The Big Conversation: Helping Britain Recover - North East event
On September 28, Lloyds Bank hosted a virtual event to discuss the challenges and opportunities for firms in the North East as they deal with the economic impact of coronavirus.
- Jonathan Caisley, Managing Director, Biofresh Group, a food storage specialist based in Stocksfield, Northumberland
- Matt Beeton, Chief Executive Officer, Port of Tyne, one of UK’s most innovative and efficient deep-sea ports handling cargoes across five continents
- Sarah Glendinning, Regional Director North East, CBI
- Gareth Oakley, Managing Director Business Banking, Lloyds Bank
Hosted by broadcast journalist Declan Curry
- The current business environment
- Rising to the coronavirus challenge
- Targeting growth opportunities in a low growth economic environment
- Access to finance
- Making efficiencies and increasing productivity
The North East is one of the most confident regions in the UK, second only to the South East, though we are still in a period of historic lows in optimism. An ONS survey found more than two thirds of the region’s businesses had seen turnover fall during lockdown, while 300,000 workers have been furloughed.
Biofresh reported that, since the start of lockdown, a previously niche part of its business supplying sanitisation systems had seen a surge in demand from sectors including care homes and public transport whereas Port of Tyne accelerated existing plans to diversify, digitalise and win new business after its cruise, ferry and automotive businesses had all ceased operations during lockdown (with only its bulk commodities and land rental businesses remaining unaffected).
With both positive and negative impacts from the outbreak, the CBI raised concerns about high debt burdens for business, unemployment and Brexit uncertainty. Though collaboration between public, private, education and voluntary sector stakeholders had been brilliant, the North East should aim to build back better, bolder and greener than before.
Growing demand for Biofresh sanitisation systems had opened up communications channels with new customers potentially driving longer-term growth opportunities, while its core food storage business was also starting to rebound.
Port of Tyne stands to benefit from the region’s renewable energy cluster, which could be as important in driving prosperity in the region as the oil sector had in Aberdeen, whilst the CBI said peer-to-peer support will be vital to create a business ecosystem that will help the region build on its strengths.
Poll 1: What would help business recovery most in the North East?
Creation of regional growth funds - 48%*
Grants to retain existing/ take on new employees - 19%*
Tax breaks - 10%*
Improved digital connectivity - 10%*
More local (i.e. devolved) decision making by public bodies - 10%*
A stronger network among the local business community - 5%*
* note these numbers are rounded
The poll result reflected how decisions made at a local level can lead to better outcomes for local businesses.
“There is a lack of awareness of all the funding options available to businesses and a legacy of cautious behaviour since the financial crisis.” Sarah Glendinning, Regional Director North East, CBI.
A wide range of finance options remain available from Government backed-lending schemes offering very favourable terms, to deferring VAT and income tax payments to support cash flow. To fund growth, firms should look to asset finance and trade finance, as well as private equity investment, including private equity platforms that match investors with investable businesses in the North East.
Biofresh highlighted that it was too small for automation to be a practical option, but it made its manufacturing process more efficient by modifying the design of its products, as well as installing software to aid production planning, scheduling, and inventory control. The Port of Tyne’s largest cost was administration, so would look to invest in systems to reduce cost and become a smarter port.
The CBI noted that while technologies like Customer Relationship Management software and Enterprise Resource Planning systems had the potential to boost productivity, firms should also prioritise investing in people, including better management practices.
“It’s important that we level up our digital infrastructure across the country to help firms in the region communicate, collaborate and be creative.” Sarah Glendinning, Regional Director North East, CBI.
Poll 2: Which of the following would you say is most relevant of your business?
We’re more innovative than we were six months ago - 42%
We’re more resilient than we were six months ago- 25%
Our workforce is more productive than six months ago- 17%
We have more positive cash flow than six months ago- 8%
None of the above- 8%
This was no surprise as firms that invest in this type of environment tend to be more innovative.
- How have Biofresh supply chains been affected by coronavirus?
- Any advice for aspiring exporters?
- Any tips for working remotely?
Jonathan said: “This was probably our biggest challenge. It was a perfect storm. We’ve seen a big shift in the types of products we’re producing at a time when many of our suppliers were working at reduced capacity. But it has given us a better understanding of their businesses and helped them understand our business better too, fostering a spirit of partnership and collaboration.”
Matt said: “The North East is a net exporter, but only 6% of firms export, against 14% nationally. Firms should collaborate to find solutions for their businesses.”
Matt said: “Meeting online means that meetings can become shorter and more focused with a strict agenda. While it’s great to be more efficient, don’t forget there is also a need to support staff emotionally when they are working remotely.”
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