‘WE ARE IN BUSINESS TO MANUFACTURE FUN’ DAVID CAM ON LIFE AT THE PLEASURE BEACH IN THE BL INTERVIEW ARE THE AUSTERITY MEASURES GOOD OR www.mooreandsmalley.co.uk BAD NEWS? EMERGING SECTORS WHAT NEXT FOR PRESTON? HR ADVICE JIM HANCOCK WRITES TAX AND VAT ADVICE ISSUED IN AUTUMN 2010 2 welcome bottomline Autumn 2010 Welcome W elcome to our latest edition of If the country is to emerge from the Cover Story: David Cam, Blackpool Bottom Line, which aims to current uncertainty, powerful growth Pleasure Beach. deliver a spectrum of insightful sectors are needed to drive the resurgence, and informative views on the commercial and on pages 15 and 16 three of our 2 Welcome landscape that affects us all in various ways. specialist advisors – Ginni Cooper, Rachel It is a landscape that is undergoing Marsdin and Andrew Norman – identify 3 News Award double radical and far-reaching change since our the industries they believe will be key to a The big issue Austerity measures previous, pre-election edition. With a raft of full and sustainable recovery. good or bad? austerity measures announced by the Elsewhere in Bottom Line, you will find coalition government, the public sector, and a lively debate on the future of Preston on 4 The tax man NIC holiday its many private sector contractors, is pages 10 and 11, as well as expert opinion 6 What’s your problem? bracing itself for the impact. on a range of business improving measures, Staff morale Of course there is a strong argument inspiring success stories from around our that swingeing and immediate economies region, and news from our business. I do 7 The dealmaker’s view are vital if the budget deficit is to be tackled hope you enjoy the read. Slowly but surely and market confidence restored in ‘UK plc’. Just as importantly, opportunities will 8 The bl interview David Cam emerge from the post-election environment and it will be down to sharp-eyed 9 One to watch VVB entrepreneurs and their advisors to identify 10 The Moore and Smalley debate and develop these. Regenerating Preston Having said that, we can’t escape the conclusion that the government’s fiscal 14 Recovery special UK growth medicine will produce some painful side- effects. In our part of the world we are 16 VAT 20 per cent VAT health check already seeing a list of projects affected by 17 Food for thought the Northwest Regional Development Agency’s (NWDA’s) drastic funding cuts. 20 Smalley talk Firm news Among them is the Preston Vision initiative, which aims to transform Preston into a competitive European city, while a significant question mark hangs over the future of Business Link. Substantial changes to tax and VAT regimes will certainly have profound implications for most businesses. As ever, timing is crucial where tax changes are concerned, and the importance of seeking professional advice on your tax affairs cannot be overstated. On page four of this issue, our own tax expert David Bennett writes about the government’s three-year national insurance David Ingram contribution (NIC) holiday. Managing partner ‘opportunities will emerge from the post-election environment’ news 3 Moore and Smalley award double F ollowing on from spring’s treble award won a £2,000 donation to the charity. win at the Lancashire Dealmakers’ Meanwhile, two of Moore and Smalley’s Awards, Moore and Smalley has rising stars have proved themselves to be scooped two further high profile business among the best in the business after winning gongs. the final of a national skills competition. Anne Metcalf, a corporate and charity Ben Drury and Katie Walch, trainee manager at Moore and Smalley – and wife of accountants based at the firm’s Blackpool former firm partner Peter Metcalf – has won office, represented Blackpool and the Fylde a prestigious Everybody Counts Award from College in the national final of the AAT the Institute of Chartered Accountants in (Association of Accounting Technicians) England and Wales (ICAEW). Accounting WorldSkills UK Competition, The award was in recognition of her in London. work as a volunteer for Gift ‘92, a Ben, 23, from Blackpool, and Katie, 21, Preston-based charity which collects from Thornton – both of whom study at the unwanted furniture and donates it to college – triumphed over eleven other disadvantaged people. finalists from the UK’s leading colleges and Anne, a trustee and treasurer, was businesses by performing a number of commended for helping to raise more than financial accounting, ledger and report tasks £25,000 over the past 12 months. She also with the greatest accuracy and teamwork. Ben Drury and Katie Walch the big issue Are the austerity measures good or bad news for the economy? Michael Richard Ben Briggs, Gibson, Bamford, Joe Bowe, Editor, Managing Executive Finance Lancashire Director, Fat Chairman, EV Manager, Business Media Ltd Group Lakes Leisure View The cuts will be bad for the Overall, in the long term, they Overall they are good if we The real issue with the austerity economy. The reductions in are good news. We must get back reduce inefficiency. We have measures is how harsh they end growth forecasts prove that, and to a pre-2008 benign economy, lived beyond our means for too up being. The danger many private sector businesses when we had steady growth and long, but there will be immense is that if they are too harsh the that rely wholly on the public controlled inflation. It is pain for individuals and some public sector will no longer be sector are going to the wall with imperative that investors view businesses like Lakes Leisure able to stimulate the economy many others badly hit. The the UK as a stable growth which are reliant on funding. and the fragile private sector worst will be revealed in October economy. However, if over There is however a danger that may be unable to make up the in the Public Spending Review borrowed in uncertain times, consumer confidence will be shortfall. While many agree and will be felt in 2011. My fear it is imperative to reduce debt. depressed for a long time. that cuts are needed, the is this is too much, too quick For the immediate future, this Measures like the increase in government needs to strike and poorly planned, and the means belt tightening for most, VAT will hurt a lot. The recovery a careful balancing act in impact will be far worse. real difficulties for some, but will be slow. Business managers order to maintain fledgling also opportunities. will need to be innovative. economic hope. 4 the tax man David Bennett Tax partner NIC holiday brings welcome 01772 821021 email@example.com relief for businesses By David Bennett, tax partner T he government’s three-year national insurance contribution (NIC) holiday ‘There are also restrictions on businesses, is welcome news for new business start-ups across the North West and such as agriculture and fisheries’ East Midlands. The scheme means that new businesses engaging in fresh economic activity will enjoy a NIC holiday for the first ten employees they recruit in the first twelve months of business. An NIC exemption will apply to the salaries paid to those employees in the first twelve months of their employment. For example, if a new business starts in October 2010 and recruits five employees in October and five more in December, the NIC holiday will apply to all the employees. However, if one employee leaves in January and is immediately replaced by employee number eleven, the NIC will not apply to the replacement, as the limit of ten employees will have already been exceeded. The scheme is open to businesses that began trading on or after June 22, 2010, and applies to salaries paid after September 6. It applies to businesses trading in the North West and East Midlands, as well as other UK regions