The next Scottish Government must ensure a “renewed focus on everyday businesses which underpin Scotland’s economy” - amid mounting pressure on small and micro firms – and keep “one of the most effective economic interventions since devolution”.
That is the message from the Federation of Small Businesses in its Scottish Parliament election manifesto.
The FSB is calling for action on non-domestic property rates.
And it wants “procurement reforms to remove barriers to small firms bidding for a share of the £16bn-plus in public contracts awarded in Scotland each year”.
It observes that small businesses, including micro enterprises, account for more than 98% of Scotland’s private sector companies, employ in excess of 940,000 people and generate £98 billion in annual turnover, while declaring that “many continue to face rising costs and a growing tax and regulatory burden”.
The FSB is calling for “a fresh focus on the day-to-day needs of the country’s 350,000-plus small enterprises from whoever forms the next Scottish Government” after May’s election.
It is urging the next Scottish Government to maintain the “lifeline” small business bonus scheme.
Cabinet Secretary for Finance and Local Government Shona Robison announced in the Scottish Budget on January 13 that the small business bonus scheme - which she observed “removes the burden of rates from 100,000 properties; businesses like hairdressers, bakers, cafes that form the life blood of every community” - would be continued for the next three years.
The FSB believes the thresholds for the small business bonus scheme (SBBS) need to be “urgently revisited” following the recent non-domestic rates revaluation process.
It says: “The SBBS is widely regarded by small firms as one of the most effective economic interventions since devolution. Many business owners describe the scheme as a ‘lifeline’, enabling them to retain premises, invest locally and employ staff.
“Following the most recent non-domestic rates revaluation, some small businesses have received notice of increases in their rateable values of up to 400%.”
And it warns that “unless eligibility thresholds for the SBBS are urgently revisited, the scheme risks failing to protect the very firms it was designed to support - particularly in comparison with other parts of the UK.”
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The FSB is also calling for “mandatory full business and regulatory impact assessments (BRIAs) to tackle the growing regulatory burden”.
And it is asking for “reform of the administration of the non-domestic rates system itself”, declaring: “Scotland currently operates with 14 separate assessors and valuation rolls, creating inconsistency, complexity and a lack of transparency.”
Guy Hinks, who chairs the FSB in Scotland, said: “As parties set out their platforms for the next Scottish Parliament, FSB Scotland is calling for a renewed focus on the everyday businesses that underpin Scotland’s economy, and for reforms that ensure small firms can continue to invest, employ and serve their communities.”
The FSB points to its recent survey finding that 14% of small businesses now spend more than a full working day each week on regulatory paperwork, declaring this adds to costs and limits time for growth and investment.
It is also calling for a review of business improvement districts (BIDs), noting that current legislation is now 20 years old and highlighting its view that this “does not always deliver clear value or adequate representation for smaller firms”.
Mr Hinks said: “Small businesses are not asking for special treatment - they are asking for a system that recognises their collective scale and contribution as well as the reality of trading on Scotland’s high streets. Business rates reform, for example, is now unavoidable if we want to protect jobs, town centres and local economies.
“Small businesses’ owners are the people who make Scotland work, creating local jobs and driving economic growth. Yet, such are the pressures on them, a third expect their business to shrink or close in the next 12 months. That is something that should worry us all.”
He added: “What we are calling for is a renewed focus on what these everyday businesses need to thrive, and for reforms to ensure they can continue to invest, employ and serve their communities.
“We are not talking about faceless company directors or absentee owners. Small business owners are among the hardest-working people in the country. They are people we would all recognise - the mechanic who fixes your car, the childminder who looks after your children, the florist and shoe repairer on your local high street.”
The FSB observes: “More than two-fifths of small firms operate in or near a town centre, yet over half report a negative view of the area they trade in, citing empty units, rising rents, non-domestic rates, poor infrastructure and local governance issues.”
The business organisation is meanwhile calling for financial incentives to help small businesses take on apprentices.
The FSB highlights the “wider role small businesses play in supporting Scotland’s long‑term economic ambitions”, declaring: “While many firms want to do more to address skills shortages, financial barriers mean three-quarters have never employed an apprentice. The organisation is calling for targeted financial incentives to help small employers take on apprentices.”
It also observes that, “while many small businesses are already taking steps to reduce emissions, awareness and engagement with government‑funded net-zero support remains low”, adding that future policy must “focus more clearly on practical support and economic opportunity for small firms”.
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