News Archive - August 2013
More than half of SMEs expecting growth - 29.8.2013
Small business confidence is at an all-time high, with more than half (51 per cent) of SMEs looking to grow their business in the next 12 months, according to findings from the BDRC Continental Finance Monitor for SME lending.
However, BDRC Continental voiced concerns that the banking industry could potentially 'put a break on growth' rather than providing the necessary funds to support SMEs.
It found that traditional banking products such as loans, overdrafts and commercial mortgages are being used by only one in three SMEs, continuing the downward trend witnessed over the past two years.
Credit cards were the only traditional form of financing to increase in use but this was to provide assistance with cash flow issues, as opposed to funding long-term growth.
One in five SMEs are turning to external finance sources - including friends and family - to support their growth plans.
Other key findings from the BDRC Continental report include:
- business sentiment in Q2 2013 is at the highest level since the report's inception
- a three per cent increase in the number of SMEs using lease and hire purchase - up from six per cent to nine per cent and the highest proportion since the report began
- one in five business owners using personal funds to finance their business
The Forum of Private Business (FPB) said the data was a 'sure sign that businesses recovery is finally underway.'
Chief executive of the FPB, Phil Orford, said: "This latest data further highlights the urgent need for the banks to lend to businesses looking to grow and employ. Without further support for Britain's SMEs, a key driving force behind the economy, the recovery could stall before it has been given a chance to take hold."
"Businesses need to have access to more information about the current finance support schemes, more comprehensive advice on the alternatives available and easier access to the appeals process when an application fails."
However, BDRC Continental voiced concerns that the banking industry could potentially 'put a break on growth' rather than providing the necessary funds to support SMEs.
It found that traditional banking products such as loans, overdrafts and commercial mortgages are being used by only one in three SMEs, continuing the downward trend witnessed over the past two years.
Credit cards were the only traditional form of financing to increase in use but this was to provide assistance with cash flow issues, as opposed to funding long-term growth.
One in five SMEs are turning to external finance sources - including friends and family - to support their growth plans.
Other key findings from the BDRC Continental report include:
- business sentiment in Q2 2013 is at the highest level since the report's inception
- a three per cent increase in the number of SMEs using lease and hire purchase - up from six per cent to nine per cent and the highest proportion since the report began
- one in five business owners using personal funds to finance their business
The Forum of Private Business (FPB) said the data was a 'sure sign that businesses recovery is finally underway.'
Chief executive of the FPB, Phil Orford, said: "This latest data further highlights the urgent need for the banks to lend to businesses looking to grow and employ. Without further support for Britain's SMEs, a key driving force behind the economy, the recovery could stall before it has been given a chance to take hold."
"Businesses need to have access to more information about the current finance support schemes, more comprehensive advice on the alternatives available and easier access to the appeals process when an application fails."
School-leavers need better workplace skills, say business groups - 21.8.2013
Young people in the UK are leaving school unprepared for employment and the workplace, business groups have said.
Recent research by the Federation of Small Businesses (FSB) found that half of small firms believe young people are leaving school with a poor attitude to work and without key employment skills such as problem solving.
Lack of basic numeracy and literacy skills were also a concern for small employers.
Some business groups are arguing that GCSE examinations need to be overhauled in order to improve the skills and employability of students. The comments follow a recent Government consultation into GCSE reforms and this month's A-level results.
The FSB said it was vital that any changes to the current examination system did not 'focus on grades alone.' "Employers need the staff of the future to have much wider skills, such as communication, problem solving and a good attitude to work," it said.
Commenting on the recent A-level results, the British Chambers of Commerce's employment and skills adviser, John Wastnage, said: "It should of course be celebrated that academic achievement amongst school-leavers has remained high. However youth unemployment has risen in recent months and it is clear that there are far too many young people whose potential is being undermined because they have not been taught the broader skills required to succeed in the workplace - despite the strong desire of employers to hire and train them."
Elsewhere, a recent survey by the Confederation of British Industry (CBI) found that a shortage in workplace skills could hold back the UK from long-term growth and damage the country's competitiveness.
