Are government growth plans addressing what small businesses actually need?

New research from The Chartered Institute of Management Accountants (CIMA) suggests there’s a significant gap between what policymakers see as the biggest barriers to growth, and the actual challenges small businesses routinely face.

The study, which sought the views of 512 SME owners and directors, 100 MPs and 2,079 UK adults in July 2026, set out to explore how those two groups view the challenges facing UK businesses, and where priorities differ.

What is holding small businesses back?

The research found that weak consumer demand was, perhaps unsurprisingly, one of the biggest concerns for SMEs, with 64% identifying low domestic market confidence as a challenge to growth and productivity.

Policy uncertainty was another key issue, cited by 71% of SMEs. Meanwhile, 62% said a stable tax and fiscal environment was a top priority for growth, while more than half (56%) highlighted the need to reduce employment-related taxes and costs.

However, these concerns contrast with the priorities identified by MPs. For example, 64% of MPs ranked energy or operational costs among the top three barriers to SME growth, compared with just one-third (35%) of business owners.

Of course, that doesn’t mean costs, regulation, trade or skills are unimportant. But for a business owner already dealing with uncertain demand and changing policies, investing in new staff, technology or expansion may feel like a longer-term consideration.

Many SMEs are focused on survival, not growth

The research also highlights how challenging the current environment is for many small businesses, with a quarter of SMEs saying their main ambition over the next 12 months is simply to survive, while just under half (45%) said the core focus will be stability. Just 2% said they were targeting ambitious growth.

What’s more, there also appears to be a communication gap between government policy and the businesses it is intended to support. Seven in 10 SMEs said they found the Government's growth plan unclear, while 15% were unaware that a growth plan even existed.

More broadly, 84% agreed that government growth announcements rarely translate into tangible support for their businesses. Taken together, the findings suggest many SMEs aren’t seeing a clear connection between the Government's ambitions for growth, and the support and guidance that’s available to them.

What does this mean for small businesses?

The research highlights the need for a more joined-up approach, with policymakers understanding the pressures businesses are facing before deciding how best to support them.

That means listening to what small business owners need, identifying where the biggest barriers to growth lie, and developing policies that address those concerns. But it also means making sure those policies work together and that businesses can clearly understand what is changing, what support is available to them and how they can benefit from it.

The message from many business owners is that the Government’s current focus on growth needs to be matched by action to create the conditions for it. If SMEs are primarily concerned about demand, policy uncertainty and the stability of their costs, addressing those issues may do more to support growth than simply encouraging them to expand.