FSB: Accelerating infrastructure investment welcomed as poor state of transport network costs small firms £5,000

The Government should target the road network for its plans to speed up investment in infrastructure as the poor state of the transport network has cost small firms up to £5,000 over the last 12 months, new figures from the Federation of Small Businesses (FSB) show.

The FSB welcomes the Government’s plans to help unlock growth by accelerating investment in infrastructure, but it must be targeted in the right areas, particularly the road network which creates delays and costs for small businesses and acts as a barrier to growth.

In the FSB’s ‘Voice of Small Business’ survey panel of more than 1,700 businesses, half said that the problems with the UK’s infrastructure has cost their business up to £5,000 over the last 12 months. Another 12 per cent said it cost them between £5,000 and £19,999 – this is a huge figure when considering that the average turnover for small firms is around £500,000.

The FSB welcomes the Government’s plans to handpick 40 of the biggest infrastructure projects for investment, but urges it not to neglect existing infrastructure that also requires investment.

The FSB is warning that more needs to be done to address the problem of congestion and the state of repair of UK roads, in order to get businesses moving and growing. At a time when small firms’ cash-flow is already being squeezed, the cost to small firms in lost productivity and damage to their vehicles is one that significantly hampers their growth.

The Government promised to end the war on motorists last year, and so far has allocated £200 million to repair potholes. However, the FSB believes that the Government is missing the point and needs to focus on long-term maintenance that will restore the UK’s road network and improve traffic flow, rather than a quick fix remedy.

In a new report, ‘Small Business and Infrastructure: Transport’, the FSB is calling on the Government to rebalance the funds collected from road users and the amount invested back into improving the road network, to prevent the poor state of roads and high levels of congestion from costing small firms.

Currently, HMRC collects £48.2 billion through taxes such as fuel duty and vehicle excise duty, but only spends £4.8 billion of that on network improvements and £5 billion on road maintenance. The FSB believes this is a huge imbalance. Road users, including small businesses, are seeing little benefits in maintenance and improvement of the road network.

Small businesses rely on roads for the operation of their business: seven in 10 (72%) said their car is crucial to their business. Yet, three in five small businesses said that the state of repair of their local roads impacts negatively on their business.

Small firms typically operate within a 40 mile radius of their premises generally on the road, so it is crucial that there is a good level of service across all roads.

John Walker, National Chairman, Federation of Small Businesses, said:

“Small businesses feel plagued by the poor state of repair of the UK road network. They should not have to pay £5,000 because of failing roads – it is significant waste to their business at a time when they can ill-afford it. It isn’t just the cost that creates a burden on small firms, but there can be lost productivity due to delays in distributing and receiving goods, as well as a delay in staff moving around. It is vital that the Government rebalances the amount spent on the road network with the amount collected so that small firms can get on with the job at hand of growing the economy, without worrying about roads impacting negatively on their business.”

Notes to Editors

The FSB is the UK's leading business organisation with more than 200,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk

The survey is based on 1,739 responses from the February 2011 FSB ‘Voice of Small Business’ Survey Panel of FSB members which took place between 7 and 18 February 2011. For full results, go to www.fsb.org.uk/fsb-survey-panel

To view a copy of the report, ‘Small Business and Infrastructure: Transport’, please go to www.fsb.org.uk/policy/Publications

In the FSB’s ‘Voice of Small Business’ Annual Survey 2010, the average turnover of an FSB member was £524,000.

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Contacts

Andrew Cave, Chief Spokesperson: 07917 628991
Prue Watson: 020 7592 8121 / 07825 125 695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113/ 07595 067068 sara.lee@fsb.org.uk

For regional FSB contacts please go to www.fsb.org.uk/regions