An urgent call has been made by business guardians in the Forest of Dean to protect the region's crucial SMEs in the wake of the new rise to employers' National Insurance Contributions (NICs).

With just under 30,000 SMEs in operation across Gloucestershire (according to data from Shire Hall), the Forest Economic Partnership (FEP) says that these companies, rather than larger enterprises, make up the "vital constituent" in the local economy - and are the key to growth.

Ian Mean MBE, a director of the FEP, told Punchline-Gloucester.com: "There are around 3,375 small enterprises in the Forest and they make up the largest proportion of the companies in the area."

With a typical head count of up to nine employees, most of these firms are "micro enterprises", he said. In total, the FoDP believes there are there are 300 SMEs with 10-49 employees and just 45 medium-size companies with 50-249 employees within its patch.

One such typical company is Hips Social which, despite beginning its business story on the cusp of the pandemic in 2020, has steadily grown as a popular café venture at Lydney Harbourside and Hips Café, on the town's Newerne Street – and is now just about to open a third premise in Littledean as part of a collaboration with Cinderford venture Bespoke Brewery.

Co-owner Lucy Buckingham, who runs the business with partner Tom Davies and now has a payroll of 20, including 12 core staff, said: "It's the uncertainty and the feeling of taking a gamble that we face as the biggest challenge. We are in the fortunate position of being able to sustain full-time people, but we have part time people who go off to university. Above all, it's just hard to be able to provide a sense of security across the team."

She added: "Thankfully, our people are understanding - they read the news. They're also brilliant at coming up with ideas on how we go forward efficiently. We pull together and will just have to figure things out."

According to Ian Mean, the Forest's reliance of the its economy health comes down to such businesses, with the key value of small enterprises being obvious.

He said the FoD had more than 90% of its business in the micro businesses sector - the highest proportion in the county: "These small companies are under threat like never before with perhaps the biggest blow to their survival and future investment coming in the form of this 15% hike in their National Insurance Contributions, which has just come into force."

He added: "This is a hammer blow to a small company wishing to take on employees - particularly apprentices - who find they are now paying more money for every employee on the payroll. It's hardly encouraging."

As a result of the National Insurance hike, a survey by the recruitment company Reed also reveals how nearly half of 254 companies it surveyed now plan to curtailing their recruitment.

Mr Mean added: "For our SMEs, the NIC hike has piled on the pressure on firms now also facing higher minimum wages and business rates, in addition to the cost of adapting to new workers' rights. We are promised a new industrial strategy by the government - let's hope it will help our SMEs, as they are the key to growth."

● In addition to his directorship on the FEP, Mr Mean is a member of the Gloucestershire County Council Economic Growth Board.