Speaking in June, the CBI's director-general, John Cridland, said: "We're facing a critical lack of skills in some key industries, just as the economy starts to pick up. Long-term, sustainable growth will come in part from rebalancing towards high-value products and services, which demand much better technical skills."
"We need to boost our skills base urgently before the UK loses more ground."
Recent research by the Federation of Small Businesses (FSB) found that half of small firms believe young people are leaving school with a poor attitude to work and without key employment skills such as problem solving.
Lack of basic numeracy and literacy skills were also a concern for small employers.
Some business groups are arguing that GCSE examinations need to be overhauled in order to improve the skills and employability of students. The comments follow a recent Government consultation into GCSE reforms and this month's A-level results.
The FSB said it was vital that any changes to the current examination system did not 'focus on grades alone.' "Employers need the staff of the future to have much wider skills, such as communication, problem solving and a good attitude to work," it said.
Commenting on the recent A-level results, the British Chambers of Commerce's employment and skills adviser, John Wastnage, said: "It should of course be celebrated that academic achievement amongst school-leavers has remained high. However youth unemployment has risen in recent months and it is clear that there are far too many young people whose potential is being undermined because they have not been taught the broader skills required to succeed in the workplace - despite the strong desire of employers to hire and train them."
Elsewhere, a recent survey by the Confederation of British Industry (CBI) found that a shortage in workplace skills could hold back the UK from long-term growth and damage the country's competitiveness.
Speaking in June, the CBI's director-general, John Cridland, said: "We're facing a critical lack of skills in some key industries, just as the economy starts to pick up. Long-term, sustainable growth will come in part from rebalancing towards high-value products and services, which demand much better technical skills."
"We need to boost our skills base urgently before the UK loses more ground."
Home businesses number 2.5 million - 14.8.2013
Small business owners operating from home now number 2.5 million in the UK, accounting for 52 per cent of all small businesses, according to Direct Line for Business (DL4B).
DL4B's analysis of Office for National Statistics data revealed that:
- home business owners account for eight per cent of the total UK workforce
- men are more than twice as likely than women to run a business from home
- there are 432,742 home workers in the south east of England, compared with 68,160 in the north east
- more than a quarter (27 per cent) of all workers in Herefordshire are home business owners
DL4B's research found that, when starting out, home business owners tend to prioritise operational tasks over issues such as arranging their tax and insurance affairs. DL4B said this was 'particularly concerning' given that almost three quarters of all home businesses keep stock - worth an average £4,388 - at home.
Jazz Gakhal, head of DL4B, said: "We urge anyone looking to operate as a business from home to organise home business insurance from the start. The potential emotional and financial loss from an accident or theft could be devastating. For example, stock stored at home may not be covered by a standard home insurance policy and neither will cover public liability or loss of
earnings due to an insurable event."
DL4B's analysis of Office for National Statistics data revealed that:
- home business owners account for eight per cent of the total UK workforce
- men are more than twice as likely than women to run a business from home
- there are 432,742 home workers in the south east of England, compared with 68,160 in the north east
- more than a quarter (27 per cent) of all workers in Herefordshire are home business owners
DL4B's research found that, when starting out, home business owners tend to prioritise operational tasks over issues such as arranging their tax and insurance affairs. DL4B said this was 'particularly concerning' given that almost three quarters of all home businesses keep stock - worth an average £4,388 - at home.
Jazz Gakhal, head of DL4B, said: "We urge anyone looking to operate as a business from home to organise home business insurance from the start. The potential emotional and financial loss from an accident or theft could be devastating. For example, stock stored at home may not be covered by a standard home insurance policy and neither will cover public liability or loss of
earnings due to an insurable event."
Carney sets out new BoE monetary regime - 8.8.2013
The Bank of England will keep interest rates at the current level of 0.5 per cent at least until UK unemployment falls below seven per cent, the Bank of England's governor Mark Carney has said.
Speaking at his first news conference as governor, Carney laid out the Bank's new forward-guidance monetary regime, which will give advance indications of future policy decisions.
Carney's announcement coincided with the Bank's upward revision of UK growth forecasts from 1.2 per cent to 1.4 per cent this year, and from 1.7 per cent to 2.5 per cent in 2014.
