Small Businesses Feel Overlooked as UK Government Misses Opportunity to Tackle Unemployment and Mental Health Crisis

Small and medium-sized businesses across the UK say they are eager to support the government in tackling major national challenges—but many feel they are being overlooked and ignored. That’s the key finding from a new report by ReGenerate, which reveals widespread frustration among businesses who believe their potential to support the government’s missions on unemployment and mental health is going untapped.

The report, Partnering for Mission Delivery: Unlocking the Power of Business, found that 77% of UK businesses want to play a greater role in tackling national issues, including job creation and mental health support. But over half (55%) say their attempts to collaborate with government departments have gone unanswered, while 64% say they simply don’t know who to speak to in government to get involved.

That figure rises to 68% for micro-businesses—the smallest firms, which account for 21% of all UK businesses—suggesting that the very companies at the heart of local economies are struggling the most to engage with policymakers.

“Businesses are making an impact in tackling social challenges, despite the system, not because of it,” said Ed Boyd, Co-founder and CEO of ReGenerate. “A more joined-up approach from the government could significantly improve society.”

SMEs Offer Local Reach and Innovation

The report highlights the power of SMEs and entrepreneurs to bring community-based, scalable solutions to some of the UK’s most pressing problems. From employing people with barriers to work, to creating mental health-friendly workplaces and supporting local economies, SMEs are already delivering real impact. However, they say they lack a clear route into government decision-making and need better recognition and support.

“If the government is serious about fixing the enormous social and environmental challenges we face in this country, then they urgently need to step up to unleash the full potential of the UK’s businesses,” said Tessa Clarke, Co-founder and CEO of Olio, a fast-growing food-sharing platform.

The report is backed by a range of UK businesses, including well-known names like Greggs, Greene King, and Octopus Group, and features 60 case studies showcasing business-led solutions to the UK’s five national missions.

Call for an Office for the Impact Economy

One of the key recommendations from ReGenerate is the creation of an Office for the Impact Economy—a central hub within government that would allow businesses of all sizes, including SMEs, to share ideas, access support, and contribute to policy solutions.

“There is a huge amount of power in businesses to solve key social and environmental challenges,” said Graham Briggs from Greene King. “We need a clear focal point within government that we can turn to—for both support and to share our expertise.”

This comes just days after the government announced a new Office for Responsible Business Conduct, but ReGenerate says more is needed to ensure real collaboration, especially with smaller firms outside the corporate mainstream.

Unlocking Purpose-Driven Growth

The report also shows that purpose-driven businesses are not only socially impactful—they’re also more likely to grow. SMEs that integrate social or environmental goals into their business models are seeing faster growth and increased customer loyalty, offering a win-win for both communities and business success.

Roisin Currie CBE, CEO of Greggs, spoke about the success of the company’s Fresh Start programme, which supports people leaving prison into employment:

“Empowering more businesses to do what we do will help bring more people into work and build stronger, safer communities.”

Time for Government to Engage

As the UK faces complex challenges—from mental health and unemployment to energy security and housing—ReGenerate’s report argues that the government cannot afford to overlook the problem-solving power of SMEs.

With a combined turnover of £5.3 trillion and 27.8 million people employed across UK businesses, unlocking closer cooperation between public and private sectors could make a significant impact—both socially and economically.

For small businesses, the message is clear: they want to be part of the solution. But for that to happen, government must open the door to meaningful, long-term partnerships.

Read the full report and explore how SMEs can play a bigger role in national mission delivery at www.regenerate.org.uk.