This post was first published by The Croydon Citizen on 09/08/2017.
Is the council doing enough for small businesses?
In a multi part series, Sean Creighton explores the state of SMEs in Croydon and whether they help or hurt the community.
In 2014, the Croydon TUC Working Party drew the attention of the Local Government Association to the issue of greater role for councils in enhancing the digital infrastructure and capabilities of their areas in order to support local economic growth and regeneration. It recommended that the council review the report as part of further developing its role and support for the digital industry in Croydon
While supporting the Croydon Tech City movement, the Working Party argued that the council should only support those digital firms that are prepared to employ staff on proper employment contracts, pay employees trade union rates, insist that contractors pay at least the London living wage, and recognise staff’s right to join trade unions. It suggested that the Tech City movement needed to recognise that developing as a specialist sector does not in itself integrate it into the wider communities of Croydon. New tech businesses can simply see the borough as a base and decide to move away.
Reducing Croydon’s digital divide
It took the view that Croydon Tech City also needs to consider how it can contribute to the reduction of the digital divide in Croydon. help those who cannot afford IT access and develop a platform which helps non-tech businesses, community and voluntary organisations to promote their products, services and activities to each other. It can help to build inter-trading networks that mutually strengthen each other and the money staying in the local economy. There have been many welcome initiatives by Tech City members in this respect such as Just Croydon and Code Club.
The commission wants the council to map broadband provision within the borough as part of helping to ensure there is high quality broadband to support businesses. The commission pays particular attention to the lack of tech skills among local residents of working age. It wants the council to engage with programmes that can increase digital literacy in businesses. The commission notes that while it is clear that businesses feel that the skills gap is creating an obstacle for growth, it seems difficult to define the technical skills needed for them to achieve a more productive workforce. Unless this can be solved, no solution is likely.
SMEs and council procurement
The council’s 2014 Growth Plan set out the council’s aspiration to ensure that more local businesses could become service and supply providers to the council.
Welcoming this aspiration, the TUC Working Party recommended that a purchasing power plan be drawn up listing the types of purchases and their value, where they are currently sourced, whether there are local suppliers who can meet the council’s need, and what action will need to be taken to assist the development of local suppliers including manufacturing products. Help may be needing for existing local businesses to adapt to supplying the products the council needs, along with setting up new businesses that can act as suppliers. There will also be limits to the council’s role as its purchasing power decreases given the further cuts in the coming years.
Its recommendations include the need to clarify and promote the Value Croydon offering for business use and promote contracts under £100,000. Practical improvements are needed, such as creating a single platform to promote contract opportunities for local businesses. There should be workshops on writing successful bids and feedback when tenders are not successful. The council should also be working with large companies within its supply chain to encourage them to procure locally.
Lack of analysis of SMEs
My main concern is that the contextual analysis of the composition and diversity of the SME sector is weak. Unless these are understood, there is a danger that the commission’s analysis will be flawed and irrelevant to most SMEs.
We need to know how many SMEs there have been in Croydon over time, from prior to the 2008 economic crisis. The results should be categorised by business type, by the number of start-ups and closures, and by their average lifespan. How many small businesses struggle, or fail, to survive?
All over the borough there are empty retail units. The council has not analysed how many units have been granted planning permission since 2008 and how many of these are now empty. As rental levels are a major problem for SMEs, analysis is also needed on what the difference in rentals between existing historic retail parades and new retail units on the ground floors of apartment blocks.
Many small businesses are based at the owners’ homes because they cannot afford premises rental. The commission could explore whether specialist properties can be developed that enable home based small businesses that wish to do so such as the upper floors over shops.
Given the scale of new development in the borough at present, particularly in the town centre, t is important to know how many non-retail small business units have been lost due to the General Planning Development Order and planning permissions each year since 2006.