Business News Round Up (17/02/2025)
Scottish small business confidence hits record low as tax hike looms
Scotland’s small businesses are having a confidence crisis, as the Federation of Small Businesses record the lowest confidence levels in the nation since the pandemic. The latest Small Business Index found that confidence fell t0 -67.2 in the last quarter of 2024, the lowest level since the fourth quarter of 2020, when it was just -69. This is the third consecutive quarterly slide for small business confidence in Scotland, which started at -41.2 in the third quarter of 2024. Uncertainty about the economy as a whole is driving this negativity, with the UK figure reflecting the same lack of business confidence at -64.5. About three quarters of Scottish respondents (74%) cited rising costs, largely in utility bills, as well as labour and tax costs as their biggest barrier to growth, while about six in ten (59%) cited their performance in the domestic economy was holding back their growth.
https://www.digit.fyi/scottish-small-business-confidence-hits-record-low-as-tax-hike-looms
Firms plan to cut jobs as employment costs rise
Companies are planning to cut jobs or recruit fewer people ahead of rises to National Insurance payments and wages, according to a new survey. Businesses questioned by the Chartered Institute of Personnel and Development (CIPD) also said they would raise their prices to cover increasing employment costs. Separate research conducted by the Federation of Small Business found in the final three months of 2024 confidence among small firms hit its lowest point for 10 years, not including the Covid pandemic. The Treasury said it was delivering the stability businesses need to invest and grow. Rises to National Insurance Contributions by employers as well as an increase in the National Minimum Wage, announced in October’s Budget, will come into force in April. According to the survey, just over a third of the 2,000 firms it spoke to said they planned to reduce their headcount through redundancies or by recruiting fewer workers.
https://www.bbc.co.uk/news/articles/ckg7gewqevqo
SMEs could win more public sector contracts under new AI-powered procurement pilot in Greater Manchester
SMEs could win more contracts with local councils under an AI-powered procurement scheme being launched this morning. STAR Procurement – an organisation that looks after the procurement needs of four councils in Greater Manchester and another two from Merseyside – has begun a pilot scheme to help smaller firms and voluntary and community sector organisations (VCSOs) to win public sector contracts. It follows a campaign from the Federation of Small Businesses (FSB) to launch a procurement scheme in Greater Manchester to “ensure businesses are at the front of the queue to deliver goods and services needed by their own local authority”. The pilot will include Stockport, Tameside, Trafford and Rochdale councils – who together make up STAR – but the FSB hopes that if successful it will be extended across the city region.
https://www.business-live.co.uk/enterprise/smes-could-win-more-public-31018451
UK Government urged to rethink ‘tax on jobs’ due to impact on Scottish economy
The UK Government has been urged to reconsider its increase to employer National Insurance contributions before it causes “lasting damage” to the economy in Scotland. National Insurance contributions for employers are set to rise to 15% from April – however, the Scottish Government estimates it will cost businesses £850 per employee on average. It was warned the hike would hit the budgets of charities and public sector bodies. Scottish Government Employment and Investment Minister Tom Arthur said the rise was likely to result in higher prices for consumers and endangered economic growth and described it as a “tax on jobs”. Speaking ahead of a debate in parliament this week, Arthur said efforts to support businesses and boost investment were “being undermined” by the UK Government’s decision.
https://www.insider.co.uk/news/uk-government-urged-rethink-tax-34691055