BCC Quarterly Economic Survey - Looking behind the headlines

Posted by Neil Ashbridge

Mon 06th, Aug

This was the headline for the recently published British Chambers of Commerce (BCC) Quarterly Economic Survey (QES) for Q2 2018. The overall results seemed positive on one hand with modest improvement in activity for the quarter, but seemingly less so on the other, with UK growth remaining sluggish.

This mixed picture was also reflected in the latest Bank of England’s Agents’ Summary of Business Conditions and the three-month data to May from the Office for National Statistics. Both highlighted the positive impact of the warm weather (and events like the Royal Wedding) which had helped to boost retail sales while growth in consumer services had slowed, notably in travel and tourism. Business services turnover had grown at a solid pace.  Overall industrial output contracted according to the official data though the Agents’ summary reported growth in domestic manufacturing output had edged up, with growth in export output easing slightly but remaining firm.

The Monetary Policy Committees decision to increase Bank Rate by 0.25% on 2 August came as no surprise.  The MPC acknowledges that the annual rate of growth in UK GDP remains modest by historical standards while there is a very limited degree of slack in the economy.  Unemployment was low and expected to fall a little further which was likely to feed through into domestic inflation over the next few years.  

Whilst overall the official data and surveys reflect a more positive picture than some might imagine from recent news headlines around Brexit and “trade war” rhetoric, there are key issues which need to be resolved to maintain even modest levels of optimism by business which the government must urgently address.

For example, the biggest concern for businesses continues to be the difficulties they face when trying to access skills, with the percentage of firms reporting problems rising again. This is one of the key issues on which the BCC is lobbying central government, focussing on the ongoing problems for employers with the apprenticeship and training schemes. In addition the need for clarity on immigration policy to allow UK businesses to cover vacancies is becoming even more pressing.

The response of local businesses to the BCC survey provides us with a more detailed picture on how much this is reflected geographically. 

The information provided by businesses in Liverpool and Sefton was broadly in line with the national results but highlighted a level of cautious optimism in some areas. In my view this is not only a testament to the resilience of the local economy but also a reflection of the willingness to create and respond to opportunities for economic growth, particularly amongst small and medium sized businesses (SMEs) who contributed over 87% of the responses to the Liverpool and Sefton survey.

In line with the national picture however, there was an increase in those reporting the recruitment of suitably skilled staff as a barrier to meeting their business objectives over the next 2 years (up from 39% to 47%). Despite this, current recruitment trends vary between the manufacturing sector where employers reporting difficulties continued to decline (36%) and the services sector where those reporting problems rose slightly (from 72% to 76%).

The changing attitudes of businesses in the region were also reflected in the fact that the number citing a lack of government grants towards investment as a barrier, dropped from 24% to 14%, reflecting perhaps a new pragmatism towards public sector funding.

As we approach Brexit deadlines, it will be interesting to see whether business confidence remains consistent and I would urge you all to complete the next QES (Q3) which will be available from 27 August. The BCC survey really does provide you with an opportunity to have your voice heard by government and rate setters.

If you would like more information on the results of the Liverpool and Sefton QES results please email policy@liverpoolchamber.org.uk

The results of the BCC survey can be found here

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Lorna Young, Marketing Manager, Bike & Go

Posted by Liverpool and Sefton Chambers of Commerce

Fri 03rd, Aug

What does a typical working day look like?

My role is to look after the marketing for Bike & Go which can be found at 71 sites across the UK. The geographical spread stretches from Inverness in Scotland to Liverpool Street Station in London, so there’s always a lot to do.

A typical day would see me checking emails on the train so that I can hit the ground running as soon as I arrive at the office. We see the cycling season as running between April and September, so we tend to do a lot of forward planning between October and March, looking at the best ways to raise awareness of Bike & Go among the general public, both through traditional PR and marketing, events, social media, and by reminding those who have subscribed to the scheme of the many benefits of using the bikes. As you can imagine the role keeps me busy for the rest of the year delivering everything we have planned.

I also liaise with businesses to find out whether our corporate offerings would work for them, work with third partners on marketing activities, and regularly visit the stations where the bikes are located to ensure there is plenty of visible signage on show to let people know that the bikes are there.

What advice would you give your teenage self?

I would say that things have a way of falling into place. Decide what you want, go for it, and believe that you will get there; just sometimes not by the route you had expected.

Where would we find you on your day off?

