Billions of pounds in EU funding dedicated to supporting small firms must be replaced to avoid the risk of an economic slowdown post-Brexit, according to the latest Federation of Small Businesses (FSB) report.

It is calling on the new Government to seize the opportunity presented by Brexit to radically reform England's business support landscape.

Its proposals include creating a streamlined Growth Fund for England before the Brexit process completes. The Fund would bring together a domestic replacement for EU funding and the Single Local Growth Fund (SLGF). The EU has dedicated £3.6bn to developing the competitiveness of UK small firms for the funding round ending in 2020.

There is currently no regional development spend budgeted at the national level beyond 2021.

The new 'Reformed Business Funding: What small firms want from Brexit' report finds that eight in ten (78%) small firms have sought business support services over the last year.

Of those that have applied for such schemes, the majority believe EU funding has had a positive impact on their business (68%) and local area (64%). The research indicates that the benefits of EU funding are even broader, with many other businesses indirectly gaining from wider economic growth.

Mike Cherry, FSB national chairman, said: "Small businesses across the country are staring into a business support black hole from 2021. This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions.

"If the next Government is serious about developing an Industrial Strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU."

likely to find out about opportunities through existing business contacts (34%).

Under FSB's proposals, a single Growth Fund for England would simplify the funding streams available to Local Enterprise Partnerships (LEPs) for the establishment of effectively marketed, properly assessed business support programmes. Funding would also be provided to secure the future of Growth Hubs and establish a 'What Works Hub" equipped to evaluate the effectiveness of different schemes and facilitate their improvement.

Mike Cherry added: "Small businesses are clear that EU-funded support is a vital lifeline. But they're equally clear that the process for attaining that support can be a real battle. It's not unusual to find small firms giving up halfway through an application because forms are too long or complex, or they fear grants will be clawed back at the first sign of an admin slip. Sadly, it's often the time-poor businesses most in need that struggle in the face of this bureaucracy.

"Brexit marks an unprecedented opportunity for fundamental reform. LEPs and Growth Hubs must be empowered