Pre-Budget Report Comment
Commenting on the pre-Budget Edward Rimmer, Bibby Financial Services chief executive, UK & Ireland, said:
“By not penalising businesses and extending the ‘Time to Pay’ scheme in what is possibly the most important pre-Budget for the Chancellor, Darling has offered UK firms a lifeline out of the recession.
"But, as a V-shaped recession continues to look unlikely, it is imperative for the Government to take further measures in the 2010 Budget to ensure businesses are given the best chance of recovery. Darling needs to remedy the failure of the Credit Insurance scheme, which saw less than 0.5 per cent of the fund being utilised in 2009; continue deferrals on the payment of corporation tax, and amend caps on claim levels within the continued EFG in order for more businesses to benefit from the fund and lenders to proactively offer these facilities. The proposed Capital Growth Fund should go some way to helping SMEs access funding in the short term, but the Government needs to put its weight behind it to make it a success.
"The issue of cash flow and survival are intrinsically linked, and measures including business rates relief and invoice settlement schemes to enable quicker payment to SMEs from larger firms could make all the difference. While Bibby Financial Services has actually seen a reduction in debtor days during 2009, late payment from larger companies continues to be an issue and one the Government needs to tackle head-on. The amount of Government red tape, however, is still a large burden for SMEs and can hinder their ability to grow their businesses. If this burden is reduced, this will again make the path to recovery more accessible at a time when firms are faced with reinstated VAT rates and a difficult period predicted in the first quarter of 2010."