Farmers will receive increased payments for protecting and enhancing nature and delivering sustainable food production under the Government’s Environmental Land Management schemes, Defra has announced. Speaking at the Oxford Farming Conference, Farming Minister Mark Spencer announced more money for farmers and landowners through both the Countryside Stewardship and the Sustainable Farming Incentive schemes, which will provide more support to the industry and drive uptake at a time of rising costs for farmers as a result of global challenges. He also confirmed an expanded range of actions under the schemes, which farmers could be paid for, would be published soon. The changes mean farmers could receive up to a further £1,000 per year for taking nature-friendly action through the Sustainable Farming Incentive. This new Management Payment will be made for the first 50 hectares of farm in an SFI agreement, to cover the administrative costs of participation and to attract smaller businesses – many of whom are tenant farmers – who are currently under-represented in the scheme. SFI is already paying farmers to improve soil and moorlands, and an expanded set of standards for 2023 will be published shortly. In addition, farmers with a Countryside Stewardship agreement, of which there are now 30,000 across England, will see an average increase of 10% to their revenue payment rates – covering ongoing activity such as habitat management. Defra is also updating capital payment rates, which cover one-off projects such as hedgerow creation, with an average increase of 48%. Taken together, these changes are expected to mean more farmers taking individual positive actions such as creating hedgerows and flower-rich grass areas on the edge of fields and will support farmers and landowners in making space for nature alongside sustainable food production. This will help us meet the UK’s legally binding environment targets and contribute to our aim of halting biodiversity loss by 2030, agreed at COP15 in December last year, while supporting the industry to farm more home-grown produce and take advantage of innovation. Farming Minister Mark Spencer said: “My challenge to our farmers is simple – this year, take another look at the Environmental Land Management schemes and think about what options and grants will help support your farm. “As custodians of more than 70% of our countryside, the nation is relying on its farmers to protect our landscapes as well as produce the high-quality food we are known for, and we are increasing payment rates to ensure farmers are not out of pocket for doing the right thing by the environment.

“By increasing the investment in these schemes, I want farmers to see this stacks up for business – whatever the size of their holding.”

Under the EU’s Common Agricultural Policy, which the UK has now left, farmers received payments based on how much land they held, meaning half the available cash went to the top 10%. Outside the EU, the UK is bringing in a new, fairer farming system which is designed in the best interests of our industry, in partnership with the sector. As the UK works towards its targets of halting the decline of nature by 2030 and hitting net zero by 2050 the new system, which is being phased in by 2027-8, puts money into farmers’ pockets and the wider rural economy based on actions taken to enhance nature and drive innovation in agriculture.

Two thirds of small firms (66%) plan to make some form of investment in their business by 2024, but under half (49%) feel they are fully aware of the different types of financing options available to them, new research has found. Federation of Small Businesses’ (FSB) new report, Credit Where Credit’s Due, draws together findings which paint a concerning picture around access to finance for UK small businesses, and calls for action to stop the lending gears from grinding to a halt – as happened after the 2007 credit crunch – which, if history is allowed to repeat itself, would risk undermining the country’s economic recovery. Three in five small firms (59%) have applied for finance over the past five years, although the extraordinary circumstances of the pandemic meant the proportion of businesses taking on debt – many of them for the first time – grew. Small and medium-sized enterprises are now collectively carrying around £36 billion more in debt than they were in January 2020, pre-Covid. Access to finance is vital for the small business sector as a whole, allowing firms to invest and grow. Finance options are also vital to keep small businesses afloat in choppy waters due to the cost of doing business crisis, skyrocketing energy costs, supply and travel disruption, and the ever-present scourge of late payments. However, only two in five small businesses (38%) say they feel it is easy to find answers to their questions on financial applications, with three in ten (29%) saying they thought that unfair clauses and provisions were included in applications. Meanwhile, the success rates of finance applications have dropped precipitously since the Covid loans era, with under half (46%) of applications successful in Q3 2022, compared with a pre-Covid success rate of nearly two in three (64%). The smaller a business is, the less likely its request for finance is to be approved, FSB research found. The interest rates offered to small business customers have also risen, with nearly a third of small firms who applied for finance in Q3 2022 offered a rate of 10% or above. In light of the findings, FSB is urging the Government, financial regulatory bodies and other stakeholders to take action to improve the financing landscape for small businesses, to give them more choice and clarity around the options available to them:

