Are more SMEs dependent on government support as UK MGP nears its end?

Since the Manufacturing Growth Programme (MGP), one of the UK's most successful industrial business support programs, was introduced in 2016, over 12,435 manufacturing jobs have emerged.

The government and local authorities will urgently need to provide specialised assistance for manufacturing small and medium-sized firms (SMEs) as this important project is scheduled to terminate in June.

A recent independent evaluation of the MGP program highlights its significant value for the money invested and tangible outcomes. According to the study, more than 95 per cent of organisations surveyed expect growth over the next five years, with 63 per cent emphasising product innovation as a significant area of growth. It is noteworthy that 63 per cent of participants reported a rise in turnover, while 52 per cent cited increased productivity as the main result of the support received.

Launched in October 2016 to address growth-related challenges faced by SME manufacturers, MGP has provided grant funds for business improvement initiatives and capital projects, along with specialised mentorship from industry experts. The program has benefited 4,564 enterprises across the East and West Midlands, Yorkshire & Humber and the South East, granting over £13.9 million and facilitating more than £25.7 million in private sector investments. Additionally, it has generated £42,073 in Gross Value Added (GVA) per employee among sponsored companies, underscoring its significant impact.

Jane Galsworthy, Managing Director of Oxford Innovation Advice, the leading provider of business support programs for SMEs, stresses the critical role of specialised support programs like MGP in assisting companies in overcoming challenges and barriers to growth. However, she expresses concerns that the new UK Shared Prosperity Fund, with its localised funding distribution for business support, may lead to generic and less impactful support services, jeopardising the progress achieved thus far.

Galsworthy emphasises the importance of SME manufacturers in the UK economy, accounting for nearly half of all UK exports and contributing close to 10 per cent of the nation's Gross Value Added (GVA). The termination of MGP funding creates a significant gap in the availability of specialised and high-quality support for SME producers. In fact, a survey conducted by Oxford Innovation Advice revealed that 91 per cent of manufacturers don't know where to seek business support once the program concludes.

She calls for discussions with governmental organisations and local authorities to explore ways to allocate funds and sustain the provision of specialised support to manufacturers. MGP, which offers individualised assistance across 183 local authority areas, stands as the largest and most successful business support program in the UK for SME manufacturers, effectively addressing market shortcomings.

The evaluation report also highlights how Oxford Innovation Advice adapted the program during challenging periods, including the COVID-19 pandemic and Brexit, to continue providing top-notch business advice and support to manufacturing SMEs. The program is still important now, just as it was in 2016, due to persistent economic pressures like inflation, rising energy prices, supply chain disruptions and decreasing consumer spending.

As Jane stated that businesses today, more than ever, need access to specialised knowledge and high-quality business support services in order to realise their full growth potential. The economy will expand as a result, more job opportunities will become accessible and our neighbourhood will gain from this.

Manufacturing is essential for the future of the UK economy, particularly in the creation of high-skill and high-value jobs in emerging technologies, digitalisation and the pursuit of net-zero goals, according to Verity Davidge, Director of Policy at Make UK. SMEs form a significant portion of the workforce in this sector, underscoring the urgent need to sustain support programs that enable their growth and success.

Hearing from the clients of the Manufacturing Growth program, Emma Bulmer, Director of Natural Paint UK Ltd, West Midlands lauded the program for its support, reiterating the fact that small businesses need it to grow.

Advising the local authorities, another client, Laura Rudoe, Founder, Good Ventures Ltd. Hertfordshire, said: "Please, please, please, make sure you don't reinvent the wheel – just support the Manufacturing Growth Programme and back an initiative that is already working."