Monday, 26 October 2021 08:59

“Overlooked” mid-market firms essential to recovery

Martin Gill, head of BDO LLP in Scotland

Scotland’s mid-sized businesses are growing faster than the UK average, yet business advisers and accountants BDO LLP say this “thriving area” of the economy is being “overlooked and undervalued.”

The mid-sized firms – those with revenue between £10million and £300million – grew turnover by 63% over the last five years from £32billion to £52billion. In comparison, the UK total rose by 55% from £0.65trillion to £1.02trillion.

The area has also seen a 39% rise in staff numbers – from 220,000 in 2010, to 306,300 in 2015.

Despite making up only 1% of companies in the last financial year, BDO found that the Scottish mid-market accounts for 15% of private sector jobs, and nearly 20% of all private sector turnover.

BDO is now calling for policy-makers to determine a bigger role for the mid-market and help the sector to expand further, through three broad areas: making the most of the UK mid-market by helping them unlock funds for growth, let those supplying to exporters zero VAT rate their products, and reduce the overseas tax barriers for expanding abroad.

Martin Gill, head of BDO LLP in Scotland, said: “Now that we are on the road to recovery, it is essential that we do not repeat the mistakes of the past and perpetuate an unbalanced economy too heavily reliant on one sector or region.

“The Government has started tackling the issues and plans around the Northern Powerhouse, devolving powers to cities and infrastructure investment are all very welcome but it is important that Scotland remains a part of any economic benefits. More can be done though, and encouraging Scotland and Britain’s mid-market has to be at the heart of Government plans. Yet currently the mid-market falls into a policy and profile gap – too big to benefit from the policies aimed at small businesses and too small to get the attention lavished on FTSE firms.

“We would like to see a ‘new economy’ that harnesses the entrepreneurial spirit of UK businesses and puts the mid-market front and centre of the UK’s growth plans.”

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