outside London, the South East and East Anglia. The government has imposed a cap, which means the maximum amount of NIC savings a company can make is £5,000 per employee. It should be emphasised that the scheme relates to employers’ class 1 NIC and not employees’ NIC or NIC on benefits in kind. HM Revenue and Customs (HMRC) has companies and personal service companies, As ever, it is important to ensure that all made it clear that the holiday scheme applies should qualify. the documentation is in order because only to new economic activity. Hence, it will The employment of domestic employees, HMRC will take an exacting approach to not apply to the purchase of a business from such as gardeners, nannies, cooks and carers, ensure companies have complied with the a third party or the incorporation of an does not count as a business, and therefore rules. On a practical level this will involve existing business that is currently carried on does not qualify for the NIC holiday. inspectors looking at documentary evidence as a partnership or sole trader. In order to obtain the benefit of the NIC during PAYE visits. There are also restrictions on businesses, holiday, a claim must be made to HMRC. Nonetheless, the NIC holiday scheme – such as agriculture and fisheries, which have Once HMRC has agreed the claim, which operates from 2010 to 2013 – received state aid. Such businesses may have employers will calculate the PAYE and represents much-needed relief for the broad reduced entitlements, depending on the NIC as normal, but will deduct the NIC range of businesses that do qualify. state aid already received. Most other holiday from the monthly or quarterly businesses, including property investment sum paid to HMRC. 6 what’s your problem? Tina Clayton HR consultant and employer services manager Top tips for improving staff 01772 821021 firstname.lastname@example.org morale during tough times M any businesses have gone through, (generally your most talented employees) 4. Be flexible and open to ideas: Ask or are still experiencing, a period of and stress. Be honest and be honest staff what motivates them. Be specific, an job cuts and those more fortunate frequently! open-ended question such as “what are perhaps at best looking at pay increases motivates you?” may be met with a blank 2. Review benefits: Consider if you are of less than one per cent in the short term. stare. Instead ask employees to rate providing any benefits in the most tax In these difficult economic conditions, different aspects of their job, such as efficient manner for both the business businesses will be only too aware that the teamwork, variety and autonomy, and and the employee. The implementation of motivation of their workforce can suffer. If concentrate your efforts on what they rate a salary sacrifice scheme can provide an organisation is to survive in these times it highly – listen to what they say and significant savings, for example, with is vital to engage people and bolster morale. provide feedback. Remember money is pension contributions and childcare Without the commitment of staff, a business only one piece of the jigsaw. vouchers. Other options provide stands little chance of recovering quickly. increased flexibility and work/life balance 5. Empower staff: Sharing issues with So what measures may help? opportunities, such as the option to buy your staff and encouraging them to 1. Communication: Keep your staff or sell holidays. provide solutions can be motivating and up-to-date with how the business is encourages ownership over any changes 3. Review remuneration: In the absence performing; help them to understand the that may be required. of any pay increase, consider a pressures facing the business and the part discretionary bonus scheme based on 6. Celebrate success and effort: When they can play in supporting you through financial performance. This gives your times are difficult it is very easy to focus difficult times. Failing to communicate staff the opportunity to earn additional on things that are not working and not effectively with your staff can promote pay while managing your risk efficiently – see the good work being done by staff. rumours and unnecessary insecurities only keep it simple. Recognising good work, and giving praise which in turn creates staff turnover where due, costs the business nothing. ‘Sharing issues with your staff and encouraging them to provide solutions can be motivating’ the dealmaker’s view 7 Slowly but surely Rob Kenmare Corporate finance partner 01772 821021 email@example.com By Rob Kenmare, corporate finance partner C autiously optimistic. That’s a phrase I have heard a lot over the last few ‘We are actually experiencing some degree of weeks and from a number of sources: business owners; bankers and other competition from the banks at the moment’ advisors. And it would appear that the financial and economic data support this with better than anticipated Q2 growth figures, improving retail data in July and August, and a recent slew of strong corporate results. We, in Moore and Smalley’s corporate finance team, have also seen a number of positive signs over the last quarter – deal activity is picking up and we have an increasing number of clients seeking to raise funds for new projects; the confidence and momentum in deals is increasing slowly but surely; and the number of new enquiries is increasing all the time. Having said that, we still face some significant issues before we can remove the ‘cautious’ tag. The two most current are the continuing challenge of funding and the impending government spending review. The funding picture does seem to have improved lately. We have had some notable successes for our clients and are actually experiencing some degree of competition from the banks at the moment. The proviso to this is that it is only occurring where the companies in question meet the banks’ criteria for lending, and, to my mind, it is this issue that is fuelling the debate between the banks, business and government as to whether the perceived lack of bank funding is a supply or demand issue. Our current experience is that there is no shortage of demand from companies, investors and developers for debt funding and there are banks who want to provide debt. The issue is the difference between of the borrower as a result of improved differences set out at the general election the borrowing requirement and the banks’ earnings or profits. than on any facts and knowledge in the current lending criteria. It is possible that The other issue everyone has an opinion public domain. The full substance of the there can be both sufficient demand and on is the impact of the upcoming ‘austerity’ spending review will have to be digested supply but severely restricted borrowing measures on the ongoing recovery. Nobody when it is released. What nobody knows for or lending. The situation can only be seems to disagree on the need to tackle the certain is how much ‘fat’ has been built up in resolved in two ways, either a relaxing of public deficit, but there are differing views the public sector as a result of over a decade the banks’ lending criteria, which is unlikely on the timing and nature of the deficit of growth. This will be the key determinant to happen in a hurry, given the overhang reduction measures. At the moment the of the impact of any proposed cuts on the from property lending at the height of the majority of the debate is being fuelled by the economy as a whole. boom, or an increase in the cash or equity political parties based more on policy 8 the bl interview Labour of love at the fun factory After more than a quarter of a century as company secretary at Blackpool’s world-famous Pleasure Beach, David Cam