A leading business organisation is calling for more support for firms amid signs that economic recovery is stalling.
The Federation of Small Businesses (FSB) has published its quarterly Small Business Index a week after welcoming the Chancellor’s enhancement of existing schemes last week.
Now the group is now calling for fresh interventions to help those that have received no income support to date, reduce the costs of hiring and further alleviate the business rates burden.
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The FSB's quarterly Small Business Index, which surveyed 1,500 small firms, showed that two out of three expect things to get worse, ahead of an "incredibly difficult" trading period in the run-up to Christmas and the end of the Brexit transition period.
Help is needed for firms that have received no income support to date, to reduce the costs of hiring, tackle the business rates "burden" and provide more resources for those looking to start up a company, the organisation said.
A record one in four small firms say they have reduced headcounts last quarter and an even higher proportion, 29%, expect to make redundancies over the coming three months. One in ten expect to let at least a quarter of their staff go.
Meanwhile more than half (53%) of exporters surveyed said international sales are falling and 43% expect a drop in exports over the coming three months.
FSB chairman Mike Cherry said: "Short memories are common in a crisis but we must not forget that small firms were already under the cosh thanks to political uncertainty, rising costs and creaking infrastructure well before the Spring.
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"The Chancellor made some very welcome adjustments to support measures last week, and it’s critical that the new Job Support Scheme is straightforward to use, the self-employed can access the help they require, and local authority cash grants reach as many of those in need as possible, as swiftly as possible.
“However, too many are still without the help they need to weather current disruption – not least company directors, the newly self-employed, those without premises and those further down supply chains in the retail, leisure and hospitality sectors.
"An ambitious rescue package for these groups is urgently needed. Local authorities should use the new discretionary funds being allocated this week to assist them wherever possible.
“With the unemployment rate rising, we’ll need to encourage more of those who are out of work to strike out on their own over the months ahead.
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"A Kickstart Start-Up programme, inspired by the Kickstart employment initiative and building on the success of the Start-Up Loans and the New Enterprise Allowance programmes, could mark a way forward.
“Equally if we want small business owners to create jobs, we have to bring down the costs of employment, starting with Employer National Insurance Contributions. If we want them to invest, innovate and expand, we have to alleviate the strain of wider government-imposed overheads, including those stemming from an outdated business rates system which continues to stifle too many community businesses all over the country."
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A Government spokesperson said: "Small businesses are the backbone of the 海角视频 economy and our support for them has been unwavering during the pandemic.
"Around 93% of eligible small businesses nationally have now received Government grants totalling over £11 billion, as part of a wider package of support for businesses worth £200 billion.
"We've put in place a comprehensive plan to protect, support and create jobs in every region and nation of the 海角视频, and recently expanded our winter support schemes, including our expanded Job Support Scheme which will protect jobs in businesses that are open or closed.
"We've also increased grants for firms required to close and are providing additional funding for local authorities and devolved administrations to support local businesses."