With my two sons, playing at the beach, acting as goalkeeper in the garden. . . and taking them on plenty of bike rides - of course!

What is the best advice you have been given in your career?

When I was concerned about a work situation once, a former employer reassured me by saying, ‘the sun will come up tomorrow’, and that  advice that has always stuck with me. No matter what goes wrong, or what goes right in your working day, the sun will set, and the sun will rise . . . and life will go on.

Who is your role model in business?

I am very lucky in that I have lots of amazing role models including my dad, my husband, friends and former colleagues. Rather than choosing just one person as my role model, I’d look towards anyone who is focused on what they want to achieve and adaptable enough to change with the circumstances.

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Risk-aversion the determining factor in city's bid failure; asset acquisition the key for our future competitiveness

Posted by Paul Cherpeau

Chief Executive

Fri 27th, Jul

The news of Liverpool’s unsuccessful bid to attract Channel 4 to the city was understandably disappointing to all. Yet the announced shortlist of Manchester, Leeds and Birmingham demonstrates the somewhat risk-averse decision making at play with C4 and is perhaps indicative of the level at which we as Liverpool should currently aspire.

Our business community is comparatively small against that of Manchester and Birmingham and we do not have geography on our side. Yet the strides taken in the past fifteen years should not be obscured or dismissed on account of the loss of ‘big ticket; items such as C4 and the Commonwealth Games.

I equate the city’s progress to Jurgen Klopp’s Liverpool; upon arrival a decent but underperforming team weighed down by history and performance expectations to one assembled piece by piece with each individual asset acquired adding greater quality to create a genuinely competitive outfit. Just as Klopp’s Liverpool was not quite ready to compete consistently at the top level three years ago, so our city region is on the upward trajectory where the acquisition and accumulation of individual assets will create the collective team capable of genuinely challenging for (and we hope winning!) the big ones.

The Mayor’s statement about transport links being a primary inhibitor to the bid was criticised in the social media noise, yet there are undoubtedly lessons to be learnt from our collective efforts to attract concerts, events, airlines and businesses to the region. The links to domestic and international destinations by road, rail, sea and air are an impediment against those conurbations comprising the geographical spine of the country. We shouldn’t ignore this priority improvement.

Similarly we know the improvements required in digital infrastructure and talent pool to enhance our proposition. We must not waiver in our determination to improve.

The risk-aversion of C4 – like that of the Commonwealth Games committee – was a greater impediment than that of the transport links. The review of the bid will demonstrate some tremendous successes and examples of collaboration which must be built upon. The prevailing view amongst us all is “It’s their loss.”

The result must be seen as a bump in the road, not as a sign of an inward investment apocalypse. The attraction of Taylor Wessing, BDO and continuing strength of Investec, Rathbones, Tilneys and others indicates that the environment is gathering strength. The exciting developments at Paddington Village and the wider knowledge quarter are part of this asset acquisition programme that will enhance Liverpool’s competitiveness on an incremental basis.

Other opportunities will become available in due course. Continuing to incrementally improve our asset base will ensure the next time the big ticket item becomes available and we’re in the running, we’re a favourite and not the underdog.

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Handing data protection responsibilities to an existing employee...

Posted by Nexus Protect

Wed 04th, Jul

Faced with the challenge of appointing a Data Protection Officer (DPO), many businesses' first thought is to look internally, handling data protection responsibilities to an existing employee. Yet doing so could do more harm than good to their GDPR compliance.

For some businesses, hiring a Data Protection Officer is a necessity, an essential part of the process of meeting the legal requirements laid down in the European General Data Protection Regulation (GDPR) (UK Data Bill 2018).

For others, it's simply a worthwhile addition to the team, a means of implementing GDPR-recommended best practice and proving to customers, stakeholders, and employees alike that they're taking data protection seriously.

Either way, the journey towards naming an official DPO can often prove to serve up just as many challenges as it looks to solve.

How do you find someone who knows your business and your data well enough to carry out the job effectively?

How you find someone who combines that first-hand knowledge of your enterprise with a deep understands of GDPR and other data protection regulation?

More importantly, how do you find someone who has all the necessary knowledge and data protection know-how yet won't prove to stretch your already limited resources.

For some businesses, the immediate answer seems obvious:

After all, who better to trust the management of your GDPR compliance at the highest level than someone already firmly established in your organisation?