• The Government should reverse direction from its announcement on Research and Development tax credits at the Autumn Statement that will seriously reduce spending on R&D by SMEs in the UK economy.
• The Government should introduce a VAT-based capital investment incentive, to drive up the amount of small business investment in a faster, simpler way, rather than the outgoing big business-friendly super-deduction.
• The British Business Bank should encourage the use of the Bank Referral Scheme, where lenders are required to share details of SMEs they reject for finance, so those businesses can be approached by alternative lenders, and should also expand the number of banks and approved alternative lenders in the scheme.
• The Financial Conduct Authority should reverse its decision to move fees and levies to a regressive flat-fee system, which discourages smaller finance providers from entering or remaining in the market, and ultimately limits the range of finance available to small businesses.
• The Start Up Loans scheme should be expanded from 11,000 to 15,000 loans per year, to encourage more people to give entrepreneurship a shot.
• The Business Banking Resolution Service needs to adequately address outstanding cases and clear its backlog, passing on compensation and delivering value for money. The deadline for historic cases also needs to be extended beyond February 2023.
• All future capital allowances should include second-hand capital purchases, to allow small businesses to offset the cost of upgrading their machinery without the requirement of the asset being new. A piece of equipment could be second-hand, but could still represent a significant upgrade to a small firm, helping them to boost their productivity.
• The Government should announce that the Seed Enterprise Investment Scheme will not be closed down in 2026, to provide greater certainty and longevity to users of the scheme’s investment plans. The investment limit for the scheme should be uprated in line with inflation each year.

Martin McTague, FSB’s national chair, said: “Small businesses that cannot access finance are small businesses that are cut off from opportunities to grow and expand. It’s that simple. “As a country, we cannot afford to have a repeat of the post-credit crunch scenario, where the dreams of thousands of entrepreneurs and business owners were crushed by a withdrawal of finance options, leaving them unable to continue, and deepening the UK’s economic woes. “Many small firms now are in a highly precarious position, carrying debts from the pandemic, with the Bank of England raising the base rate, and with funding options getting scarcer and costlier. “Our report pulls together various strands which together add up to a worrying picture of potential devastation, if the situation is allowed to drift. “There is, luckily, a lot that can and should be done by the Government and by other bodies to improve the funding landscape for small firms, getting productive capital into businesses with enormous potential for growth. “Reversing the recent, disastrous decision to cut R&D tax credits would send a strong signal that the Government is listening to what small firms need, and is backing the deep wells of innovation and enthusiasm which exist among start-ups, entrepreneurs, and small businesses alike. “The recently announced consultation on late payments – a dead hand around the throats of millions of small firms, cutting off their cash ‘oxygen’ and causing vast amounts of unnecessary and unethical stress – is a positive step, although we know what needs to be done: the audit committees of large corporates need to publish details of payment practices in their supply chains in their annual reports. What’s stopping the Government from acting now, rather than after a months-long consultation period? “Ultimately, small firms are looking for signs that they won’t be punished for looking to invest and expand. We’ve set out a comprehensive programme which would transform small businesses’ finance options, boosting economic growth and empowering entrepreneurship – it’s now up to the Government to move from words to deeds, to get vital funds to the small businesses who will transform them into new products, new jobs, and new premises, providing fresh hopes of recovery amid the economic gloom.”

An artificial intelligence (AI) company, which has launched a new platform to help social landlords manage rent arrears, has raised a further £500,000 from NPIF – Mercia Equity Finance, which is managed by Mercia and part of the Northern Powerhouse Investment Fund. Pivigo’s platform – that is already used by Peabody, London Borough of Camden, Community Housing and Cobalt – uses machine learning to help maximise rent collection, identify tenants most in need of support and transforms productivity. The latest funding follows an initial £1.25m investment from Mercia and NPIF in 2021, which helped the Sheffield-based company to develop the platform. Since then it has more than doubled the size of its team to over 20. The latest round will enable Pivigo to create new jobs, boost its sales and marketing, and roll out the product to more social landlords. Founded in 2013 by entrepreneur Jason Muller, Pivigo started out as a consultancy delivering bespoke solutions for clients including AstraZeneca, Royal Mail, Compare The Market and the Food Standards Agency. It went on to develop an ‘AI as a service’ platform that could be adapted to create different products for different sectors. Its social housing product Occupi is the first of these. The roll-out is being led by its CEO Alexandra Willard, who was previously CEO of connected car company Tantalum and was Entrepreneur-in-Residence at UK chip maker Imagination Technologies. Alex Willard, who is the company’s CEO, said: “Managers can only make decisions on the basis of the data insights available, however most organisations lack data insights so make poor decisions. Machine learning radically improves the odds – helping to improve outcomes and profitability. Our product enables organisations to feel the benefits without the need for their own data science team. “We are pleased to be working with Mercia to roll it out to social landlords, especially at the current time when the cost of living crisis is putting their tenants’ finances under greater pressure.” Will Clark of Mercia added: “Social landlords have to strike a difficult balance – maintaining the flow of rental income and preventing a build-up of arrears while supporting those most in need. Pivigo’s platform helps them manage their operations more intelligently and redefine their approach to arrears management. We believe there is a huge potential market, not just in the UK but in other countries with a big social housing sector. The funding will help Pivigo to tap into that.”