The FSB recently welcomed the news that unemployed dropped by 88,000 and that a similar number of people entered the workplace.

The vice-chairman of the Federation’s Peterborough branch, Amir Butt, said the increase in employment was good news but it is now important to continue the trend and encourage entrepreneurs to set up businesses and offer small firms incentives to increase their workforce.

Small businesses want to hire more staff and they would be willing to do so if only the government would reduce payroll costs. The coalition must put an extension of the National Insurance contributions holiday at the heart of its growth plans in order to continue reducing unemployment.

Chris Grayling, the employment minister, says more work still needs to be done. The latest figures are encouraging and its good news that employment is increasing. Compared to this time last year, there are now an additional half a million people working in the private sector, he pointed out.

He went on to say that unemployment among young people is now lower than when the coalition took up office.

The ONS data shows that public sector employment decreased by 24,000 in quarter one 2011. Local government departments shed 27,000 jobs whilst central government actually increased its workforce by 4,000. However, when you remove the temporary staff who worked on the 2011 census from the equation, public sector employment fell by 39,000 to 6.14 million.

According to the ONS report, regular salaries, excluding bonuses, have risen by 2% in the past 12 months, whilst total pay, including bonuses, rose by 1.8%.

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The small business sector is crucial to EU growth, according to Helena Walsh, the Brussels regional director for Cicero Consulting.

Ms Walsh said EU member states are looking to small businesses to help their respective economies grow out of the recession. She went on to stress that it is important to have venture capital available for small businesses but at the moment finance support indicators for this form of funding are very poor.

Small businesses continue to struggle as the banks have tightened up their lending criteria and fewer grants up for grabs. Walsh has now urged the respective EU governments to pass urgent reforms to increase small business lending. She did however warn business owners that they were unlikely to see any reforms in the near future.

Earlier this year, the UK government and the major banks agreed SME lending targets through Project Merlin, but the first quarter targets were not met.

Cicero Brussels recently launched a Green Paper entitled ‘Access to venture capital for SMEs’. The paper deals with issues such as allowing venture capital funds to operate across EU borders and reducing the burden of administration on fund managers.

In the UK it’s not only lack of finance that is holding SMEs back. A recent survey from the FSB found that a lot of small business owners say excessive red tape is their biggest obstacle to growth.

Everybody agrees that small business growth is vital to the economic recovery, so when will governments throughout the EU takes steps to ensure that they get the necessary finance to enable them to do so?

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Freelancers, contractors and small business owners may want to make preparations so that they are not affected by public sector strikes.

On the 30th June, various unions with public sector members are planning strike action to protest against government cutbacks, salary freezes and pension reforms. One of the largest unions involved in this action is the Public and Commercial Services Union, which has a membership of 250,000 civil servants.

The unions hope that the government and the TUC can reach agreement before the end of June; otherwise three quarters of a million public servants will be involved in industrial action. A strike on such a grand scale could have a disastrous effect on businesses. Previous strike action by HMRC staff has not amounted to much more than extended lunch breaks. This new action however is expected to be lengthier and therefore more disruptive.

It’s not only HMRC that will be affected. Teachers could walk out leading to school closures, and transport and services will also be affected.

Andrew Cave from the FSB has warned that strike action could be counter-productive if staff cannot get transport to work and firms are unable to make deliveries.

David Frost believes industrial action will have an impact on confidence and could deter much needed inward investment.

The business secretary, Vince Cable, has pleaded with the unions not to organise mass strike action over the coming months but the TUC dismisses concerns that the strike will impact businesses. According to the TUC, the biggest effect will be people not getting to work on time.

Nevertheless, work-at-home contractors will no doubt be glad that it will not affect their ability to work!

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A new survey from the FSB confirms that small businesses would be more willing to take on staff if the coalition reduced employers National Insurance Contributions.

The survey, entitled ‘Voice of Small Business’ received more than 1,700 responses. 31% of respondents said they would be encouraged to hire more employees if they could pay less in NICs for the first six months of employment. 11% also said an incentive would be the extension of the NICs holiday scheme.

