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Rishi Sunak to offer 'help to grow' training for SME managers

Larry Elliott
<span>Photograph: Simon Dawson/Reuters</span>
Photograph: Simon Dawson/Reuters

The bosses of small businesses are to be invited back to school to brush up on their management skills, under plans to be announced in the budget designed to help close Britain’s productivity gap with rival nations.

As part of the attempt to speed up the UK’s recovery from the Covid-19 pandemic, the chancellor, Rishi Sunak, will unveil a “help to grow” scheme that will offer the leaders of up to 130,000 small and medium-sized enterprises (SMEs) the chance of MBA-style management training.

The £520m plan to spur innovation and growth will also provide SMEs with the chance to get expert technology advice and discounted digital software.

Sunak will say he expects tens of thousands of small businesses to take advantage of the sort of high-class management training that bigger companies can more easily afford.

The chancellor said: “Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity – so it’s vital they can access the tools they need to succeed. Help to Grow will ensure they are embracing the latest technology and management training, fuelling our plan for jobs by boosting productivity in all corners of the UK.”

The Treasury said studies had shown that improving the performance of SMEs to match that of competitor countries such as Germany could add £100bn to the UK economy.

International comparisons show that on one measure of productivity – output per hour worked – the UK has a deficit of 16% compared with the other members of the G7 (the US, Japan, Germany, France, Italy and Canada). Compared with the US and Germany, the gap is more than 20%.

Andy Haldane, the chief economist of the Bank of England, has said the productivity gap between the top and bottom-performing companies is materially larger in the UK than in France, Germany or the US. In the services sector, the gap between the top and bottom-performing 10% of companies is 80% larger in the UK than in its international competitors.

Sunak will say on Wednesday that he wants to focus on innovation, skills and investment as the economy emerges from the lockdown restrictions imposed to lower Covid-19 infection rates.

Related: Rishi Sunak's budget will do nothing to address a decade of economic negligence | Anneliese Dodds

Under the Treasury scheme, leading business schools will offer 50 hours of tuition with one-to-one support from a business mentor.

The UK ranks fifth in the G7 for the use of good management practices, and Sunak believes the 12-week programme will build more profitable, resilient and productive businesses. Evidence from the ONS suggests that even small improvements in management practices can lead to 10% increase in productivity.

In addition to management training, the government will create a new online platform to offer free advice on technology that will help businesses to save time, reduce costs, and reach more customers.

Eligible SMEs will be given vouchers to get up to 50% off the purchase of new productivity-enhancing software, up to £5,000 each. The Treasury says technologies such as customer relationship management (CRM) software can increase sales by around 18% per employee over the course of three years.