Small businesses 'indirectly' affected by public spending cuts

10/08/2010

Small businesses could find themselves indirectly affected by public spending cuts, according to experts.

Speaking at the T-Mobile Small Business Roundtable Debate Tim Campbell, former Apprentice winner and Bright Ideas founder and Andrew Cave, head of policy at the Federation of Small Businesses, said that the coalition's move to cut public spending could obliquely impact small business.

In particular, the move by education secretary Michael Grove to cut £55 billion of school building initiatives could affect small businesses contracted by local councils to carry out the work.

Mr Cave claimed cuts at local government level would impact small business finance.

"At the national level it's not going to have an impact – it is local government, the removal of funding for programmes at that level that is going to affect us."

He also highlighted the concerns faced by small business in Kent where the FSB had been instrumental in promoting the use of small local companies for the school building projects.

"Now we have members coming to us saying we were relying on this because the private sector was not generating enough business for us," he explained.