(Jane Hunt)
So what we need to focus on in my view is a V shaped recovery coming out of this. I have talked about this and gone on and on and on as my friends say to me about this over the summer, but I do think the potential is there. Talking to my small businesses in my area, large and small actually but mainly small businesses, they do see the potential, they do see that they can pivot and change and in fact many already have and are meeting the challenges that are coming ahead. But what I really need to know from you is any more from there. We have some eminent people on this call, I’d like to know what your people are saying in particular. Mine are wanting to get on, to get ahead, to make sense out of this terrible situation and terrible virus, to get to grips of the virus itself and then to be able to manage it. Because I think it will be a long-term thing and so that is what they have been talking about to me anyway.
(Jim Hubbard)
The sad reality is that firms will go bust and just, you know trying to sort of think about what could be, what steps could be taken to avoid that as much as possible, i.e. whether you need to look at, you know a more structured approach to repayment and measures like that. I suppose now we need to obviously stay focused on the crisis working closely with you know government at central, local, regional levels. Bringing business, you know leaders into the fold as well and ensure we strike a you know deal with the EU and these next couple of weeks as well.
(Mandip Rai)
In Leicestershire, we have 42,000 businesses predominantly SME’s and micros, so we are not overly reliant on a single employer or sector. I mean Saj can speak for D2N2, but we don’t have a Rolls Royce or a Toyota. But, we do have lots of SME’s in those supply chains so the impact of reductions in orders for those big companies and corporates does have that knock on effect. But the key areas that we are picking up from business surveys are the usual things that are set out in your report. There is the RND spend and the inability to spend what are low margins in innovation and working with the universities. Skills and digital skills have always been an issue and will continue to be an issue, certainly in some of the vulnerable sectors where we have seen huge swathes of young people being unemployed particularly in the retail and hospitality, and obviously Leicester has been in a longer lockdown. It has been locked down since March, so that has had a huge impact we have seen a growth in unemployment rates. Before lockdown we had less than 10,000 people on out of work benefits, we have got now over 40,000 on out of work benefits. So that’s a huge increase and the majority of that cohort are the 18-24-year olds. So that is going to present a huge challenge because young people will be even further from the labour market.
I think on the upside what we have seen is exponential growth in certain sectors. So, logistics being the main one and still continuing to grow. Life sciences in medical technologies. We have got quite a presence, particularly in Jane’s area around Loughborough and we have seen a lot of growth in that particular sector. So, I think there is light at the end of the tunnel. Given that we have got three universities in our area, which generates 17,000 graduates each year. And our focus is very much, well before the pandemic, was around productivity and focusing on those sectors that we have got major strength in so space technologies, engineering, automotive RND, life sciences, medical technologies and low carbon technologies. So, there is a huge opportunity and clearly with the Freeport proposal in the East Midlands which includes the airport, Ratcliff-on-Soar Power Station and Totum that presents a longer-term opportunity for the region as a whole.
(Sajeeda Rose)
I think from a D2N2 perspective covering Derbyshire and Nottinghamshire, looking at some of the early forecasts there is a projection that the East Midlands is one of the worst hit regions. We are projected to fall 10% of our GVA, which looks in real terms at a loss of about 5 billion in GVA on annual basis. Mandip’s already referred to the rise in unemployment and clearly at the moment with the effect of the JRS scheme, we are probably not at the bottom of what we expect the figures to look like. But again, the forecast looks to project at least an 11% unemployment across the region with peaks in certain cities such as Nottingham at about 17%. So clearly there is going to be significant impact and all of those issues that have been raised already in terms of transition to being ready for Brexit and uncertainty around different lockdowns. That does have an impact in terms of investor confidence and we have certainly seen that in terms of, perhaps restraint in some of the confidence around investment in certain productivity enhancing capital that you might have seen pre lockdown.
And the other sector within the East Midlands particularly in Derbyshire and around the Peak area is the visitor economy, and particularly given that, excuse me, the majority of those are smaller businesses and the new lockdown will be, the impact on those smaller visitor economy businesses, smaller retail businesses that is a concern. And the reality of some of those may not come back. And given that as an economy of 77,000 businesses, at least 19,000 of those are SME’s. So, there is a challenge about how we support those particularly looking at investment readiness, because whilst investment is available, some of those smaller firms do struggle to access finance. So, I think coming out, our view would be that certainty around support, certainty to instil confidence for investment, and I think a bit of really bolstering support for some of those SME’s that might struggle to access the support that is available.