believes life is so good that he still has to pinch himself. “I ’m a very lucky man. We are in enjoyed every minute, but I resumed my attraction – a process that culminated in business to manufacture fun and it’s studies with every intention of becoming a 1994 when The Big One became the world’s intensely gratifying to look through barrister in Manchester, specialising in fastest, tallest rollercoaster.” my office window across the Pleasure Beach planning law. Then Geoffrey contacted me David continues to contribute and see our end-product: people having the again. He needed a legally qualified assistant passionately to the Pleasure Beach’s time of their lives,” said David. company secretary and offered me the job. successful business model of mixing high- His wide-ranging remit means he is He suggested my first assignment would be tech attractions, such as the digitally involved in all aspects of managing the visiting the USA to learn the trade the operated Infusion rollercoaster, with Pleasure Beach, from health and safety, American way, and I didn’t think twice about traditional rides including Hiram Maxim’s and legal issues to property and personnel – accepting the offer.” ‘Original Captive Flying Machines’, built in not to mention responsibilities for A few days after his last exam David 1904 and still as popular as ever. external relations. found himself working for a season at an David and the team are currently David attended St Joseph’s College in entertainments park in Denver, Colorado, working on the introduction of the £10m Blackpool and began working at the Pleasure before embarking on a three month, 20,000- Nickelodeonland family theme park, which Beach aged 16, selling hot dogs and burgers. mile, 23-state tour of US amusement parks. will open in April and is expected to boost He also worked as a conductor on Blackpool “Geoffrey Thompson’s maxim was visitor numbers by 30 per cent. trams before securing his degree in law. ‘constant dynamism and change’ and when I Looking ahead, David is unreservedly “After I graduated I needed a job for 12 returned from the USA I joined a team that optimistic. “We have quality infrastructure, a months before I was due to start my Bar put this into practice,” said David. “There well-established brand, fabulous shows and Finals and I became personal assistant to were lots of ideas but the problem was Thompson family shareholders who Geoffrey Thompson, then the managing finding the time to implement them. continue to invest heavily in keeping director of the Pleasure Beach,” said David. Between 1980 and 1995 we went from being everything exciting and fresh. All this makes “It was a fantastic experience and I a regional attraction to a world-class for a very bright future.” one to watch 9 VVB targets growth as energy sector heats up In the latest of our one to watch series, Bottom Line profiles a leading company with analysis from award-winning Moore and Smalley partner and SME specialist, Damian Walmsley. W hen mechanical and electrical engineering specialist Steve Hinde decided to go self-employed in 1991, it was the start of a journey that would lead to a £30million turnover business with 400 employees. In those early days, working as a one- man operation, Steve was hired to manage the mechanical and electrical engineering works on some of the UK’s most high-profile construction projects. These included work to extend the Faslane naval base in Scotland to accommodate the Trident nuclear submarine system, work on the Sellafield nuclear power station in Cumbria, and the extension of the Jubilee Line on the London Underground. Steve Hinde of VVB. The company is currently working on the £370m Hindhead Tunnel project in Surrey, due Then in the early 90s when there was a for completion in 2011 (pictured above) trend for large companies to outsource their mechanical and electrical work, rather Steve said: “Our expertise at the heavy a decade spent working at Heysham nuclear than retaining an in-house division, Steve end of civil engineering has set us apart from power station in the 1980s. began tendering for these contracts some of our rivals. We have worked hard Steve added: “It’s clear there’s going to himself, employing his own people to to develop specialisms, such as the work be many construction projects in the energy undertake the work. we have done on tunnelling and other sector over the next few years, whether it’s Steve’s business, VVB, has grown heavy transportation projects. We are EfW, nuclear, or other forms of renewable significantly over the last two decades, continually looking to develop our expertise energy. We are already enhancing our and now works for some of the world’s and there are new sectors opening up that knowledge and expertise in this area and see biggest civil engineering groups on projects we are targeting for growth, while looking it as a major growth sector alongside our in the rail, road, construction and to further opportunities in the rail and existing work.” infrastructure sectors. airport sectors.” Damian Walmsley added: “Steve has The company developed a particular Steve sees the energy sector as the major worked tremendously hard over the last specialism for mechanical and electrical growth area for Essex-based VVB as the UK 20 years to build the business up from installation work on tunnel projects, such as looks for solutions to its double headache of scratch and a lot of that success has been lighting, power, ventilation and control what to do with landfill waste and how it will down to the way the company has developed systems for the East India Dock Road, M25 meet future energy requirements. a niche in the heavy transport and Holmesdale and Bell Common Tunnels in VVB is already doing work on a new construction sectors. London, and is making substantial progress Energy from Waste (EfW) plant in “It’s great to see that VVB continues to on the total refurbishment of the Blackwall Belvedere, Kent, which will be the biggest of thrive and pursue new opportunities, and I Tunnel Northbound Bore. its kind in the country, taking two-thirds of predict another successful period of growth VVB’s specialist skills have earned it London’s rubbish. for the company.” respect from customers and international The company is also looking for new www.vvb-eng.com engineering group Costain recently opportunities in the nuclear sector, an awarded the company a supply chain industry that Steve, originally from excellence award. Morecambe, is familiar with after more than Where next? the moore and smalley debate 11 News that public sector funding cuts at the Northwest Regional Development Agency (NWDA) would impact on major investment projects planned for Preston was another setback for the city’s regeneration aspirations. A s the region braces for further cuts as Frank McKenna: Preston has to assert Nick Lancaster: a result of the Comprehensive itself as the economic driver for the whole of One of Preston’s Spending Review, Bottom Line spoke the Red Rose County. The work undertaken strengths is to business and regeneration leaders, and by Preston Vision will help enormously in undoubtedly the some proud Prestonians, to ask where the this regard, as will the efforts the city council number of skilled city goes from here. is making to genuinely engage with the and motivated private sector. Importantly, there needs to graduates that have The panel comprised: Eliot Ward, chief be an acceptance from neighbouring an affinity to Preston executive, Preston Vision; David Taylor, boroughs that Preston is the most relevant and want to live, executive chairman, David Taylor focal point for the economic regeneration of work and start Partnerships; Dr Nick Lancaster, head of