Paying fees for government business advice: an assessment of Business Link experience
Source: Applied Economics, Volume 42, Number 1, January 2010 , pp. 37-48(12)
Abstract:Business Link (BL) in Britain provides a unique opportunity to examine a government policy support to small firms which has targeted fee income as a major part of its management objectives in order to increase the 'sense of value' of the services offered. This article examines the influence of fees on client impact and satisfaction. It finds that fees have no significant relationship with client satisfaction or impact. Government targets and manager/advisor policies have, therefore, been wrong to pursue an explicit fee-based targeting strategy. Instead, satisfaction and impact are most significantly influenced by the character of the BL provider, being significantly higher for franchises managed by chambers of commerce and other agents, and being poorer for independent stand-alone providers. Service type has a significant influence on the propensity to charge a fee and on service impact. Small- and medium-sized enterprises characteristics have little influence on client evaluations. The policy implication is that advisors should focus on what they do best and can quality assure; in other cases, they should use referral to other professional advisors. The scope to raise fees from government advice services is, therefore, opportunistic and limited, and should not be incentivized.
Document Type: Research Article
Publication date: January 1, 2010