- One in four SMEs has faced opposition to almost all expansions in the past two years
- Half of small business owners fear their business will not survive the next 12 months
- Garage owner Paul Miller says objections to his plans for a solar farm are ‘parochial’
Research shows that a quarter of small businesses have seen their growth decline over the past two years due to local objections.
Research by business consultancy Xeinadin shows that as many as 68 percent of small and medium-sized enterprises have faced opposition from the local community in the past when growing their business or starting new projects.
Often this opposition manifests itself in the form of objections to projects such as warehouses or factories, based on concerns about traffic, pollution or housing prices.
Local complaints: Garage owner Paul Miller’s proposed solar park was thwarted by bureaucracy
Local opposition is a bigger problem in London and the North, with 32 per cent of London-based SMEs facing opposition to almost every expansion they attempted in the past two years.
In the North East, 33 percent faced opposition, and in Yorkshire this was 37 percent.
In Northern Ireland, a staggering 43 percent of businesses have faced local opposition to almost every expansion over the past two years.
By comparison, this applies to only 14 percent of SMEs in the southwest, and to 17 percent in the southeast.
Companies in the consumer goods industry have been hit hardest, with 45 percent facing local opposition, almost always when they tried to expand their operations. In the food and beverage industry, 37 percent faced similar opposition.
A third of financial SMEs have experienced similar problems, while 36 percent of consultancies have also faced pressure.
Tim Halford, Chief Commercial Officer at Xeinadin, said: ‘Nimbyism has been the scourge of SME growth for years. The needs of small business owners have been pushed to the bottom of the pile for years, so it’s good news that Rachel Reeves is pledging to tackle NIMBYism as one of her first acts as Chancellor.’
Halford added: ‘Xeinadin’s recent findings show that one in four SMEs has faced growth challenges due to NIMBYism in the past two years.
‘To address this, the new government must prioritise reducing bureaucratic hurdles and promoting a more supportive environment for SME projects. Streamlining the planning process, providing clearer guidance and ensuring local authorities work in partnership with businesses are crucial steps.’
Growing SMEs are facing challenges after figures from Virgin StartUp revealed that half of business owners are worried their business will not survive in the next 12 months, up from 11 percent in November last year.
Only 45 percent think their company will be in a better financial position in six months.
Despite this, Andy Fishburn, managing director at Virgin StartUp, said: ‘It’s not all doom and gloom. Nearly three-quarters of business founders who responded to the survey said they were looking to expand in the next six months.’
According to data from Virgin StartUp, the biggest challenges for companies right now are obtaining licensing certificates, the risk of a new recession and tax rates.
But for Paul Miller, owner of Ashley Garage in Wiltshire, local opposition was the biggest obstacle to expanding his business, so he decided to convert a five-acre field behind his property into a solar farm.
The field was not productive for most forms of agriculture, he said, and was previously used for hay.
Smothered: Miller’s hopes of expanding his garage business were dashed by objections to the building plans
Miller told This is Money: ‘Initially we agreed to invest £21,000 in planning applications and specialist reports, all of which were beneficial to the project but at a significant cost, with costs rising to £44,000 at the time of submission.
However, when Miller submitted a planning application, he received responses from 18 interested parties, 14 of whom requested additional reports. Miller estimates that these reports would have cost thousands of pounds to complete.
Only the Climate Team, Fire Safety and Rights of Way raised no objections to the proposal. Even then, Rights of Way asked for a contribution of £2,100 for footpath fencing.
The local parish council indicated that there were strong objections to the proposal due to the lack of community benefits and the impact on the Green Belt and nearby listed buildings.
Miller told This is Money: ‘Because we had already spent a significant amount of money on this project and we felt there was no realistic chance of it ever being approved, I decided not to proceed with it.
‘This was a shame. The project would have made a small but local and direct contribution to reducing climate change, without any significant drawbacks. It would not have affected nature and would not have damaged any views, except for those of (mainly fossil fuel powered) vehicles driving along the main road past the garage. And a row of trees could easily remedy that.
‘Given the opposition from so many people who put their own local problems ahead of the global need, I now realize that it was probably doomed from the start.’