That's before we mention the fact that adding DPO responsibilities to the workload of an existing employee can prove significantly more cost-effective than going through the whole hiring process to bring in someone from outside the business.

Yet as easy as it seems on the surface, appointing an internal DPO isn't always so straightforward.

At NexusProtect, we work with businesses throughout the UK to help them manage DPO responsibilities in a way that proves both cost-efficient and effective in ensuring a holistic approach to GDPR right across the board.

Here, we explain why appointing a Data Protection Officer from within your organisation may prove more difficult than you might think.

First though, let's go back to basics:


What is a Data Protection Officer? Does my business really need one?


 In a nutshell, a Data Protection Officer is an officially named person responsible for overseeing the GDPR compliance of the organisation appointing them. If you hire a DPO, they'll be the person who supports the data lead / controller who responds to Data Subject Access Requests, who ensures that all your compliance measures are sufficient and effective and -in a worst-case scenario- who reports a data breach to the relevant governing body. In this case, that would be the Information Commissioner's Office (ICO).

Hiring a DPO isn't compulsory for every business or organisation. Article 37 of the GDPR state that your organisation will only be required to legally appoint a DPO if:

You're a public authority (except for courts acting in a judicial capacity)

Your core activities require "large-scale, regular and systematic monitoring of individuals

Your core activities consist of “large-scale processing of special data categories of data or data relating to criminal convictions and offences.

That being said, the Article 29 Data Protection Working Party does recommend hiring a DPO as a means of ensuring best practice.

The DPO must:

Be free to carry out their duties independently, with no influence from management or trustees
Carry out those duties at board level, reporting only to the highest level of seniority within the organisation
Be able to carry out their DPO duties without carrying out existing operational duties which serve as a clear conflict of interest.

It's at this point when we start to see clear problems with appointing an internal DPO.

Avoiding a conflict of interest

When it comes to the responsibilities of a Data Protection Officer, a conflict of interest is likely to arise in any one of two situations:

1: When the DPO's other responsibilities involve defining the purposes and means of processing the very same personal data that they are responsible for governing the protection of.

2: When the DPO's other responsibilities involve putting the interests of the business before the protection of personal data.

For example, you couldn't appoint your existing marketing manager as DPO as they are typically responsible for determining what data is processed and why and using that data first and foremost to help the business increase sales. 
Likewise, since your IT Manager, Chief Technology Officer (CTO), and IT Security Manager are also unlikely candidates for the position since their existing roles are likely to be concerned -at least at some level- with managing data security measures.

Again, this serves as a conflict of interest since the DPO is responsible for determining whether those same measures are up to scratch in terms of ensuring frictionless compliance with GDP the Information Commissioner's Office says:

"Controllers are liable for their compliance with the GDPR and must only appoint processors who can provide ‘sufficient guarantees’ that the requirements of the GDPR will be met and the rights of data subjects protected."

One of these 'sufficient guarantees' made by the processor is that -where necessary- they have appointed a DPO. This also applies to any sub-processors that are hired to carry out the processing work.

As a controller, you should be confident that an appropriate person has been appointed to the role of DPO and that any processors (and their sub-processors) are meeting GDPR requirements, as their failure to do could still result in fines for your organisation.

So far, we've considered the dangers in appointing an existing member of your workforce to the role of Data Protection Officer, all of which has likely left you with one very important question you need answering:

If hiring internally is going to create more problems than it solves, then what's the alternative?

The answer is simple, and is presented to you in GDPR Article 37(6)

"The data protection officer may be a staff member of the controller or processor or fulfil the tasks on the basis of a service contract."

In other words, there's no need to risk a potential conflict of interest by hiring an existing employee when you can outsource the work of a DPO to a third-party.

Not only does this negate all the potential pitfalls of an internal appointment, but it also ensures that the person carrying out DPO services on your behalf can make the most of their position outside the company to remain fully impartial and independent, a key requirement of the GDPR requirements.

At NexusProtect, we offer a comprehensive GDPR and DPO service, to companies throughout the UK, combining years of experience in helping organisations to meet data protection requirements with expertise into the most effective, affordable, and practical methods of ensuring frictionless GDPR compliance.

The result is that our clients not only ensure they meet all the necessary GDPR requirements but that they do so in a way that provides a long-term, tangible benefit to their day-to-day operation.