the entire sub region. businesses in the UCLan Corporate; Frank McKenna, region. Opportunities need to be provided chairman, Downtown Preston in Business; David Taylor: for our graduates to flourish. David Wade Smith, chairman, Despite the cutbacks Livesmart Ltd; Tracey Johnson, corporate in public funding Mick Goode: In terms of the physical services director, Moore and Smalley; Preston still enjoys regeneration, there are still a number of Mick Goode, director, Croft Goode many benefits in smaller, shorter-term opportunities for Architects; David Coates, business editor, terms of its location development that collectively can still Lancashire Evening Post. and infrastructure represent meaningful economic regeneration which should give its potential. The city also has to have a long- Here are the panel’s opinions. local industries a term strategic approach addressing a greater competitive edge. number of issues than those within the The funding cuts are clearly a The public and Tithebarn area. Advancing proposals for blow for Preston and for private sectors will need to work much more more deliverable opportunities elsewhere in Lancashire thanks to the city’s closely together to maximise the combined the city will serve as a catalyst for economic important role in the regional impact of the partnership approach. growth and confidence. economy. How will Preston Tracey Johnson: Growing the private bounce back? What should the city’s political sector will be a key priority over the next and private sector leaders be decade. In the last 10 years, Preston has Eliot Ward: These been among the top performing cities in doing in the short term and long announcements have terms of its percentage increase in private term to secure the future of such sharpened the public sector jobs. This is extremely encouraging large-scale projects? sector’s focus on and is a good platform to build upon. Its how it can best David Wade Smith: Now more than location close to the motorway network, a attract the major ever there is a need for the public and fast rail link to London, and a thriving private investment private sector to open a dialogue through a university also give it an important necessary to develop series of meetings and forums. Speaking competitive advantage and this needs to be Preston’s physical from my experience of Liverpool’s marketed effectively. and economic renaissance, the public sector has to offering. In addition convince business leaders of what can to ensuring planning and development be achieved if they work together. The frameworks are in place, consideration is message has got be talk, talk, talk. needed on how to attract private investment earlier to take the place of pump-priming public money which is now scarce. This is ‘Preston has to assert itself as the economic driver for the whole of the Red Rose County’ likely to be reflected in higher investor returns being required to reflect their greater up front risk. Frank McKenna 12 the moore and smalley debate Eliot Ward: There needs to be a greater level of cooperation and joint working than ‘The potential is boundless. In 20 years time, ever before. Promotion of the opportunities we should have one of Britain’s biggest and best universities producing students that want in the city is also important. If done to stay and work in our city’s thriving effectively, it will attract more private sector interest. Preston Vision is currently leading on a visioning exercise which is also professional services industry’ identifying a set of strategic goals for the city which all sectors of the community will David Coates share and own. Our assets need to be harnessed, including the creativity of the front relationship with its businesses. Mick Goode: Bids for public funds will be local population. Businesses have never expected a free ride, better placed if they demonstrate both added Frank McKenna: but with a little bit of give and take on both AND best value. Both the city and county There is a greater sides, a lot can be achieved. councils have portfolios of land that could be willingness than ever introduced into potential development from both the public Where will funding come schemes at ‘nil value’ thus removing and private sectors from now? For instance, expensive land acquisition costs from to work in should the private sector be scheme costings. Preston City Council and Lancashire County Council could factor such partnership, and stepping up to the plate or only by doing this land portfolio opportunities into their own should we be looking towards plans for capital spending on new projects, can we demonstrate to potential inward Europe for funding? as well as working in partnership with investors that we private businesses in an attempt to attract Tracey Johnson: are serious about developing a new available funds. European funding economy in Preston and Lancashire. will become even David Wade We need to modernise our governance more important as Smith: I believe structures to ensure more inclusivity of UK sources of public we’ve got to replace the business community. funding reduce. The the word ‘grant’ with challenge will be to the word David Taylor: The city should create its ensure available ‘investment’. The own ‘asset-backed’ development company. funding from Europe question has to be There is still a legacy of physical assets from is effectively ‘how can we get the New Town Development Corporation administered and for people to invest in and we should use these to gear up private applicants to raise the match funding this city?’, not ‘what investment. required. This is likely to mean an increased money can we get Mick Goode: reliance on the private sector, banks and from Europe?’. That’s why we have to project Places that can other investors to provide the shortfall. Preston as a great place to do business, as a respond quickly to place that’s fit for purpose, and as a place Frank McKenna: The private sector will development and willing and ready to invest whatever funding step up to the plate where they see a realistic funding is available. prospect of progress and, of course, a opportunities are financial return. I sense a renewed appetite those that are from our civic and business leaders to Are there any projects in other successful and our ensure that Preston is the ‘where’ for those cities in the region from which leaders have to be prospective investors. Preston can learn some lessons? ready to make things happen. There are If so, what are they? David Coates: still land assembly and consultation There will obviously Nick Lancaster: Salford’s Media City is exercises required to make sure the larger be strong becoming a great example of how to attract scale projects can be delivered. By using this competition for inward investment and engage with the period productively to interrogate and revisit whatever public education sector and local labour market to the current proposals, our political and funding is still out create a well-trained workforce. Preston can private sector leaders can make sure Preston there and private draw real inspiration from this. is ready to move as soon as those newer sector money will opportunities arise. only be available if David Taylor: We must look at Manchester there is a worthy as our model. Strong political leadership, David Coates: We must get development combined with clear strategic objectives, has return to be made. moving in the city centre, whether that is transformed Manchester over the last twenty There’s a real need to work together and through making planning more flexible, years. Manchester must be the model. prioritise projects that will give the greatest making the city more attractive to investors Preston has