Disabled entrepreneurs are being held back by widespread financial, operational, and accessibility barriers — at a staggering cost to the UK economy of up to £230 billion, according to the final report of the Lilac review, published on Monday.
The government-backed, independent review highlights the systemic disadvantages faced by the estimated one in four UK business owners who have a disability or long-term health condition. The findings show that these businesses — which already contribute nearly 9 per cent of private sector turnover — are significantly underfunded and underrepresented due to deeply entrenched inequalities.
Launched in February 2024, the Lilac review set out to understand the specific barriers facing disabled-led businesses and propose actionable reforms. It calls on central and local government, banks, investors, and business support providers to build a “more inclusive economy”.
Among the core issues identified are a higher likelihood of economic disadvantage, the ongoing personal cost of managing a disability, concerns over losing access to welfare benefits, and productivity impacts linked to managing health conditions. These factors combine to create a “systemically unequal financial landscape” that disadvantages disabled founders.
The review comes at a politically charged moment, with Labour MPs pushing back on government proposals to restrict disability benefits for people with less severe conditions — a move that has fuelled internal dissent following the party’s disappointing local election results.
A key recommendation is for a “trust-based approach” to disability assessments, scrapping frequent reassessments for people with life-long conditions to ease pressure on both entrepreneurs and the Department for Work and Pensions.
Victoria Jenkins, co-chair of the Lilac review and founder of adaptive fashion brand Unhidden, said: “Disabled entrepreneurs are innovative, impactful, and growing. Yet we remain under-represented, underfunded, and underestimated. The Lilac review is a bold and necessary step toward recognising the unique challenges that disabled entrepreneurs face — and more importantly, toward removing them.”
The report notes that nearly half of disabled business owners cite access to finance as a major barrier, while one in three said existing business support schemes lacked adequate accommodations.
Alarmingly, previous research cited by the review suggests that disabled entrepreneurs are up to 400 times less likely to secure investment than their non-disabled peers. It finds that equity-based funding mechanisms — such as venture capital and angel investment — remain largely inaccessible due to biases, inaccessible pitch formats, vague eligibility criteria, and rigid application processes.
The review calls for major reforms, including inclusive procurement practices in government contracts and local councils appointing dedicated representatives for disabled entrepreneurship. It also urges closer collaboration between health and business departments to provide more joined-up support.
It argues that removing structural barriers would not only benefit disabled entrepreneurs but deliver wider economic and societal gains. As the report points out, disability-driven innovation has historically produced technologies we now take for granted — from the electric toothbrush to text messaging.
Small business minister Gareth Thomas wrote in the report’s foreword that disabled business owners are “being let down by systems and processes” and confirmed that the government will consider the review’s recommendations as it develops a new SME strategy.
With disabled entrepreneurship already making a significant contribution to the private sector, the Lilac review is a wake-up call — and a roadmap for unlocking a vast well of untapped economic potential.
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Barriers faced by disabled entrepreneurs cost UK economy £230bn, report warns