Unemployment in the UK is currently at 7.8 per cent and many economists think it's unlikely to fall to seven per cent until 2016.
Although the Bank's Monetary Policy Committee (MPC) voted to maintain the official bank rate at 0.5 per cent and its quantitative easing programme at £375 billion, Carney said that the Bank was willing to undertake further monetary stimulus while unemployment remained above the seven per cent mark.
Key announcements include:
- CPI inflation is likely to remain at least 0.5 per cent above the Bank's two per cent target over the next 18 to 24 months
- inflation in the medium-term will 'no longer be sufficiently well anchored'.
Speaking to the BBC, Marc Carney said that keeping bank interest rates low will likely boost the UK economy by 'more than half a percentage point.'
Speaking at his first news conference as governor, Carney laid out the Bank's new forward-guidance monetary regime, which will give advance indications of future policy decisions.
Carney's announcement coincided with the Bank's upward revision of UK growth forecasts from 1.2 per cent to 1.4 per cent this year, and from 1.7 per cent to 2.5 per cent in 2014.
Unemployment in the UK is currently at 7.8 per cent and many economists think it's unlikely to fall to seven per cent until 2016.
Although the Bank's Monetary Policy Committee (MPC) voted to maintain the official bank rate at 0.5 per cent and its quantitative easing programme at £375 billion, Carney said that the Bank was willing to undertake further monetary stimulus while unemployment remained above the seven per cent mark.
Key announcements include:
- CPI inflation is likely to remain at least 0.5 per cent above the Bank's two per cent target over the next 18 to 24 months
- inflation in the medium-term will 'no longer be sufficiently well anchored'.
Speaking to the BBC, Marc Carney said that keeping bank interest rates low will likely boost the UK economy by 'more than half a percentage point.'
New planning rules put 'town centres first' - 7.8.2013
An extension of planning and development regulations to make better use of empty buildings will revitalise UK high streets and rural towns, the Department for Communities and Local Government has said.
Its new 'Town Centre First' planning rules will cut red tape and make it easier for developers and businesses to bring empty or underused buildings 'back to life', it said.
It is hoped that doing so will help increase footfall and spending on the high street.
The proposals would also allow the transformation of agricultural buildings or empty premises in rural areas into homes, nurseries and free schools.
The proposals currently up for consultation focus on allowing conversions from:
- Retail to residential properties - to provide more affordable housing
- Retail to banks and building societies - more branches and choice for consumers
- Agricultural to residential - the transformation of disused barns, for example, into affordable housing
- Agricultural to schools and nurseries - better support for working parents in rural communities
- Commercial to nurseries - converting offices and hotels to meet childcare provision.
Planning minister Nick Boles said: "Thousands of empty and underused buildings, often on the edge of town centres, are going to waste because people do not want the hassle and uncertainty of submitting a planning application."
"Removing this barrier will bring more people closer to their town centres, providing a much needed boost to local shops and ensuring we make the most of buildings that are already there for new homes, nurseries and schools this country needs."
The consultation on this topic closes on 15 October 2013.
Its new 'Town Centre First' planning rules will cut red tape and make it easier for developers and businesses to bring empty or underused buildings 'back to life', it said.
It is hoped that doing so will help increase footfall and spending on the high street.
The proposals would also allow the transformation of agricultural buildings or empty premises in rural areas into homes, nurseries and free schools.
The proposals currently up for consultation focus on allowing conversions from:
- Retail to residential properties - to provide more affordable housing
- Retail to banks and building societies - more branches and choice for consumers
- Agricultural to residential - the transformation of disused barns, for example, into affordable housing
- Agricultural to schools and nurseries - better support for working parents in rural communities
- Commercial to nurseries - converting offices and hotels to meet childcare provision.
Planning minister Nick Boles said: "Thousands of empty and underused buildings, often on the edge of town centres, are going to waste because people do not want the hassle and uncertainty of submitting a planning application."
"Removing this barrier will bring more people closer to their town centres, providing a much needed boost to local shops and ensuring we make the most of buildings that are already there for new homes, nurseries and schools this country needs."
The consultation on this topic closes on 15 October 2013.
