Publishing his second report to government: Growing Micro Businesses, the Prime Minister’s enterprise adviser Lord Young focused on strategies that would help the UK’s smallest businesses – those with fewer than 10 employees – to achieve growth.

The report calls for the government to legislate to abolish pre-qualification questionnaires (PQQ) on public sector contracts worth less than £200,000 and to set single-market principles to standardise public sector processes so that suppliers know what to expect when dealing with them.

Scrapping the PQQ at this level would simplify bidding, payment and advertising of contracts, and remove complex processes, high costs and inconsistency, which are often barriers to SMEs bidding for such work, the report says.

Also high on the list of recommendations was the scrapping of the age cap for eligibility for the government’s Start-Up Loan scheme. The initiative, launched in September 2012, initially aimed at 18-24 year-olds but this was extended in January to include those up to 30. However, Lord Young’s report said the age cap must be scrapped altogether so that entrepreneurs who would otherwise struggle to secure the necessary finance could benefit.

The scheme, headed by entrepreneur James Caan, helps start-ups get off the ground by providing loans typically worth £4,500 and mentors from private sector delivery partners such as

Other recommendations in the report include developing a new charter and award scheme to incentivise business schools to help SMEs grow, a £30m voucher scheme to encourage small businesses to enlist external advice on growth and allowing the private sector to provide specialist SME advice on the government’s website.

Commenting on his report, Lord Young said: “We have one of the best environments in the world for the creation of new firms. What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow.

“Growing our smallest businesses would transform our economy – they are the vital 95%. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero. We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”

Business minister Michael Fallon said: “We are supporting ambitious small firms to grow, create jobs and achieve their goals. Whether that’s by providing access to mentoring and advice, cutting red tape or through successful schemes like Start-Up Loans.

“But we are determined to go further and faster: Lord Young’s important report sets out a series of practical steps that can make a real difference to entrepreneurs across the country.”