immense potential and we economic return. through rates, or generally having a more up the moore and smalley debate 13 should aspire to be a ‘premier league’ city in every sense and that includes the ‘Places that can respond quickly to football club. development and funding opportunities Eliot Ward: There have been quality are those that are successful’ Mick Goode public realm projects at the Pier Head and Lime Street Gateway in Liverpool, as well as the concentration of new Grade ‘A’ office accommodation in St Paul’s Square. Similar office schemes at Spinningfields assets, including Winckley Square, the docks platform for Preston to develop its city and Piccadilly in Manchester have been and the Flag Market. With a bit of luck, status and encourage investment – it’s an enormously successful. The private sector Preston North End will be in the Premier opportunity that should not be missed. has played a major part in the delivery League and I fully expect that by 2020, of these projects, not just in building Preston will be accepted by everyone as the David Coates: The potential is boundless. them but also in planning and promoting capital of Lancashire. In 20 years time, we should have one of them through local public/private Britain’s biggest and best universities partnership boards. Eliot Ward: Preston has the potential to be producing students that want to stay and recognised as a great European city, albeit work in our city’s thriving professional Frank McKenna: Manchester and on a smaller scale. The city will have services industry; that want to live and play Liverpool have demonstrated that you can strengthened its current role as the major in a strong retail and leisure offer; and join transform image and perception in a very economic driver for Lancashire and will be industries such as nuclear, aerospace and short period of time. To achieve this they an automatic location choice for expanding renewable energies that will spring up took risks, they were innovative, they domestic and international businesses, a around us. accepted the changes that had taken place in must visit tourist destination, and a great the economy, and provided strong, if not place in which to live, study and work. Mick Goode: I agree that we shouldn’t just always popular, leadership at a civic and Graduate retention in the city will have try to duplicate what our neighbours have business level. We can do this in Preston, improved dramatically as a result. done. By concentrating on what is unique but we must replace negativity and about Preston we can create a sustainable pessimism with a ‘can do’ attitude. Nick Lancaster: Preston has a long and special place within the North West heritage of traditional industries and it business and administrative community. David Wade Smith: It’s great that cities would be a mistake to simply disregard these We have to promote those services and on our own doorstep have been successful, and focus solely on newer industries, such as facilities that are needed for longevity and but we have to look further afield too. digital media. With the help of university to produce a timeless city of the 21st century Bordeaux is an excellent example for Preston and creative zones we can attract these new and beyond. to follow. It’s a city of a similar size and has businesses, while supporting and developing completely transformed itself over the last established ones through the provision of ‘Preston has the 20 years through various infrastructure highly skilled graduates, cutting-edge projects, including a new tram system, thinking and research. similar to what Preston has proposed. potential to be recognised as a great Germany also has numerous examples of David Wade Smith: To realise its potential, Preston has to look at its natural, European city’ post-industrial towns that have had a complete turnaround in fortunes. man-made, and people resources. Taking Eliot Ward natural resources, Preston has to focus on its visitor economy. It has countryside, coast Preston clearly has an important and city within a short radius and this has to place in Lancashire’s future. be a key selling point. Looking at man-made Where do you see this in 10 or resources, it has excellent motorway links 20 year’s time? With the correct and access to ports and airports. Thirdly, it funding, the right leadership has great people who are renowned for being and a good attitude, what is the some of the warmest and friendliest people potential for the city? anywhere. If Preston can leverage all of these together it can be a great small city. Frank McKenna: Preston can become the most admired European ‘micro’ city in the Tracey Johnson: There’s no reason why UK. We don’t want to simply replicate what the city can’t place itself on a competitive has happened in other cities. Indeed we need footing with other UK and European cities, to retain the uniqueness that makes Preston with thriving commercial and retail sectors, such a great place to live and work. I want to a university recognised for its academic see ‘play’ added to that list and I think we success and research programmes, a skilled can significantly enhance our night time and flexible workforce, and reputation for its economy over the next five years. I expect us contribution to the cultural life of the North to finally take advantage of our existing West. The 2012 Preston Guild can be a real 14 feature Recovery special Which sectors will lead UK growth in the next five years? Three Moore and Smalley experts analyse the industries they believe will be at the heart of our recovery. Low carbon world means high profit businesses A n upsurge in entered the public consciousness on a level to rise to 45 per cent by 2015. environmental national – and indeed international – Successful recycling and waste legislation, level. We are all familiar with the globally businesses have invested in both capital combined with public recognised logo that promotes recycling as equipment as well as systems and demand for sustainable an integral part of living a ‘greener’, more procedures to ensure that they have living means the future is altruistic life. obtained the appropriate licences and can green. Andrew Norman As a result, recycling is now a central provide the necessary audit traceability of explains why. activity in most business sectors, from oils used materials. The recycling industry has been and plastics to household and green waste. Powerful growth in the sector also around for a long time in the guise of The cost of treating waste and the long brings challenges. Over the coming years, traditional businesses such as scrap metal term shortage of landfill sites has recycling and waste management merchants and reclamation businesses propelled recycling into fresh economic businesses will have to develop continuing operating alongside demolition pastures, with businesses in the sector efficiency measures in recycling contractors. capable of enormous profitability. techniques, deliver innovation through However, the last decade has seen a The economic strategy for recycling is new technology, and educate businesses radical step-change in the sector which has driven by the ever increasing costs of and individuals in the benefits of recycling. shed its shabby image and acquired the waste management and escalating All this will need to be supported with a mantle of a dynamic, forward looking concerns over climate change. Figures capital investment programme to meet industry with green credentials second to from the Office for National Statistics continually increasing demand. none. indicate that almost 35 per cent of UK However, the main aims of recycling This transformation has in part been household waste