- One in four SMEs faced opposition to almost all expansion in the last two years
- Half of small business owners fear their businesses won’t last the next 12 months
- Garage owner Paul Miller says objections to his solar farm plans are “provincial”
A quarter of small businesses have seen their growth hampered by local objections in the past two years, a study has found.
As many as 68 percent of small and medium-sized businesses said they have faced opposition from local communities when trying to grow their business or start new projects in the past, according to research by business advisory firm Xeinadin.
This opposition often comes in the form of objections to projects such as warehouses or manufacturing plants, based on concerns about traffic, pollution, or property prices.
Local complaints: Garage owner Paul Miller’s solar park project was quashed by bureaucracy
Local opposition is a bigger problem in London and the North: 32 per cent of London-based SMEs have faced opposition almost every time they have tried to expand in the past two years.
Meanwhile, in the North East, 33 per cent have faced opposition, as has 37 per cent in Yorkshire.
In Northern Ireland, a staggering 43 per cent of businesses have faced local opposition to almost every expansion in the past two years.
This compares with just 14 percent of SMEs in the Southwest and 17 percent in the Southeast.
Companies in the consumer goods sector have been hit hardest: 45 percent have encountered local opposition most or every time they have tried to expand their operations, while 37 percent of companies in the food and beverage sector have faced a similar situation.
A third of financial SMEs have experienced a similar situation, while 36 percent of consulting firms have also been stifled.
Tim Halford, commercial director at Xeinadin, said: “Nimbyism has been the bane of SME growth for years. The needs of small business owners have been pushed to the back burner for years, so it’s good news to see Rachel Reeves commit to tackling nimbys as one of her first acts as chancellor.”
Halford added: ‘Xeinadin’s recent findings show that one in four SMEs have faced growth challenges due to Nimbyism in the past two years.
“To address this issue, the new government must prioritise reducing bureaucratic hurdles and fostering a more favourable environment for SME projects. Streamlining the planning process, providing clearer guidance and ensuring local authorities work in partnership with businesses are crucial steps.”
The problems facing expanding SMEs come as figures from Virgin StartUp show half of business owners are worried their businesses will not survive the next 12 months, up from 11 per cent in November last year.
Only 45 percent said they believe their company will be in a better financial position six months from now.
However, Virgin StartUp chief executive Andy Fishburn said: “It’s not all doom and gloom. Nearly three-quarters of business founders who responded to the study said they are thinking about expanding in the next six months.”
In fact, according to data from Virgin StartUp, the biggest challenges facing companies today are obtaining licensing certificates, the risk of another recession and tax rates.
However, for Paul Miller, the owner of Ashley Garage in Wiltshire, local opposition proved to be the main obstacle to expanding his business when he decided to repurpose a five-acre field at the back of his property as a solar farm.
The field was unproductive for most forms of agriculture, he said, and had previously been used for hay.
Smothered: Miller’s hopes of expanding his garage business were dashed by planning objections
Miller told This is Money: “We initially agreed to spend £21,000 on planning applications and specialist reports. They all came back favourable to the project, but at a high price, with costs ballooning to £44,000 at the time of submission.
However, when he submitted a planning application, Miller received responses from 18 interested parties, 14 of whom requested additional reports, which he estimates would have cost thousands of pounds to complete.
Only the climate, fire safety and rights of way teams had no objection to the proposal. Even then, rights of way requested a contribution of £2100 for barriers on the footpaths.
The local parish council said it was strongly opposed to the proposal due to the lack of community benefits as well as the impacts on the Green Belt and listed buildings nearby.
Miller told This is Money: ‘As we had already spent a considerable sum on this project and felt there was no real prospect of it being approved, I decided not to proceed.
‘It was a shame. The project would have made a small but local and direct contribution to reducing climate change, without significant inconvenience. Wildlife would not be affected and no views would be harmed, except from vehicles (mainly powered by fossil fuels) driving on the main road past the garage. And a row of trees could easily remedy that.
‘In light of the opposition from so many people bent on prioritising their particular parochial issues over the global imperative, I now realise that it was probably doomed from the start.’