Much of the Growth Driven By Non-Employing Businesses

A Government report published today has revealed a significant increase in the number of private sector businesses in the UK since the start of 2012.

The ‘Business Population Estimates 2013’ report highlights that there are now 4.9m private organisations in the UK – the highest since the Government launched the study in 2000.

The report shows that there were 102,000 more private businesses at the start of 2013 compared to the start of 2012. It also estimates that the UK now had 4.9m private sector enterprises and said that 99.9% were SMEs, employing an estimated 14.4m people – 59.3% of private sector employment.

The latest rise in the number of private sector businesses was driven by a significant increase in smaller firms which do not employ anyone.

According to the research there are also 2.2% more large companies (employing over 250 people) as well as an increase in the number of businesses employing between 50 and 249 people; The number of small businesses -  those employing between 1 and 49 members of staff- had fallen during the period.

The report by the Department for Business, Innovation & Skills was been published on the same day as a CBI study into export finance.

The CBI found that SMEs had little knowledge of schemes offered by the Government to support exporting, including the UK Export Finance initiative (UKEF).

It said that just 52 small and medium-sized companies received direct assistance from UKEF in the past 12 months and called for expansion in support from the campaign to directly assist 250 small firms by 2015.

Expert Opinion

This Government report highlights a number of things including the entrepreneurial spirit that exists in the UK. The Government predicts that there have been over 120,000 small businesses that have started during the start of 2012 and 2013, and although these do not employ people, it shouldn’t be forgotten that they have the potential to do so in the future. <br/> <br/>“The worrying trend is that there has been a fall in the number of businesses which employ between 1 and 49 people. <br/> <br/>“The Government says that it is committed to supporting SMEs, but this report shows that there is a great deal more work to do. There has been a noticeable increase in business confidence since the start of 2012 and it is hoped that this will be reflected in next year’s figures.” <br/> Fergal Dowling - Partner