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An image advertising the Help to Grow: Digital scheme
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‘Help to Grow: Digital’ bill tops out at £33m

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A government scheme designed to help small businesses adopt new technology, including accounting software, closed in just over a year having hit just 1% of its sign-up target. It cost the taxpayer more than £30m, with each successful application valued at almost £40,000 per voucher.

6th Jun 2023
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A Freedom of Information request filed by AccountingWEB revealed that, despite an ambitious target of digitising 100,000 businesses, just 830 Help to Grow: Digital vouchers were approved and paid between the scheme’s opening on 12 December 2021 and its closure on 31 March 2023. A total of 1,507 applications received.

The UK government’s broader Help to Grow initiative was initially given a five-year budget worth £520m by the then Chancellor Rishi Sunak, with the digital element of the scheme allocated £296m of the budget. However, the Department for Business and Trade confirmed to AccountingWEB that when it finally closed on 31 March 2023, the programme cost was £33m. 

Scheme shortcomings

First promoted in January last year, the digital element of the scheme was intended to ramp up technology adoption and SME (small or medium-sized enterprise) productivity by offering free advice and discount vouchers of up to £5,000 for small businesses looking to adopt digital accounting or customer relationship management (CRM) tools for the first time.

However, Help to Grow: Digital came under fire within weeks of launching for a variety of shortcomings in the way it was drawn up. These included its narrow eligibility criteria and lack of choice of software types and vendors – with just three vendors featured in the digital accounting software section.

Rumours of low take-up soon surfaced, and a collection of professional groups including the Association of Accounting Technicians (AAT) and the Association of Chartered Certified Accountants (ACCA) wrote to the government and appeared before MPs, asking for the scheme to be opened up and reformed.

Some of these criticisms were acknowledged in changes made to the initiative in July 2022, as restrictions on the type of business that could apply were loosened and several e-commerce tools added to the list. However, unincorporated businesses and those with no employees – those that potentially stood to benefit the most from financial help to transform their systems – remained frozen out. 

Towards the end of last year when the government came looking for savings, the numbers did not add up for Help to Grow: Digital and the scheme was quietly canned in December 2022.

“With take-up lower than expected, the government was unable to justify the continued cost of the scheme to the taxpayer,” said a statement. “This decision enabled the government to refocus efforts towards other support mechanisms for small businesses, ensuring businesses get the backing they need in the most efficient and productive way possible.”

‘Take free money and provide bad advice?’

At the time of launch, a release accompanying the scheme claimed businesses that adopt digital accounting software on average reap an 11.8% increase in employee sales over three years.

However, despite a £7m marketing campaign, the scheme failed to convince businesses of the merits of adopting the tools that made it onto the Help to Grow: Digital product pages.

As shown by the table below, accounting products made up less than a quarter of all redeemed vouchers for the scheme. 

Product type

Voucher redemptions (count)

Voucher redemptions (%)

Accountancy

191

23%

Customer Relationship Management

436

53%

E-commerce

203

24%

Total

830 

100%

Just three vendors appeared in the digital accounting software section of the scheme’s product pages: Sage, QuickBooks Online and Crunch, with other software houses in the industry complaining privately about red tape, an unwieldy procurement process and opaque selection criteria imposed by the government.

Commenting in July last year John Toon, tech strategy lead at accountants Beever and Struthers said: “The poor selection of suggested business tools for CRM, accountancy and e-comm solutions is a major inhibitor for any accountant worth their salt to actually get onboard with this scheme. The ethical conundrum is thus – take free money and provide bad advice, or provide appropriate, reasonable advice for a fee.”

Darren Fell, CEO of Crunch, one of the participating vendors, put the blame for the scheme’s failure firmly at the door of those who drew up the criteria.

“Against our advice and the entire industry’s, they added so many caveats to the Help to Grow: Digital programme that it was basically unusable and didn’t provide help to the small businesses that really needed it,” said Fell. 

“Essentially it was a voucher-based system that could have been easily picked from the numerous SaaS-based services but instead they opted to build it from scratch,” he continued. “All the selected providers, including us, had to invest heavily to plug into their system, which is now defunct. Overall, it’s a colossal waste of taxpayers’ money.”

RSM consulting contract

An intriguing sub-plot to the Help to Grow: Digital story is the role of top ten firm RSM UK. 

In January 2022 its consultancy wing was awarded a three-year contract as Help to Grow: Digital independent evaluation partner to “produce data collection tools and conduct process evaluation”.

The Department of Business and Trade told AccountingWEB that while the original contract value was £1,559,789 to conduct evaluation work between January 2022 and March 2025, to reflect the closure of the scheme, “the contract value and length have been revised”. 

While the department did not provide a figure for the final amount, a report in the Mirror suggests it is around £400,000.

Replies (9)

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the sea otter
By memyself-eye
06th Jun 2023 14:42

Hey Ho another £33 million wasted!
You do wonder why anyone would not immediately jump ship to join the black economy when you see numbers like this.

If I still cared, I would despair........

Thanks (6)
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By Hugo Fair
06th Jun 2023 15:10

"offering free advice and discount vouchers of up to £5,000 for small businesses looking to adopt digital accounting or customer relationship management (CRM) tools for the first time"
... and yet "It cost the taxpayer more than £30m, with each successful application valued at almost £40,000 per voucher."

Something doesn't add up ... presumably they weren't using infallible 'digital technology' themselves!

Thanks (6)
Replying to Hugo Fair:
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By listerramjet
08th Jun 2023 12:35

Can you imagine a typical SME spending real cash at this sort of level for accounting software?

Thanks (2)
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By JustAnotherUser
06th Jun 2023 15:55

the absurd amounts of money just thrown away, I wouldn't even be surprised in the grand scheme of things how small this is.... crazy how many layers this must have gone through while they all pat each other on the back and blow away millions upon millions. The real winners were never meant to be the tax payer were they :(

-initially given a five-year budget worth £520m
-a £7m marketing campaign
-original contract value was £1,559,789 to conduct evaluation work
-suggests it is around £400,000.

Thanks (4)
Tornado
By Tornado
06th Jun 2023 16:11

he continued. “All the selected providers, including us, had to invest heavily to plug into their system, which is now defunct. Overall, it’s a colossal waste of taxpayers’ money.”

Nowhere near the really colossal waste of £3,000 million of taxpayers money on the MTD project.

Thanks (7)
By ireallyshouldknowthisbut
06th Jun 2023 17:06

Well trebles all round.

That has done exactly what it was supposed to do.
1. Big announcement for lots of cash to look like we are doing something.
2. Plenty of jobs for consultants etc, palms greased, favours paid off
3. Some jobs for the boys running the thing on a hearty whack no doubt, as just one of many other busy jobs
4. Spent only a fraction of the cash on grants (ie oiks and non-party donors, ie general public riff raff)

Id say that went entirely to plan myself.

£30million+ of taxpayers money into the pockets of the right people whilst giving the pretence of helping business. And all 100% legitimate above board no theft or crime committed.

Thanks (14)
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By AndrewV12
08th Jun 2023 10:44

The road to financial hell is paved with good intent.

Just another scheme to add to the list of poor value for money paid for by the taxpayer.

Thanks (3)
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By johnjenkins
08th Jun 2023 11:32

Just shows to go that "digitisation" isn't what everybody wants.

Thanks (1)
Replying to johnjenkins:
Tornado
By Tornado
08th Jun 2023 11:50

I expect that when AI gets a hold, Digitisation is the one thing you will NOT want.

The safest method to do any transactions in the future will be with bits of paper and cash as no one will trust anything Digital. Keep things well away from the prying eyes of AI bots.

Thanks (2)