(Chris White)
What I think is interesting about this whole period is that it has accelerated some of our thinking and the ways we do work. And I think the issue of pivoting has already come up and how we you know start thinking of our new sectors, in terms of life sciences, in terms of net zero and renewables, I think there are huge opportunities to pick up there. In terms of, I mean your organisation has been Lloyds has been very helpful in terms of the commission that we are in the process of delivering on the 2nd December, which is the Midlands Manufacturing Resilience Commission
(Louise Sunderland)
One of the challenges is this short term versus longer term, and actually the lack of kind of what do you do from an economic policy perspective. So, productivity has been mentioned, we have mentioned kind of V shape recovery. The fact actually we really need to drive recovery that is going to be better and gives business that opportunity. So, thinking about actually what the economic policy needs to be. And how we can actually start to shape that and understand actually we might need to be agile. And we have talked about this might be business as usual for a little while as well, so actually yeah you know, being able to plan a little bit around that. And have the agility which is not necessarily something that we're able to always do around policy agenda. And then we have also talked about tech option. We've proposed that actually there's an incentive given around actually tech and not just from taking tech, but actually supporting people on actually how to use it really well. So, how do you defuse it into the marketplace and make sure that it's taken onboard.
(Chris White)
In terms of our manufacturing, I think part of the problem has been sort of displayed this morning in terms of the huge number of different organisations and initiatives that business and manufacturing business have to navigate their way through to build and make sense of some of the funding, the grants, the relationships. Who they go to for which specific problem? I mean personally I would like to see, what I thought was a very good programme was the manufacturing advisory service, and I think that will be a super help if we could recreate something along those lines.
(Sajeeda Rose)
As LEPS you may have seen, that's part of the Government’s package of support, £900 million was made available through the getting building fund which all LEPS had quite a significant allocation. As D2N2, I think we are the 5th largest allocation of 44 million. Now that’s going to support quite a range of physical of infrastructure projects that will stimulate development and support jobs and supply chains within the region. Longer term however Mandeep referred to this earlier we are working collaboratively around the East Midlands airport Ratcliffe-on-soar site to put a bid in for the free port. And really appreciate that colleagues such as James support as MPs to get behind the initiative for the regions part of the whole levelling up agenda. We believe having a freeport within the region will act as stimulus and as a catalyst to bring in additional jobs which will then have induced economic effects for the rest of the region.
One of the areas that we have really been quite key, we would like to see happen but challenges around how we finance that is a bigger concern, we've heard quite a few times people mention that SMEs don’t know where to go, they don’t know how to act and support there is a plethora of support and we see that ourselves. So were working quite closely with the likes of the chamber, The CBI, FSB and others to join up our messaging but what would really help is a wraparound service like an account management service, so an SME can be signposted and supported to access skills support, finance support, growth support, survival support all in a once place approach so we have our growth hubs and they do a great job but there not resourced to be able to do that to that level so almost a growth and plus model and I am hoping Jane is going to take this back at some point but you know as a representative from government here, but I think enhancing the existing network around growth that work with the chambers and FSB and CBI very closely to enhance that support businesses.
(Mandip Rai)
In terms of national policies around job retention and then the kick start scheme, certainly that’s something we certainly support, we’re repurposing some of our growing places fund to extend the placements from 6 months up to 12 months. So, working closely with the county and city councils and the district council to ensure that there is an extension to the kick start scheme at a local level. And then there’s the investment, the general investment in further education infrastructure, which is very welcome obviously, there’ 1.5 billion that was promised. Some of that funding has already been made available to FE colleges but talking to the principals here locally I think that there’s a dire need for that investment to be accelerated from a national perspective.
Now the other thing is around the national industrial strategy refresh early in the new year and the focus on science technology innovation for long term growth and green recovery, those are the two areas I think that are huge opportunities for the nation.
(Jane Hunt)
I think in terms of social mobility as well not just from a business point of view but actually about enabling people to move on in life and to get on. So, I talked to the employment minster only yesterday about the ABC so any job, better job career, and that’s what we need to get people moving up the scale and enabling them to be able to look after themselves and their families. So yep, talking about the kickstart scheme that we’ve done so far, the apprenticeship scheme and the traineeship scheme before that all kind of fit in place a bit like a jigsaw puzzle if you like so people can slot into their various different areas. In Loughborough, part of our town deal fund, we made a bid for 32 million pounds which will bring in 110 million pounds hopefully of investment into the town but we’ve had a chunk of money upfront, 750,000 pounds, some of that we’ve used to set up a careers and skills hub in the centre of town because there are many people, hard to reach people that don’t necessarily think I'll go and have a look at the college, I'll go and look at the college or go to the website or any of those kinds of things but they might be in town, they’ll get to see what’s going on and the opportunities that are available and it will be much closer and better connectivity between people who need skills and the ones that can deliver it so that’s literally going to be opposite McDonald’s in the centre of Loughborough, it couldn’t be closer to the centre and that is going to be a joint deal with Loughborough college and the university but its talking, it's really getting to understand the skills and the things that people need and what the businesses need in the area as well and matching the two.
(Jim Hubbard)
I will just leave with the fact that if we help small business' overcome the barriers to training investment, we can you know, there is a huge amount of opportunity that would come from that so you could look to for instance, which I think Louise may have mentioned to you earlier, in today's conversation, eventually it will be seen that SME tax credits for instance.
