SUMMER 2023 A recent report urges more to be done to tackle the specific challenges faced by rural small businesses Small businesses and the self-employed in rural and coastal communities across the UK provide local employment opportunities, drive innovation, and generate economic growth. From established family-owned businesses to start-ups, the rural economy is diverse and complex. Even so, productivity in rural and coastal areas is in decline, and small businesses continue to face specific and often disproportionate challenges compared with their urban counterparts. The Growth Belt, a new report from the Federation of Small Businesses (FSB), highlights some of these challenges including poor digital connectivity and inadequate transport infrastructure and sets out what the FSB wants government to do to help firms survive and thrive. The report recommends that local authorities appoint Local Business Champions, with clear responsibility and accountability for business engagement and applying for available funding. Tell us once data systems should also be used, it says, to reduce the administrative burden on businesses. To boost the economic prospects of small business, the FSB is calling on the government to raise the VAT taxable turnover threshold from 85k to 100k, and link future threshold increases to the retail price index. It also wants the Small Business Rate Relief threshold raised from 12,000 to 25,000. When it comes to digital connectivity, the Universal Service Obligation minimum requirements for upload and download speeds should be updated, adds the report, and the government should ensure the Shared Rural Network does not fall behind its 2025 target of 95% 4G coverage across the UK. The rural economy is a diverse and complex ecosystem. Even so, productivity in rural and coastal areas is in decline With 40% of rural small businesses saying they are extremely concerned about rising energy costs (compared with 36% of urban-based firms), the report calls for the needs of businesses using alternative fuels to be mainstreamed in future energy policy development. It also wants the government to issue 5,000 grants or vouchers for businesses to spend on environmental products and services under a Help To Green initiative. Transport is another major issue for rural businesses, and the FSB wants local authorities to work together on rural transport schemes to ensure projects cover a wider catchment area. It also recommends that the government extend the Get Around for 2 bus scheme until the end of 2023, commit to a long-term fuel-duty freeze, and put in place strategies for delivering the necessary charging and rapid-charging infrastructure for electric vehicles by 2030. The FSB believes rural areas hold enormous potential for businesses to thrive and contribute to their local communities and the larger economy. To do this, however, they need sustained support to weather the challenges and investment in essential infrastructure. Rural firms: key findings from the FSB research (2022) Economic growth n 30% said finding skilled staff was the greatest barrier to growth n 37% reported a more than 10% increase in the cost of running their business n 41% reported their business prospects had worsened n 25% highlighted fuel costs as a barrier to growth Broadband n 32% reported issues with the reliability of their broadband (vs 17% urban businesses) n 14% said unreliable broadband had affected their ability to contact customers (vs 6%) n 11% said it had reduced their competitiveness (vs 5%) n 10% had lost business because of it (vs 5%) n Only 58% said their broadband speed was sufficient for current and future business needs Credit: Karen Woolley, FSB development manager Image: Shutterstock / ivector Energy n 17% depend on alternative fuels, such as heating oil or liquefied petroleum gas (vs 2% urban businesses) n 18% have seen their energy costs triple or worsen in the space of a year Anonymous Hotline For further information, please contact your local Trading Standards Service For up-to-date news stories and information, follow us on 0300 303 2636 Is your sector being undermined by unscrupulous traders operating outside the law? Report them via Trading Standards Anonymous Hotline or online and help level the playing field for honest businesses.