a corporate website like Government Gateway. Fine if you want to tax your car but who can I talk to now? Nobody, that’s who.
A piece that awakened my thoughts again. Working as a manufacturing director for Navico in Margate from 1990 to 2004 I spent considerable time supporting Business Link and its predecessors by letting them use my facility as a hub to demonstrate best practice, for free. I watched as I saw it change from a proactive facilitator for small business to a call centre directing people to expensive consultants who knew a lot about theory but had nothing to demonstrate active real best practice as I had been doing. I feel there is a role to replace the concept of Business Link and there are a lot of us with extensive manufacturing best practical practice whose expertise is being left to wither. We want to provide mentoring, training and advice to SMEs at an affordable level to help businesses make that step change. I’m currently working at Cambridge University but am more than happy to help anyone with their manufacturing queries. I used to provide such a service through the Kent Technology Transfer Centre by the way.
Found this site when looking to satisfy my curiousity and searching “whatever happened to Business Link” through Google.
I worked as a Business Enterprise Adviser for over ten years from 1994-2005, eight of which were in a self-employed capacity, mainly contracting to Business Link, several Local Enterprise Agencies and other BL contract deliverers in the Capital, and other local business support organisations (mainly funded through limited term regional and local economic development initiatives). During this time I witnessed and experienced both ends of the scale – cases of excellence in the provision of assistance that added real value to clients, contrasted with regular instances of nonsense bureaucracy, top-heavy infrastructures (some of the London BL’s seem to have a “manager” for just about anything and everything), eligibility criteria that excluded large numbers of small businesses from being able to access the help they so desperately needed, turf war skirmishes between the senior figures of the BLs, Training and Enterprise Councils, Local Chambers and Local Enterprise Agencies – all tempered with a degree of local politics and various personal agendas.
I’m afraid there was more than a little truth in the adege that the biggest single group of beneficiaries from the Business Link service were those employed by the Business Links. Having said that, the majority of the PBAs I had dealings with were pretty solid, and really wanted to do what they could for their clients.
With the demise of BL, there remains the question of how small business people obtain the help they need to avoid failure, and remain net contributors to the Nations coffers rather than become dependents upon it. My experience was that the very people who were most in need of the type of help and advice that Business Support Organisations could offer were usually those with the least ability to pay for it. An inability to pay doesn’t mean the demand for such services simply goes away, just that it remains unsatisfied – with all of the direct and indirect costs to society that business failures carry.
I decided on a career change in 2005, when it was clear the LEA I was employed by was simply “buying turnover” in taking on its BL4L contracts. There was a standing joke amongst my peers at the time; “Would you advise one of your clients to take on a Business Link contract?”. Hitting all deliverables on the one I worked on provided a margin of just a couple of per cent, and if one took into account a contribution to overheads consideration the end result would be in the red. I don’t know how the services provided by those organisations I once worked for are now funded? I’m also not sure whatever happened to the aspiration of making the UK the best place in Europe to start in Business? It certainly use to be the easiest, but it does look now as though once off the blocks, entrepreneurs are on their own?