The Federation of Small Businesses (FSB) Wales has outlined its priorities for the Welsh Government’s Draft Budget 2026-27 to the Senedd Finance Committee, calling for bold and crucial measures to support small and medium-sized enterprises (SMEs) amidst economic challenges and political transition.
With the upcoming 2026 Senedd election and a new, larger Senedd on the horizon, FSB Wales stresses the critical need for a budget that delivers immediate relief and long-term stability to empower SMEs to drive job creation and economic growth across Wales.
FSB Wales is the authoritative voice of businesses across Wales, advocating for a better social, political, and economic environment. With a strong grassroots structure, a Members Advisory Council and a dedicated team based throughout Wales, FSB Wales ensures its members’ voices are heard at the heart of decision-making and beyond.
FSB Wales’s submission to the Senedd Finance Committee highlights the urgent need to address rising costs, declining business confidence, and barriers facing small businesses. It also highlights FSB’s UK Small Business Index (Q2 2025), which shows 27% of small firms predicting shrinkage or closure in the next 12-months and a confidence level of -44 points. This is the first time the index has found more businesses expect to shrink than grow in its history, which illustrates the low confidence arising from the economic pressures from increased National Insurance contributions, rising costs and wages, and enduring pandemic debts.
FSB Wales calls for the Welsh Government to use its powers to mitigate these effects and deliver:
- Business Rates Reform: Extend differential multipliers to Retail, Leisure, and Hospitality sectors so that they face lower costs for the long-term, to support high street regeneration and thriving local communities. Support independent local shops and restaurants by maintaining reliefs as necessary to ensure no eligible businesses are worse off next year through business rates. FSB Wales also urges transparency on the impact of moving to discretionary reliefs, so that reliefs aren’t given automatically, which has reduced accessibility to eligible support for time-poor SMEs.
- Skills and Apprenticeships: Restore apprenticeship funding to pre-2023/24 levels to address the 6,000 fewer apprenticeship starts and £50.3 million economic loss reported last year, ensuring SMEs can access skilled talent for projects, such as Floating Offshore Wind.
- Business Support and Investment: Reinstate business support funding to pre-EU exit levels in real terms, commit to multi-year budgets, and introduce a voucher scheme to help smaller firms access private sector support to promote growth.
- Planning and Local Authority Capacity: Continue funding to boost planning authority expertise, with incentives to speed up decisions and compensate firms for delays, reducing barriers to SME growth.
- Transport: Prioritise public transport improvements, particularly in rural areas, where 30% of SMEs report barriers to hiring due to inadequate transport networks. Ensure Transport for Wales reforms remain cost-effective and aligned with SME needs.
In the longer term, FSB Wales emphasises aligning the budget with the Well-being of Future Generations framework, calling for:
- A reformed Fiscal Framework to enhance financial planning and borrowing flexibility.
- Clarity on replacing the Shared Prosperity Fund to support a comprehensive economic strategy with local authorities.
- Stronger collaboration with the Development Bank of Wales and Wales Pension Partnership to expand SME access to finance.
Commenting on the submission, FSB Wales Chair, John Hurst, said:
“With Wales’s employment rate falling and a low economic activity rate, compounded by the UK Government’s National Insurance increase for employers, impacting 940,000 across the UK, small businesses are under immense pressure. FSB Wales urges Welsh Government to leverage its powers to mitigate these challenges and align with the UK’s Industrial Strategy and Small Business Plan to restore confidence and drive growth for SMEs across Wales.
“With a late UK Autumn Statement pending, FSB Wales calls for cross-party collaboration to pass a budget that supports our SMEs. This budget is a pivotal opportunity to provide SMEs across Wales with the clarity, confidence and support needed to plan, invest, and grow. We urge Welsh Government and all Members of the Senedd to work to deliver a budget that fosters resilience, supports local communities, and sets a strong foundation for any incoming Welsh Government next year.”
