Outlook for small businesses in the East in 2022 is 'worrying'
The Federation of Small Businesses East of England says inflation is currently the highest its been for seven years
Last updated 13th Jan 2022
Small businesses in the East of England are facing a challenging 2022, as rising costs and difficulties in staffing come to a head.
Candy Richards is the East of England Development Manager at the Federation of Small Businesses.
She says local companies have already endured a tough start to the new year, owing to the Covid-19 Plan B restrictions: "Unfortunately, because of the new Omicron variant, many of our small businesses saw footfall really decrease during Christmas. That is usually their busiest period, where they make the majority of their revenue that can see them through the following year"
They also had to contend with staff absences after a rise in the number of Covid-19 cases as we began 2022, which made matters worse. The biggest worry for local businesses, however, is the looming threat of rising costs.
"What we're seeing is that inflation is at its highest level in seven years. Many local businesses have been telling me that if nothing done to take some of the pressure off them from this rise in costs, they might have to shut their doors", Ms Richards says.
The upcoming increases to National Minimum Wage and National Insurance Contributions for employers is further complicating the situation. She adds, "We need Government to really consider whether it's wise to go ahead with an increase in National Insurance contributions at this time when we're seeing such an increase in costs.
"Any changes can make a huge difference to small businesses and whether they're actually going to survive this year."
The federation are also urging Government to offer financial support to help offset the impact of rising inflation. Ms Richards says they can make a substantial difference if they came good on one scheme which they launched in March but haven't delivered as of yet.
"Last year, something called the Rates Relief Fund was pulled together by the Government, worth £1.5 billion. This grant was there to target those businesses in supply chains who have been hardest hit by Covid-19 regulations but weren't eligible for business rates relief.
"To date, this fund has not been distributed. We're calling on Government to get this money distributed quickly through local councils to make sure that more small businesses can get the support that they need, at the time they need it the most"
Local firms have also found it difficult to hire and retain qualified personnel.
"Businesses in East Anglia are suffering from not being able to recruit staff with the right skill set.
"We're also hearing that even when some of them end up recruiting staff, they are poached by larger companies who potentially have bigger pockets."
Another concern, especially for businesses engaging in trade with countries in the European Union, is the increased bureaucracy that exists under the new system. Ms Richards explains, "There's lots more red tape and and red tape means additional costs for small businesses reliant on importing and exporting.
"The Government needs to move quickly on this because for many of our small businesses, the complexity around adhering to the regulations, and the additional time and costs, is simply not worth the effort.
"If we want to really protect our local small businesses that import or export products, we need to see the Government put in place support remove some of the red tape and offer targeted training around how actually companies can go about navigating these ever changing, complex rules and legislation"
The role local businesses can play in helping stem carbon emissions took was highlighted during the COP26 climate conference in Glasgow last October. Ms Richards says the majority of business owners in East Anglia want to reduce their carbon footprint but require help from authorities to do so.
"If you running a small business, you don't tend to have deep pockets. The reality is, if you're a small business owner, you have a number of competing costs and pressures and actually becoming more sustainable and environmentally conscious is a priority, but it's one of many."
That's why she says the federation are calling for the Government to implement grants and subsidies like the 'Help to Green' schemes. These offer incentives to business owners to switch to renewable energy or green technologies, without putting the burden of additional costs on them.
"Here in East Anglia, we've got around 567,000 small businesses. If Government gave them the support and funding that they need, then just think about the amazing progress that could be made to meet our carbon reduction targets here in the UK", she adds.