The NICs holiday scheme was set up last year to encourage new start-ups to hire up to 10 employees. However, the FSB would like to see the scheme extended to existing micro-businesses with four employees or less, to encourage them to hire up to three more.

Furthermore, the FSB wants the government to do more to help small firms take on apprentices and interns. 29% of the survey’s respondents said they would be encouraged to take them on if more support was available.

Although a lot of companies want to increase the size of their workforce, many of them are not keeping accurate National Insurance data and their employees’ pensions could suffer as a result. A KPMG survey has shown that fund liabilities can be increased by up to 5% by poor record keeping.

22% of the firms surveyed had missing NI entries and 12% were missing the complete history. 17% had data that was inconsistent with expected retirement ages and 6% had missed contributions. 5% of cases had no salary information and 6% showed participants had left a scheme before the date they joined it.

Roger Higgins, a pensions partner at KPMG, said a lot of pension schemes still have a long way to go before they meet the quality targets set by the Pensions Regulator.

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Umbrella contractors will be interested to learn that Maria Miller, the Parliamentary Under Secretary of State for Work and Pensions, has said that flexible working should be thought of as a normal way of working.

The MP for Basingstoke said that businesses have dismissed flexible working as burdensome for too long. UK firms needs to move away from this mentality and consider flexible working as the norm rather than the exception. We live in a world where fathers want to play a bigger role in family life, people work past the normal retirement age and an increasing number of disabled people want to have a job. Most people will consider flexible working at some stage during their working life.

Fathers in both the private and public sector are definitely benefiting from flexible working, according to research findings released by Working Families.

The study discovered that fathers who have adopted a flexible working regime feel less stressed and have a greater sense of wellbeing than their counterparts who have a strict full-time working hours regime.

Michelle Chance from the law firm Kingsley Napley, says that gender issues in the workplace should equalise as more fathers opt for flexible working. However, she has real concerns that the coalition’s recent plan to extend the right to ask for flexible working to all employees in a business will have an adverse affect on working parents’ rights. Employers will face an administrative nightmare if they are to balance the competing rights of employees and avoid costly litigation.

Last month, the government launched a consultation into the introduction of flexible parental leave and extending the right to request flexible working.

John Walker, the national chairman of the FSB, welcomes the decision to reform parental leave but points out small businesses find it extremely complicated to administer flexible working and the rules need to be adapted to suit the needs of each individual firm.

It will also be burdensome for very small firms if they have to allow couples to take chunks of leave rather than the current single block. The FSB would like to see a situation whereby staff tell their employers about their leave intentions from the outset so businesses have ample time to prepare.

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The current transitional jobs market could prove to be a godsend for umbrella company contractors.

There is still a great degree of uncertainty as far as the economic recovery goes, as the results of two new surveys shows.

The regular “Voice of Small Business” survey from the FSB shows that owners of small businesses are starting to feel more confident but despite this, most of them have no immediate plans to take on additional staff.

The latest “JobsOutlook” from the REC shows that only 23% of employers intend to increase their workforce in the coming quarter. On the plus side for contractors, 93% of employers say they maintain or increase the amount of temporary workers they use in the short term. 81% also said this would be their long term strategy.

However, that may be set to change in October when the Agency Workers Regulations are implemented.
Last week the REC held an AWR summit in London and delegates were warned that the regulations could lead to large scale reductions in the usage of temporary agency staff.

Nigel Toon, the HR director at Allied Milling, told the summit that he is responsible for anywhere between 200 and 700 temporary workers at once. If he maintained his current temporary workforce once the regulations are implemented, it would cost the company an additional £36,000 every week. He said Allied would be significantly reducing the number of agency workers it uses rather than face an extra £2m annual cost.

Kevin Green was quick to reassure delegates that 70% of agency use was with SMEs and therefore the cost implications were not the same as they were for large corporate like Allied Milling.

A straw poll was taken during the summit and 58% of attendees said they were already making plans for implementation of AWR. 34% said that had some awareness of the requirements whilst just 6% said they were totally prepared.

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Umbrella company contractors will no doubt be relieved to learn that confidence is improving amongst small business owners.