in 2007/08 was recycled. and waste management – to save energy, driven by regulatory requirements, such as Although this is in line with many reduce waste in landfill sites and help the EU framework directive on waste, countries in the EU, there is still room for create a low-carbon economy – are in bolstered by legislation from the UK improvement. Austria recycles 60 per cent harmony with legislative requirements and government. of its waste and the UK National Waste public sentiment. The upshot is a sector Equally importantly, the Strategy, backed by the government, with massive and sustainable growth environmental virtues of recycling have requires the country’s household recycling potential. feature 15 Automotive sector is set to drive growth T he automotive Leyland Trucks and bus-maker Optare. impact. The climate change agenda is industry is a large This is not to mention around 250 driving much of these technological and critical sector automotive supply chain companies and a advances, resulting in increased that is expected to further 250 related businesses. investment in R&D and skilled workforces. generate strong growth. Prospects for the regional sector are According to the SMMT’s annual New Car Ginni Cooper examines encouraging, with preparations under way CO2 Report, the emission from an average the industry’s prospects. at Halewood to produce the new small new car sold in the UK in 2009 was 21.2 Recent figures from the Society of Range Rover and Vauxhall’s Ellesmere per cent better than the 1997 base level Motor Manufacturers and Traders Port plant receiving the go-ahead from and this continues to improve into 2010. (SMMT) reveal that the UK has more than parent business General Motors to Consumers are more conscious than 30 automotive manufacturers, producing produce the acclaimed new Astra. ever of the need for low carbon transport more than one million vehicles and two Recent turbulent economic conditions and this presents a significant opportunity million engines per year, and contributing had a significant impact on the sector. for the industry. The government has £10 billion to the UK economy. Many manufacturers streamlined recently confirmed that the Plug-In-Car With some 180,000 UK jobs relying on operations and similar activity has Grant will go ahead from January 2011. automotive manufacturing and 640,000 followed suit throughout the supply chain. The aim of this is to stimulate demand for UK jobs on automotive supply, retail and The positive outcome, however, should low carbon vehicles and could entitle servicing, this is clearly an industry whose manifest itself in more robust motorists to a grant towards the cost of an future is of enormous significance to the organisations ready for an economic electric, plug-in hybrid or hydrogen fuel broader economy. upturn. cell car, which will generate further On a regional level, the North West is Technological progress has seen expansion across the sector. home to car makers Jaguar Land Rover dramatic improvements in vehicle safety, (JLR), Vauxhall and Bentley, as well as economy, performance and environmental Leisure and tourism will boost recovery G reat things are visitors. Just as impressively, leisure and Among the challenges facing the sector expected of the tourism is ranked third in the country’s is attracting more overseas visitors, leisure and top exporting industries, beaten only by especially from locations such as India and tourism industry, hailed chemicals and financial services. China where foreign travel is becoming an recently by the Prime Another reason why leisure and option for emerging middle classes. If Minister as the sector to tourism has caught the Prime Minister’s these newly rich individuals do a European drive the nation’s eye may well be linked to its value tour, we must ensure the UK is on their economic recovery. Rachel Marsdin to the exchequer. Last year, government itinerary. examines some of the issues. coffers were swollen by £3bn in tax Domestically, the challenges are to Leisure and tourism is certainly well revenue as a result of spending by make the ‘staycation’ concept permanent positioned to perform strongly over the foreign tourists. so more British people holiday in the UK, next five years. Official figures show that Not surprisingly, London accounted while addressing funding issues. Many in 2009 the industry created almost nine for half of the most visited places by hotels and other sites have relied on the per cent of GDP, while some £90bn was inbound tourists in the UK, with 37 per tourist boards for grant funding, but in the spent by tourists, and 2.6m people were cent spread across the rest of England. current climate they must find alternative employed directly and indirectly in the The North West, with the Lake District means of financing vitally needed sector – that’s one in 12 people in the and the great cities of Manchester and improvements. national workforce. Liverpool, has no doubt played a major Forecasts predict the industry’s role in attracting visitors from overseas contribution to the economy will grow by while Blackpool retains its position as the 60 per cent by 2020, with spending by nation’s favourite resort, second only to tourists predicted to rise by three per cent London in the country’s league table of annually, driven largely by overseas most visited places by Britons. 16 vat Stephen Adams 20 per cent Associate tax principal 01772 821021 firstname.lastname@example.org VAT health check O ur 20 per cent VAT health check is for firms that wish to help customers ‘Special rules apply to tickets for sporting to buy goods and services from them before 20 per cent VAT arrives on January 4, and other events’ 2011. It builds on HM Revenue & Customs’ (HMRC’s) detailed rules to avoid 20 per cent VAT on sales which span January 4, 2011, ie: • Goods or services supplied before January 4, 2011 but invoiced or paid after January 4, 2011 and; • Invoices or payments before January 4, 2011 for goods or services supplied after January 4, 2011 and; • Continuous or single supplies of services provided before and after January 4, 2011. Likewise you may wish to buy things yourself before January 4, 2011, but care is needed as HMRC make it clear they will still assess 20 per cent VAT on any deals perceived as artificial, where at least ONE of the following summary conditions apply: • The supplier and customer are connected or; • The supplier (or anyone connected with the supplier) finances any prepayment or; • The supplier sends an invoice which is not for payment within six months or; • The sale (and any related sales) amount to over £100,000. • Groups of companies – using a VAT group And finally… take cover from the Special rules also apply to particular types of to avoid VAT on intra-group transactions. cost of HMRC investigations businesses and transactions, spanning • Large firms– reclaiming VAT on We are seeing increasing efforts by January 4, 2011 including: unprocessed purchase invoices each HMRC to collect fines for undisclosed • Advance tickets and season tickets for quarter. ‘careless’ errors which now attract a sporting and other events. • Medium firms – accounting for VAT on a minimum 15 per cent fine. Our fee • Club and other subscriptions paid in cash basis if turnover is below £1.6m pa. protection scheme avoids the high cost advance. • Small firms – paying VAT at a lower flat of dealing with HMRC enquiries and • Hire purchase and conditional / credit rate if turnover is below £230,000 pa. investigations which can exceed a few sales. thousand pounds as HMRC always • All firms – billing at the start, ie, not at the require detailed analysis of all relevant • All land/property and construction