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White Collar Legal's blog on Suing for Breach of Contract

Posted by White Collar (Legal and Admin) Ltd

Wed 04th, Jul

Whether you’re buying a new car or selling your goods online, the chances are that you will have entered into a contract with the other party involved.

Having the contract in writing is always a sensible idea, as it protects both buyers and sellers and ensures that, if either party were to breach the contract, there would be consequences.

However, even when threatened with legal repercussions, it’s simply not possible to stop a party for breaching a contract should they want to, leaving you with no other choice than to take legal action.

But before we delve into the actions that you can take, it’s important to clearly define exactly what a contract is.

Contracts begin when two or more parties enter into a legally binding agreement, which can be made in writing, communicated orally, or through an agreement by way of conduct.

Contracts centre around three key points; an agreement, an intention to create legal relations, and consideration (i.e. one party says that they will do something in return for something else). One example of consideration is when money is exchanged for food in a restaurant; a customer and a restaurant have entered into an agreement or contract.

It’s the consideration that gives value and weight to a contract and is the most important aspect when considering legal action against a party over a breach of contract.

Breaching a contract

If one party fails to fulfil their side of an obligation, or they break the terms and conditions set out in an agreement, they have breached the contract. There are a number of ways that parties can breach contracts, but typically involve the failure to pay or the non-delivery of goods or services.

Suing someone for breach of contract

Suing for breach of contract is not always the most straightforward of processes, and you must overcome three legal hurdles to prove that your contract was breached.

The first legal hurdle is to deliver proof of the existence of a contract. A written, signed contract should be your first port of call, but other documentation, such as letters, emails, text messages, invoices and conduct can be used in substitute of a written contract in the majority of cases.

Once you have collected proof that you entered into a contract with another party, you must show that the contract has been breached. Evidence must be given to state the obligations of the accused, and that those obligations were not met (or breached), or that goods or services were not delivered to the obligated standard. Such evidence can be submitted as photographs, video files, expert testimonials or physically delivered to a court for inspection.

The final hurdle that you must overcome in order to successfully sue someone for breach of contract is showing the loss. As the injured party, it’s your responsibility to provide evidence that you suffered loss as a result of the breach of contract, and that you should be compensated as a result. Evidence can be provided in a number of methods, such as profit and loss sheets, client orders and contracts with end customers, and other written documentation.

Most claimants sue for loss that was a direct consequence of the breach of contract, but you can also claim for indirect losses. Claiming for such losses, however, is more complicated.

Before you consider suing for breach of contract, it’s important to note that, even if a court was convinced that you suffered loss as a result of a breach of contract, the process of assessing and then verifying the losses can be a long and drawn-out process, and can also be expensive.

Legal remedies for breach of contract cases

If you successfully manage to persuade the court that you suffered losses as a result of a breach of contract, then you could be entitled to receive monetary damages. Most commonly, damages are awarded to help the injured party return to the same position they would have been if the contract had not have been breached.

Is suing for breach of contract worthwhile?

It is natural to feel angry and disappointed when a company fails to deliver their end of the bargain or breaches a contract, but before you launch into a claim, you should assess your merits and evaluate whether it would be cost-effective to pursue a claim against the company.

Pursuing a breach of contract can often be an expensive and time-consuming process, and may cost you more than you lost in the first place.

There’s also the relationship between you and the contracting party to consider; suing for breach of contract could lead to long-term challenges and damage relations between the two parties, something you wouldn’t want to do in haste.

However, there are times when suing for breach of contract is the only way to resolve an issue and receive damages for the losses incurred. If you would like to find out more about breach of contract cases, don’t hesitate to get in touch with White Collar today on 0151 230 8931 or visit www.whitecollarlegalandadmin.com for more information.

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Christina Smith, Customer Service Executive at Liverpool John Lennon Airport

Posted by Liverpool and Sefton Chambers of Commerce

Fri 29th, Jun

Introduce yourself – name, where do you sit in the business, and what does the business do?

My name is Christina Smith and I am the Customer Service Executive at Liverpool John Lennon Airport. I am fiercely proud of my city region and of the airport team which is working hard to make Liverpool John Lennon Airport as the region’s airport of choice. We promote Liverpool John Lennon Airport as being Faster, Easier and Friendlier. I use the airport as a traveller frequently and I can say in an unbiased way that It’s a joy to use the airport as it is so quick and easy to get from A to B. Our colleagues at LJLA represent our region which is known for or friendly personality. Around 5 million passengers pass through Liverpool John Lennon annually.