However, the latest Voice of Small Business index from the FSB shows that, although confidence is up, SMEs are failing to take on new staff.

Youth unemployment is at record highs thanks in part to the public sector spending cuts, the UK is relying on the private sector to create employment opportunities. The FSB index discovered that a small proportion of SMEs plan to decrease their workforce in the coming three months.

The FSB wants the coalition to take more measures to help small firms. It would like to see the NICs holiday extended to micro-businesses. Such a move would help the smallest firms take on more staff, especially in areas where the reliance on public sector employment is high.

The latest JobsOutlook from the REC shows that only 23% of employers intend to increase their permanent workforce over the next quarter. A further 64% intend to maintain permanent staffing levels at their current level.

At the same time, 93% intend to either increase or maintain their current usage of temporary workers in the short term and 81% say this is also a long term plan.

Roger Tweedy, the REC’s director of research, said these figures show that the UK has a transitional jobs market at the moment. Confidence about hiring is the same as it was last month and businesses are still relying on temps and contractors.

Looking further ahead, trade and investment in the private sector should start to accelerate in the second half of 2011 but until then there will be signs of volatility in the jobs market.

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Eric Pickles, the Communities and Local Government Secretary announced last week that the British Chambers of Commerce will have sole responsibility for uniting the network of local enterprise partnerships.

The network will provide a forum for local business leaders to exchange ideas, solve problems and access the latest data required to promote the UK’s economic growth.

The coalition wants to see local areas taking control of their economic future. LEPs are owned locally through partnerships between civic and business leaders and these leaders will decide local economic priorities and encourage growth and job creation in the local community.

David Frost, the BCC’s director general, said the Chamber was delighted to be at the centre of the new network and would work tirelessly to make sure it helps enterprises across England grow.

However, various business organisations are disappointed that the BCC has been given sole responsibility for the group. They believe that this move means that wider business concerns will be ignored. Furthermore, they are concerned that this decision was taken without the opportunity being put out to consultation or tender.

The national chairman of the FSB, John Walker, said he supports the move to bring LEPs together but pointed out that there are several business organisations, representing different sectors, which are all striving to make LEPs successful. If the scheme is to be truly effective, these organisations should be entitled to represent diverse business interests.

Miles Templeman, the Director-General of the Institute of Directors, was of a like mind saying he was both surprised and disappointed that the government had appointed the BCC without consulting other business groups.

FPB chief executive, Phil Orford, explained that many of the members of his organisation still don’t understand the concept of LEPs and how they will support local growth. He also expressed his disappointment with the government for its lack of transparency and consultation in reaching its decision.

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More than half of UK businesses, including umbrella companies, are concerned that changes to employment law will damage their business, according to a new survey conducted by the British Chambers of Commerce.

Changes to the regulations governing paternity leave are of concern to 52% of companies and 34% believe this will be extremely detrimental to the running of their business. 21% also think the government’s decision to scrap the Default Retirement Age will harm their business.

As from the 3rd of April, fathers are entitled to take the unused portion of a mother’s maternity leave if she decides to return to work early. This new ruling is applicable to fathers of children born on or after April 3rd. The government has also started to phase out the Default Retirement Age.

The Director General of the BCC, David Frost, said the government had promised to listen to the concerns of business and reduce bureaucracy but these new pieces of employment legislation will hit companies hard. Employers now have to cope with more changes in employment law instead of getting on with running their company.

The FSB is also concerned that micro firms are going to be hit badly by EU regulations. Although the government has put a 3 year moratorium in place on new domestic regulations for micro firms, they will still have to comply with the laws drawn up in Brussels such as the AWR.

Leading recruiter Hays, says the coalition needs to provide more clarity on the implementation of employment law changes and take more steps to consult with UK firms on future legislation.

The government plans to let all employees request the right to flexible working but Geoff Fawcett from Hays says small businesses will suffer most from this because they do not have the same HR resources as larger companies.

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The FSB claims the Chancellor missed a golden opportunity to boost the creation of jobs when he delivered his budget on Wednesday.

The national chairman of the FSB, John Walker, said he welcomed the fuel duty stabiliser, the commitment to cut fuel duty and the introduction of 21 new Enterprise Zones to provide stability for SMEs and umbrella company contractors.

