Harriett Baldwin highlights problems facing start-up businesses in securing local authority contracts who apply mechanistic criteria such as requiring three years’ annual accounts. Harriett Baldwin (West Worcestershire) (Con): What assessment he has made of the contribution of new start-ups to economic growth. [127301] The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): One of the main contributions is the number of jobs created. The best estimate that we have is that start-ups are responsible for a third of all jobs created. Start-up activity has remained highly resilient, with Companies House reporting over 450,000 newly registered companies in 2011-12—the highest number since 1997-98. Harriett Baldwin: I am sure that the Minister will welcome this week’s CBI report showing that small and medium-sized enterprises are very optimistic about adding jobs in the year to come. However, what would he say to a start-up in my constituency, Energetic UK, which builds eco classrooms for schools? It is run by very experienced people, but because it is a start-up they do not have the three years’ annual accounts needed to get local authority contracts. I have written to him about this company and wonder what the Department could do to help. Michael Fallon: Instructions to contracting authorities emphasise that the assessment of financial risk should be based on a business judgment, not on a purely mechanistic application of financial formulae such as value of turnover or three years’ accounts, which could unreasonably shut out start-up companies. | Hansard