I work with the airport teams and with our users who provide us with an incredible amount of feedback. We want to hear from existing and potential customers so we offer the traditional channels (face to face, letter, email, phone ), as well as social media and surveys (including a global airport customer service survey, known as the ACI ASQ programme). As a business, feedback from our customers is vital to developing our services to meet the needs of our existing and potential users. Feedback and engagement with users and disability groups in particular helps us to focus on how we can also assist travellers with a range of disabilities, both hidden and visible.

What does a typical working day look like?

My typical working day starts between 0600 and 0700 through choice. Years of working shifts in the travel industry becomes ingrained and I find early mornings are my most productive time. As a 24 hour business, our users will use our multi channels to contact us around the clock.  Much of my day is spent engaging with customers from my desktop or via phone apps, but it is important to be out and about to witness what is going on with customers and colleagues too.

What is the best advice you have been given in your career?

Don’t sweat the small stuff. I try but accept that I fail regularly. Also don’t set yourself a goal to reach a set destination in terms of career. I’ve changed track several times and each path brings new opportunities and experiences. Nothing is wasted.

What changes would you like to see to improve or develop your sector?

I am passionate about the improvements we are making and can potentially make to improve accessibility at Liverpool John Lennon Airport. Countrywide 9% of travellers using UK airports who have a disability require a wheelchair.  91% of travellers who may need assistance to use airports have an audio, visual or hidden disability. Age related disabilities including dementia and cognitive impairment such as ASD are areas where information sharing is helping us to improve the airport experience for our users. If we as an airport and the City Region as a whole, can continue to improve the customer experience for all, then we have the potential to become even better at what we do.

 Where would we find you on your day off?

I’m not that good at switching  off from work so my compromise is to get away whenever I can. Yes, I’m afraid this is still work related as I will always fly from Liverpool and I will always be on the lookout for innovations on my travels which could be something we could use at Liverpool John Lennon Airport. If I can’ t get away, we are usually found walking our ‘Sausages’ (dachshunds ). These little guys are my reality check.

What advice would you give your teenage self?

Hindsight is a wonderful thing. I would advise myself to look beyond what is immediately in front of me and be prepared to take a leap of faith. As a sporty and academic teenager, I chose the most obvious path that presented itself at the time. This was symptomatic of what we did at the time. Having completed A levels I went on to study a B.Ed majoring in PE. Two years in, reality hit when I realised that the world is a lot bigger than the 9 -5 of the school week. I took that leap of faith and left Liverpool to work in France for 2 years. My thirst for knowledge of places and cultures took flight. 

Who is your role model in business?

I don’t have a single role model as I think that life role models are important. My role model in life is my 86 year old mother. She is in the advanced stages of dementia but if I can achieve a fraction of what she has achieved then I will have made it.

Why choose Liverpool City Region?

Like many teenagers of my generation, I couldn’t wait to leave Liverpool. In fact, I grew up at a time when Liverpool was definitely struggling. It was a source of embarrassment to admit to being from Liverpool as the image of the city region at the time nationally was as low as it can be. Leaving to work in France, followed by time spent working at London Gatwick Airport, I lost much of  my scouse accent. Later, working for many years at another airport, I seethed at the ‘scouse’ jokes and the way people reacted to the scouse accent.  Returning to work at Liverpool John Lennon Airport in the early noughties, I don’t know if it was maturity or a growing pride in our city region, but the accent is back and used with pride. The City Region has been on the up for some time and seeing visitors to the region from across Europe fly in here is great. I can now say with my hand on heart, that I am a proud advocate of our city region and of Liverpool John Lennon Airport. 

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Posted by Paul Cherpeau

Chief Executive

Fri 29th, Jun

The Foreign Secretary may appear to have a problem with business with his alleged expletive outburst this week but, as the International Business Festival comes to a close, we can reflect with pride on the diversity, entrepreneurship and innovation of British businesses showcased over the last 3 weeks here in Liverpool.

Covering a range of themes including culture and sport, cities and future transport, sustainable energy, manufacturing, creative and health, it demonstrated the insatiable contribution that businesses of all shapes, sizes and types makes at a social and cultural level as well as to the economy.

It is in this spirit that the Chamber’s Annual Dinner Awards on Thursday 1st November will once again recognise those businesses and individuals who are driving forward the responsible business agenda across the Liverpool City Region.