service end, of each VAT quarter. facts before agreeing to waive or transactions. Please do get in touch to discuss how the suspend any fines. Costs are covered Our 20 per cent VAT health check is also cost of VAT can be reduced in your business from receipt of the initial HMRC letter helping many firms to reduce the cost of at any time, as the new VAT rate (one and the scheme provides peace of mind VAT by making full use of special VAT sixth of VAT inclusive turnover) will so you can carry on running your schemes and good housekeeping almost certainly focus the minds of most business instead of losing valuable time techniques, for example: firms next year. to HMRC. Contact Moore and Smalley on 01772 821021 for further details. food for thought 17 foodforthought business opinion, thoughts and advice Jim Hancock writes Learning curve defining moments in business One of the most crucial lessons for any service-led business in the current economic climate is to align your activities so they continue to reflect your clients’ changing requirements. A few years ago, people were commissioning nice-to-have services, whereas these days they are looking for ways of driving down costs and increasing efficiency. This means it’s vital to understand the critical areas of the client’s business and be very clear on how your input will benefit their bottom line in a direct and measurable Preston’s council leader called them the most important six weeks in the city’s history. way. Just as importantly, you must Ken Hudson was referring to the public inquiry into the Tithebarn project, the £700m implement the same approach internally, so plan to revamp the city centre’s retail, leisure and transport offer. your commercial focus mirrors your client’s. From my observation it was certainly a gruelling six weeks on the Preston City Campus of If a client is looking to extract greater UCLan. During six of the hottest weeks of this fine summer, lawyers and planners battled value from expenditure, you must back and forth over this contentious plan. demonstrate that you are also doing this – It has sadly pitted Preston against her neighbours, Blackpool and Blackburn, at a time not simply by talking about it, but actually when all the talk is about new local enterprise partnerships to replace regional structures. doing it within your own organisation. For some of the time I sat next to Cllr Hudson at the inquiry. He resembled a We are now continually asking ourselves football manager in the dugout. He’d given his team instructions but could do no the same question that our clients are more to influence play. asking: If I invest in this, how will it help me Back and forth the argument went as the weeks passed. The excellent counsel for the to achieve my strategic goals? opponents tried to convince the inspector their case was not based on spite or envy but out of Businesses that align themselves in this a duty to the Central Lancashire region. We were asked to imagine shoppers drawn away way will not only deliver a more focused from the delights of shopping on Blackpool’s prom into the vortex of Preston. service to their clients, but will also improve Preston came back fighting saying the city deserved the regeneration other towns had their own performance. undergone. But there was an ominous warning for the inspector now considering his verdict. Keith Longney is managing If the scheme was rejected the developers Lend Lease would not submit another scheme nor director of Kendal-based management invest in other parts of Lancashire. training company Acorn Coaching and Written by Jim Hancock, the former political editor of BBC North West and Development. Visit columnist for Liverpool Daily Post and EN magazine www.acorncoaching.com 18 food for thought foodforthought business opinion, thoughts and advice How to groom Jargon buster: What is a BIMBO? your business for sale Buy-in management buy outs – better known as BIMBOs – are effectively a cross between a management buyout (MBO) and a management buy-in (MBI). A BIMBO transaction involves the acquisition of a business by its existing Grooming a business for sale is not management team combined with external management buy-in candidates. This type of something to be done at short notice deal is a particularly useful means of bridging skills gaps in an internal buyout team by and a time-frame of at least two years bringing in key individuals from outside the business. should be built in if the process is to have The success of a traditional MBO hinges on the skill-set of the management team as maximum effect. a whole, but deals are sometimes hamstrung by a lack of expertise or experience in The importance of grooming cannot some areas. be overstated. The aim is not to ‘window On the other hand, an MBI involves forming a new management team specifically dress’ a business, but to ensure it is fit to replace current management, which means the MBI directors will not have a detailed to be marketed in much the same way understanding of the business. as an athlete is fit to enter a lengthy and A BIMBO combines the advantages of the existing management team, with its testing event. hands-on experience of running the business, with the skills of new management. This means any issues that could detract However, BIMBOs are not always the ‘dream ticket’ they might seem. Success from the value are resolved well in advance requires all members of the management team to work as one in sharing their so that the business will stand up to the knowledge and skills, but conflicts can and do arise among individuals from different close scrutiny of a potential purchaser’s due backgrounds. diligence team. Written by Damian Walmsley, partner Identifying probable purchasers and tackling the issues most likely to concern them is another crucial element of the Get connected: dealing with the media grooming procedure. It is also important to ensure the business is soundly managed, while Media interviews can be daunting. However, they are a chance to tell your story and make a demonstrating a track record of solid good impression for your company. But preparation is the key. Here are ten handy tips: profitability, along with a business plan that projects growth beyond the expected timing 1. Be prepared – anticipate the questions you may be asked. of the sale. 2. Prepare a single communication objective and two or three secondary points you want Efficient management of working capital to make. and positive cashflow will always impress 3. Familiarise yourself with the programme, publication or radio show to get an idea of the potential buyers. They will additionally want tone of the interview. to see evidence of sound customer 4. Try and be confident – this is your interview. relationships that are free from product or 5. Be positive and not defensive. service quality problems. 6. Keep responses brief – do not give short yes and no answers, yet do not ramble on. Finally, it is essential to resolve any tax 7. Compose your thoughts before you speak. issues, as well as environmental, health and 8. Know your facts – try not to say “I think” as this does not sound positive. safety, regulatory and pension concerns. 9. Avoid saying things “off the record” to journalists – assume everything you say will be quoted, and never say “no comment”. Written by Stephen Gregson, corporate 10. Avoid speaking in jargon – you want to put your message across as plainly as possible. finance director Written by Mitch Landis from MLPR Wisewords “It is not the employer who pays the wages. He only handles the money. It is the product that pays the wages.” Henry Ford food for thought 19 foodforthought business opinion, thoughts and advice Banishing the thieves of time Waiting patently Safeguarding your ideas and inventions – also known as intellectual property – is critical to business success. You can do this with a patent, but registration is neither straightforward nor cheap and a number of factors should be kept in mind. 1. Is your idea a sound commercial proposition? If it won’t get off the ground you will be wasting your money registering it. You should also ensure that nobody has got there first – a Google search is a good start. 