The coalition is committed to reducing bureaucracy but Walker believes we will still see new employment laws introduced this year which might stop companies taking on more staff. Osborne also missed the opportunity to extend the NIC holiday to existing firms throughout the UK, Walker added.

Kevin Green, the chief executive of the REC, said he was delighted that George Osborne had listened to the concerns of recruiters and reduced corporation tax faster than originally planned. Firms across the country will welcome this move.

He is also pleased that the government has come up with a £300 million package of measures to help Britain’s young people enter the workplace. The REC’s Youth Employment Taskforce has been urging the coalition to take action to help the increasing number of young adults who are not in work or further education, and the creation of 100,000 work experience opportunities and 40,000 new apprenticeships is welcome news.

However, Green also wants the Chancellor to go further and offer additional financial incentives to employers who take on young workers. He suggested that SMEs should be granted a one year NI holiday if they take on more young adults.

Mr. Green expressed his dismay that the planned rise in National Insurance Contributions was still going ahead and that nothing has been done to address the problems that deter the unemployed from taking up short-term job contracts.

With regards to the AWR, the REC thinks the government should have provided assurances that it will do everything possible to limit any negative impact the regulations may have. It would also have been useful if the Chancellor had outlined a comprehensive plan for the review of employment law so that firms would have certainty on the areas that this parliament would be concentrating on.

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Freelancers with digital skills could be one group to benefit from the government’s public sector cuts.

PeoplePerHour.com unveiled data last week that showed that the public sector’s response to the cuts has been to use a record number of freelancers. Invoicing for digital projects in the public sector is seven times higher now than it was this time last year.

Europe’s largest online marketplace has also seen an increase of 315% in the amount of digital job postings across all sectors in the last twelve months. Xenios Thrasyvoulou, the founder and CEO of the company, says the public sector has at last woken up to the potential cost savings in outsourcing to freelancers.

Meanwhile, the FSB has launched its Local Government Manifesto which urges local authorities to think about small businesses first and ensure the SMEs in their locale are able to create prosperity and jobs.

The manifesto stresses how important small businesses and umbrella company contractors are to a local area and urges local authorities to make sure roads and broadband coverage are improved and Local Enterprise Partnerships include small firms.

The FSB is concerned that government budget cuts may force local councils to make up for cash-flow shortages by increasing the cost of services. However, before taking any such action, councils should consider the impact the measures would have on local businesses.

Councils should also do more to engage with the local business community and consult them on a regular basis on issues that affect them. Furthermore, councils can support local SMEs by procuring more of their products and services.

The FSB is ready to work constructively with local authorities to improve their economies but it’s a two way street and councils must be prepared to work in tandem with business people and not create barriers to stop them doing their job.

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As budget day looms ever closer, various organisations have been urging the government to create an environment that supports entrepreneurs, small businesses and umbrella company contractors.

The FSB claims that the UK’s small enterprises have a crucial role to play in the economic recovery and therefore the government must demonstrate a commitment to helping them grow.

National chairman, John Walker, pointed out that last year was tough and this year doesn’t look as if it’s going to be much better with unemployment remaining high, government austerity measures biting and GDP contracting.

There are 4.8 million small enterprises in the UK and they are well placed to aid the recovery, but to do so, they need help. George Osborne needs to use the Budget to provide businesses with incentives to hire more staff and to make it viable for unemployed people to become self-employed.

The Forum of Private Business wants to see more done to ensure funding is available to SMEs and limited company contractors. Although Project Merlin is supposed to address this problem, the Forum says that increasing lending to SMEs by 15% is not going to be enough to solve the funding crisis.

The chief executive of the FPB, Phil Orford, points out the process surrounding lending is too complex and this has led to a subdued demand for credit. He wants the government to improve transparency, affordability and flexibility in SME lending as banks will be unable to meet the 15% target if demand remains at its current level.

The CBI also wants the government to take steps to help private and family-owned businesses grow. John Cridland said the coalition needs to tackle the burdensome regulations which distract business owners from creating jobs and growing their companies.

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