The scheme will stop taking on new customers from the end of November with all support and related activity contractual commitments being honoured until 31 March 2016 when it officially ends.
The business support helpline will continue to be available after that date and will be the main support mechanism.
BIS will also provide further funding for Growth Hubs allowing them to provide tailor made support small businesses to start and scale up in local areas. The government will be giving these hubs £12m in 2016/17 and £12m in 2017/18.
Commenting on the service’s closure, small business minister Anna Soubry said:“The most important way we can help small businesses is to continue to secure a strong, growing economy and that’s exactly what this government is doing. We’ll keep cutting red tape and have extended small business rate relief for an extra year, freeing up small firms to do what they do best.
“Where taxpayers’ money is used to provide support, this is best done at the local level which is why we’re providing further funding to Growth Hubs and away from Whitehall.”
The Business Growth Service was formed in December 2014 and has helped around 9,700 businesses to date.
Businesses eligible for the service needed to have less than 250 employees, based in England and with a turnover of under £40m to improve and grow. Businesses had their own personal account manager which provided a package of support tailored to their needs.
Communications of the service closure began to its users on Friday. A BIS spokesperson said: “In the last parliament we responded to concerns that small businesses couldn’t find the support they needed. Since then we have funded the creation of Growth Hubs and by April 2016 there will be 39 of them providing support to businesses across England.”
BIS added that the British Business Bank will create a fund of over £400m with Local Enterprise Partnerships in the North West, Yorkshire & the Humber and Tees Valley to invest in smaller businesses. Together with a separate North East fund, this will make over £500m available across the Northern Powerhouse.
Tax partner at UK200Group member firm Whittingham Riddell Duncan Montgomery said he lamented the demise of the Growth Accelerator as it had made a “big difference” to many of the firm’s clients.
“Removing this service abruptly as part of a programme of cuts that do not appear thus far to have balanced our annual books, seems to be counterintuitive. Small to meduim size businesses create jobs, pay taxes and drive the economy upwards. Helping them do that is a positive investment,” he said.
There was no mention of the closure in the spending review, and some people have been left disgruntled.
