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Gloucestershire Chamber of Commerce organised an event at Gloucester Rugby Club for leading businesses in Gloucestershire to respond to the Chancellor’s spending review. The immediate response was positive, although everyone felt that detail was lacking. Suzanne Hall-Gibbins from Gloucestershire Chamber of Commerce felt that the Chancellor’s announcement was very clever in using a mixture of percentages and numbers so that the worst news was still to be revealed.
[ Click here to see the event coverage from BBC Points West on YouTube ]
• Social housing budget to be cut. Grants reduced by 50%.
• Reforms on local planning.
Richard Draper from Aqua Construction Ltd
"Regarding the 50% cut in grants: we don’t know what this means in real terms. This uncertainty has a huge effect on our client base as no one knows exactly what to do next. It’s a very uncertain market at the moment which isn’t helpful."
His main worry was that the government talked of devolving power to local councils "because the council will be losing jobs while being told to increase business opportunities and build houses – how is this going to work?"
Richard’s own company have already received some private capital and have begun work on private development.
Ian Selwood of Randall and Payne:
"One of the positive aspects for SME businesses will be the fact the government has changed the emphasis from building new schools, to maintaining existing ones, allowing smaller businesses more opportunities to tender for these contracts. Randall and Payne are working with the Chamber of Commerce to understand this initiative so they can help clients with the tendering process."
• School’s budgets largely protected
• Higher Education cut by 40%.
• Further Education for over 19s cut by 25%.
• More investment in adult apprenticeships.
Sylvia Bullock from Gloucestershire College
"Higher Education cuts will hit universities more than us. I think this will mean that more parents and young people will be looking at apprenticeships and alternatives to degrees. Certain industries, such as accounting, have great apprenticeship routes which could become more popular. Therefore, it’s fantastic news that there’s more money for adult apprenticeships. However, it’s no good training somebody for a job that isn’t going to be available.
We’ve been bracing ourselves for more cuts in Further Education, so it’s come as no surprise and we’ve already made some cuts and plans in this area. Similarly, the ending of the ‘Train to Gain’ scheme was no surprise: we knew that it had a life and that that life was limited. The nature of our business is constantly changing – you have to look at how you deal with everything and offer what’s best for business and for school leavers. Overall the message was better than expected - you've just got to look at the opportunities and how you can develop."
Ian Selwood of Randall and Payne:
"We’re aware of the local LEA shrinking and see possible opportunities for smaller businesses to provide training and IT support to schools in the area."
• £1 billion for a Green Investment Bank.
• Carbon capture and storage will receive up to £1 billion of public spending over the next four years.
• Low-carbon technologies and off-shore wind farms will receive £2 million of funds.
• £860 million of funding will be available for renewable heat incentives next April.
Sarah Daly from Heath Avery Architects
"We need more detail on how this Green Investment Bank is going to work. For example, if cash is available for green projects, how will this be accessed? Companies which are likely to want to access this funding will inevitably be new businesses and therefore are high risk for investment. How will this bank deal with the underwriting of this?
They’ve already started to look at alternative funding, for example through the Elena fund and the European Investment Bank. There are opportunities for wide-scale improvements across Gloucestershire as a county – we could put together a ‘county bid’ for a variety of projects which could employ a lot people for considerable time. The ideas we’re coming up with are quite audacious. We’re not waiting for the government – we can take ownership of a huge number of things and produce a much healthier, more vibrant economy for the county."
Ian Selwood of Randall and Payne:
"Gloucestershire and the southwest are renowned for their green principles and technology. This should enhance income for businesses which provide products and services in these areas. Randall and Payne can help with the financing of green projects, inform businesses of the grants available and help claim research and development tax credits."
Steve Barnett from Glevum Security
"The security industry hasn’t got away with the cuts because the Security Authority is going to be axed. This is supposed to be being replaced by government departments but no details have been announced on this yet. Unless a government department does step in, there will be no regulated authority to police the industry. This will put the industry back 10 years and will mean the return of self-regulation.
There may be opportunities to fill the gaps which open up because of public sector cuts, however, private security will not be able to fill the gap caused by cuts to police funding – we’re a private company providing security for events and businesses."
Ian Selwood of Randall and Payne:
"It’s good to see an increased spend in IT security as there is a strong concentration of these businesses in Gloucestershire."
Ian Mean, Chief Editor of Gloucestershire Media
"I thought the Spending Review event was absolutely excellent, in fact one of the best reactions from a good group of business people I’ve seen in a long time. I think we all were one in that we need to know more details. We don’t have the reply to the big question: How does this affect us in Gloucestershire?
There was no detail about how you get the funds from the £1 billion regional regeneration growth fund. We really need businesses to get together and get someone like Vince Cable down here to talk about how it’s going to affect the South West."
Ian Selwood of Randall and Payne:
"I agree with Ian’s idea to invite Vince Cable to Gloucestershire because there was so little detail in today’s announcements. It raised more questions today than it answered."
Summary from Ian Selwood of Randall and Payne:
"So many business owners were waiting for today’s announcements to give them the confidence to move forwards. At this stage, there was insufficient detail to achieve this. After the Emergency Budget back in June there was a sharp collapse in consumer and business confidence. There are obvious opportunities within the review, but we need the details in order to build confidence within the business community."
Our advice:
• Prepare a strategic business plan and review it on a regular basis.
• Tap into core Gloucestershire business networks - keep up to date with business opportunities and funding
• Keep a tight grip on spending and don't over stretch resources!
• Work to order - don't sit on stock that you can't sell!
• Use credit checking against new clients - you might think they are sound, but are they?
• Keep control, with better internal business information to help make sound decisions instead of guessing.
• Keep your bank manager informed about what's going on in the business.
• Seek new lines of credit before you need them, rather than leaving it to the last minute!
• Be prepared for more HMRC inspections after the announcement that they will be targeting tax avoidance schemes.
At Randall and Payne we can help you with all of the above action points.
For more information and a FREE 2 hour business planning session, call us on:
Stroud Office - 01453 763 471
Gloucester Office - 01452 723 377
Cheltenham Office - 01242 548 600
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