We are also recognising the city region’s most successful Exporter of the Year to acknowledge the economic contribution made by local businesses to the national economy as well as within the city region itself. Given our burgeoning digital and technology sectors we are also introducing an award for Digital and Technology to highlight local talent, innovation and success.

We will also celebrate individual achievements across all of our business community in our Local Hero Award, once again recognising those individuals whose actions often go unnoticed but whose enthusiasm, passion and tenacity make things happen!

The Awards will be presented at the Chamber’s Annual Dinner on Thursday 1 November at The Rum Warehouse and we look forward to toasting the contribution of businesses that ensure that in Liverpool every day can be a festival of business.

Awards and event booking details will be released next week but in the meantime if you have any queries contact the team at events@liverpoolchamber.org.uk

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Posted by Neil Ashbridge

Fri 29th, Jun

It has been an extraordinary few weeks on the international stage. From an acrimonious G7 Summit, changes in the leadership of both the Spanish and Italian governments to the media frenzy which surrounded the meeting between Donald Trump and Kim Jong-un. At home, the Brexit debate continues to expose the rifts on both sides of the House and as the German Chancellor is coming under increasing pressure at home, it is hard to predict what will happen next.

In fact the only thing that is certain is the uncertainty which currently exists around future trade agreements.

Post G7, journalists were in their element analysing the impact of what has traditionally been a predictable but friendly gathering, failing to agree on a final communiqué, and casting doubt on the future of the G7 itself. For the markets themselves however, it was business as usual, as they remained unmoved by the political rhetoric and exchange of personal insults.  Undoubtedly however it has left the G7 in a weaker position at a time when more stability and co-operation is needed, not just around trade.

The acrimony was not unexpected, coming as it did after the US announcement on tariffs before the Summit.  Adam Marshall, Director General of the British Chambers of Commerce (BCC), warned of the impact on UK businesses and local communities of the US tariffs, urging the government to work with our EU partners whilst we can to “prevent a global slide into protectionism that would make all of us poorer”.

The position of the International Chamber of Commerce was also clear, with Chairman Sunil Bharti Mittal stating that “Open markets underpinned by the rules-based multilateral trading system have been a vital driver of prosperity across the world over the past 50 years….Tariff hikes will inevitably impact small businesses that often rely heavily on imported goods and services.”  

For those businesses not directly affected, it is tempting to dismiss these global spats as someone else’s problem or simply not relevant. Whilst we should not let them define our negotiations around any future trade policy, the escalation of any kind of “tit for tat” tariff increases will have much wider ramifications, particularly post Brexit when, despite the resilience and determination of UK plc, it is unlikely to be business as usual.

As part of the BCC network we are in an excellent position to make sure the voice of business is not only heard but listened to and I would encourage you therefore to contact the team at the Chamber so we can understand your concerns and support you where we can. You can email us at policy@liverpoolchamber.org.uk

And finally, in the spirit of global co-operation I feel I must mention the World Cup! Securing a place in the final 16 after an unprecedented win over Panama on Sunday keeps England at the centre of the world sports stage – best of luck!

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Will Waller, Director - Head of Futures at Arcadis, looks at the implications for future investment in UK infrastructure and possible alternatives post Brexit.

Posted by Will Waller

Director - Head of Futures at Arcadis

Fri 29th, Jun

Brexit means the UK will lose access to the European Investment Bank (EIB), an unintended and little-understood consequence of the UK vote to leave the EU. Brexit may not happen until at least 2019, but the issue is more pressing.  The EIB has invested £34bn in UK projects since 2011 but following the trigger of Article 50 in March 2017, a slowdown in loans to the UK has bitten.   Just £0.88bn was invested in UK infrastructure by the EIB in 2017 – approximately a 78% drop from the circa £4bn invested in UK infrastructure by the EIB in 2016. 

The role of the EIB

In total the bank has outstanding loans in the UK worth more than £48bn. Over 80% of these are in key infrastructure sectors - including energy, water, transport and telecommunications. High profile examples include:

  • £525m for the Beatrice wind farm off the coast of Scotland
  • £700m for Thames Tideway
  • £1.5bn for Crossrail 1.

The value of EIB loans to UK infrastructure in 2016 was commensurate with approximately 25% of infrastructure construction output in that year – a significant overall contribution. 

Why is the EIB so pivotal in the first place? The answer is simply because it exists and, being convenient, has ‘crowded out’ other sources of finance. It has become an important part of the funding model for private infrastructure development.