2. Next stop is the Patent Office where a search of the records will reveal if a similar idea has been patented. You can do this yourself or use a Successful senior managers must leverage a high ratio of time to productivity. Here are six patent agent or patent attorney. useful ways to get more for less. 3. A patent prevents anyone else from Arrive early making, using, selling or importing Getting into work before everyone else means you miss the morning traffic; can work without your invention for up to 20 years. distractions until your colleagues arrive; and get a head start on the day. But patents apply only to the country which has granted them so When possible, work from home think carefully about where you You immediately save the time you would have spent on the daily commute and can get need the protection. through much more work when you aren’t being buttonholed on your way to the coffee machine or by colleagues ‘dropping by’. 4. A patent can take three or four years to arrive and one of the main Outsource issues affecting growing businesses Owner managers in particular tend to believe that if they can do something, they should. is the need to develop and market But outsourcing is extremely efficient and there are very few business functions that cannot your product as soon as possible. be done better, faster and cheaper by outsourcing to professionals. Consider how you will safeguard Delegate your idea during this period. Learn to trust your team. If you don’t think a person can handle a task, take the time to train 5. Obtaining a patent can also be him or her to do so. This will save you a great deal of time later. Delegating means you expensive and you often need deep empower others, thereby raising their productivity, while freeing yourself to focus on strategy. pockets to enforce it. It is Don’t let meetings meander sometimes more cost-effective not Avoid having meetings whenever possible and if you must hold one, set a strict time limit. All to apply for the patent and instead too often people believe it is written somewhere that meetings must take at least two hours or rely on keeping your idea worse still, half a day. confidential. Don’t be a slave to email Written by Adam Parton, Resist the temptation to respond to emails on a drip-feed basis throughout the day. Set aside corporate services director one or two periods to process your emails, then work through them methodically. Written by Danny Houghton, partner Smalleytalk Managing Editor: Danny Houghton Written and Made in Freshfield. www.freshfield.com Brainiacs 2010 Meyler Cup Moore and Smalley has been testing the Nine local businesses took part in the winners knowledge of its clients and intermediaries quiz, held at The Glendower Hotel, Lytham, with its popular charity quiz nights. in aid of the independent humanitarian The firm raised over £500 for medical aid organisation. international medical charity Médecins Sans Meanwhile, the firm held a quiz at The Frontières (MSF) after hosting a quiz to Hawkshead Brewery in Kendal which raised mark the 15th anniversary of the Association £289 for Nurture Lakeland’s Staveley of Independent Specialist Medical Riverside Walk Fund which improves public Accountants (AISMA). footpaths to give better access for people with limited mobility. Peter bows out at Moore and Smalley Peter, who joined the firm as an articled clerk and qualified in 1973, was made a partner in 1977 and had a varied client (L-R) Sohel Master (captain), David Ingram and portfolio of commercial and not-for-profit Arthur Rose organisations. The 62-year-old will remain advising Whittingham and Goosnargh First XI have some of the firm’s charity clients. Peter now been crowned winners of the Moore and occupies a number of official roles for Smalley-sponsored Palace Shield Meyler various charities including The Harris Cup – the ‘FA Cup’ of the Palace Shield Museum, The Harris Charity, Preston Relief cricket league. in Need, Gift ‘92 and Galloways. They defeated Vernon Carus in the final. Peter said: “The firm has a bright future Moshin Mohdi was awarded man-of-the- Former Moore and Smalley partner, Peter ahead. I’ll be sorry to leave but I will enjoy match for his 78. Metcalf, has bid a fond farewell to colleagues sitting on the other side of the fence through Sponsored by Moore and Smalley, the after announcing his retirement from the my various roles with charities.” Palace Shield celebrated the 75th firm. But he won’t be hanging up his suit for anniversary of the Meyler Cup in 2010. good just yet. Making the news It’s been a busy summer in the spotlight for magazine Caring UK. affecting British Airways. Moore and Smalley’s business and finance Moore and Smalley’s specialist leisure Another big story was Blackpool Football experts. and tourism team used the holiday season to Club’s first match in the Premier League. As In June, the firm was inundated with raise its profile with a round table discussion part of its preview coverage, the Blackpool requests for analysis of the emergency on Lancashire’s visitor economy. The event Gazette reported on Moore and Smalley’s web Budget. This led to David Ingram, Stephen featured in the Lancaster Guardian, poll which found the majority of local Adams, David Bennett and Colin Johnson Morecambe Visitor, Lancashire Telegraph businesses thought Blackpool’s Premier League being interviewed for broadcasts on BBC and Lancashire Evening Post. status would boost the town’s economy. Radio Lancashire and BBC Radio Cumbria. Meanwhile, the Westmorland Gazette Finally, partner Karen Hain, was The corporate finance team were in the reported on a strong summer trading period interviewed by the Lancashire Evening Post news again after completing a deal involving for hotels in Cumbria. Corporate services for a story on the Legal Services Act. Karen domiciliary care business Total Care North director Colin Johnson gave his thoughts on explained how Moore and Smalley is West Ltd. The story made headlines in the the trend, citing May and June’s hot advising a number of law firms on the new regional business media and leading trade weather, the ash cloud crisis and strikes business structures allowed under the Act. Preston (head office): Richard House, 9 Winckley Square, Preston, Lancashire PR1 3HP Tel: 01772 821021 Fylde: Tel: 01253 404404 Kendal: Tel: 01539 729727 Kirkby Lonsdale: Tel: 015242 71402 Lancaster: Tel: 01524 62801 Nottingham: Tel: 0115 972 1050 Central fax: 01772 259441 www.mooreandsmalley.co.uk Moore and Smalley LLP is a limited liability partnership registered in England and Wales: No. OC313896. Registered Office: Richard House, 9 Winckley Square, Preston, Lancashire PR1 3HP. The term “partner” indicates a member of Moore and Smalley LLP who is not in partnership for the purpose of the Partnership Act 1890. A list of members is available from our registered office. Moore and Smalley are registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Authorised and regulated by the Financial Services Authority. Moore and Smalley C.A. Limited is a limited company registered in England and Wales: Company No. 5373155. Registered Office: Richard House, 9 Winckley Square, Preston, Lancashire PR1 3HP.
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