The BOSS, the Budget and regional business

Business rates remain a big worry for businesses. Despite repeated reforms and reliefs announced by this and the last government, rate rises were the most common answer when we asked about the biggest challenges facing firms in our latest Business Owners Sentiment Survey (The BOSS).

That was particularly true for small businesses, with 40% of those with turnovers from £5 million to just under £10m naming it as a top four concern, compared with 28% overall and just 20% of those with revenues of £100m or over.

Concern doesn’t just vary with size, however. We also found strong regional variation, ranging from just 14% in the East Midlands to 44% in the South West.

On the one hand, the South West has the lowest average rateable value of any English region. However, the 2026 revaluation lifted the region’s total rateable value by 9.7%, against 7.7% nationwide. This is also explained by the region’s heavy reliance on hospitality, leisure and tourism, much of which is tied to physical property. Along with agriculture, these sectors account for 34% of the region’s total rateable value (the highest of any region). Retail adds another 23%.

If that is what’s driving the concern in the region, it is worrying for the government, given the survey was conducted after July’s announcement of a cut in rates for pubs, social clubs and live music venues across England from April 2027.

Businesses in the region – and elsewhere will be hoping that rumours that the Chancellor is looking at further help with business rates at the Budget prove well founded. Almost one in four (38%) business owners working in the region named business rates reductions as among the most powerful things the current government could do to boost growth for UK businesses, compared with 28% nationally. It was the most popular answer in the region.

If the South West’s businesses are worried about the future, they’re not particularly, prepared for it, however. Because business rates aren’t the only issue where The BOSS reveals significant regional variations.

When it comes to exit and succession plans, the region sits near the bottom of the pile for those with an exit plan. Nationally, over three-quarters (76%) of business owners say they have an exit plan, including 92% in London and the East Midlands, 86% in the East, and 80% in the North East. In the South West, however, only 64% have one – the lowest proportion other than the West Midlands (62%).

The picture is more mixed when it comes to succession plans. While the South West was marginally more likely to have comprehensive plans in place (24% against 22% UK-wide), it trails behind the leaders, the North West (34%) and the East of England (30%). Business owners in the region were also far more likely to say they didn’t have any plans and did not intend to make them. More than one in ten (12%) in the South West said this, against a national average of 4% and double the proportion of the next closest, the North East, where 6% said the same.

Finally, just as some are planning for the future more keenly than others, some are also investing in it more than others.

The BOSS found significant enthusiasm and ambition related to AI, but it again varies strongly across regions. Overall, 81% of British owners said they intended to increase their business’s spending on AI in the coming year, but it varied significantly by region.

While 96% of business owners in Greater London said they would increase spending, that fell to just 66% in the South West, which trailed significantly. The next lowest was the North West at 74%. And even where they are investing, it’s more modest than elsewhere; the region had the lowest proportion (12%) saying they would increase AI spending by more than 20%. That compares to 28% in London, the East of England and the East Midlands.

On the other hand, business owners in the South West were marginally more likely than those in the East of England to agree somewhat or strongly that their business had already significantly invested in AI (62% compared with 60%).

Even where it's lowest, the enthusiasm for AI among British businesses across regions is still substantial.