Weaning UK clients off the EIB’s readily-available finance is more important than ever if the UK’s infrastructure pipeline is to be delivered expediently. 

Weighing the options for infrastructure finance

1. The UK could remain a member of the EIB. 

However, this is unlikely as the rules state that members must also be members of the EU. Changes would need unanimous agreement by all 27 of the remaining EU countries. Given the current state of negotiations, this is unlikely, so other alternatives are required. 

2. The formation of an alternative (UK) investment bank. 

The UK has experience of setting up infrastructure-focused national investment banks. The Green Investment Bank (GIB) was capitalised with £3bn in 2011, to stimulate green infrastructure investment. The scale is much smaller than the EIB. By the end of 2015, the bank had invested over £2bn in 60 projects. The sale of the GIB to Australian bank Macquarie was controversially completed last year, demonstrating investor interest in these types of project finance bodies. 

The idea of a new UK Investment Bank (UKIB) to take up the slack from the EIB has been widely mooted. The National Infrastructure Commission (NIC) said it would study the idea of a state-sponsored UK infrastructure bank, but there are several reasons why this is not straightforward: 

  • It will require scarce capital, estimated by the Treasury to be £15bn - £20bn.
  • It would take several years to set up. KfW, the German government’s development bank, has taken the best part of a decade to achieve scale. 
  • The UKIB would be on the government’s balance sheet, unlike the EIB, expanding the government’s stock of debt just as it is trying to reduce the deficit. 
  • The UKIB would carry a greater risk profile, being relatively concentrated geographically. This is in contrast with the EIB, which is massively diversified across a whole continent.    

However, the EIB, GIB, KfW and also the Canada Infrastructure Investment Bank all show that infrastructure investment banks can be hugely successful in financing national infrastructure at scale. The setup of a UK entity is a big challenge, but not an insurmountable one.  

3. Alternative sources of finance

There are other options. The Chancellor Philip Hammond has talked about expanding UK government financial support to infrastructure, in the form of a broader UK guarantee scheme, whereby government underwrites lending to infrastructure projects. Infrastructure bonds or gilts could also be used as alternative sources of finance. Could Chinese and other international development banks and investors also have a key role to play?

The importance of private finance

Infrastructure has a disproportionate reliance on private finance, with at least 50% of the £500bn national infrastructure and construction pipeline reliant on it. 

However, relatively limited availability and high cost of private infrastructure finance reflects the aversion investors have to delivery risk. The loss of the EIB threatens to make this worse, not because it is an alternative to private finance itself, but because a lot of private finance depends on EIB involvement to make deals work. 

Filling the gap

Whilst there is no easy or obvious solution for accessing affordable private infrastructure finance in the UK, filling the gap left by the EIB is possible. Collaboration of all parties to the deal map is required to make projects more investable:

  • Do project sponsors and the supply chain need to continue to deliver greater certainty of outcome so that projects are more predictable and investable?
  • Would better value be delivered if the government shared some of the risk associated with project delivery?  
  • Through early involvement with project development, could investors work with other stakeholders to shape more investable projects?

The reality

There is no overnight solution for the loss of the EIB and fixing financing will require action by investors, clients, constructors and government alike. Infrastructure has a key role to play in the UK’s competitiveness but, whilst preferential access to finance is constrained, the industry cannot fully play its part in driving the UK forward.  

The challenge of replacing the EIB is just one of the thousands of initiatives that government will have to take to replace capabilities previously provided through the EU. The fact that the loss of access to the EIB is already having an impact on the market, highlights the urgency behind finding alternative sources of project finance and making projects as investable as possible, to make up for it.

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Gerry O'Leary, General Manager at Arriva's Southport Depot

Posted by Liverpool and Sefton Chambers of Commerce

Fri 22nd, Jun

Introduce yourself – name, where do you sit in the business, and what does the business do?

Gerry O'Leary, General Manager at Arriva's Southport Depot

What changes would you like to see to improve or develop your sector?

I would like to see a more adaptable futuristic road network which allows our customers to get to their destination quicker without any hold ups or fuss.

What does a typical working day look like?

The best thing about my role is that no one day is typical.  From dealing with the day to day running of our business and then creating new opportunities, each day has its own independent outcomes.

What advice would you give your teenage self?

Focus on the outcome and don’t be afraid to look outside your comfort zone.

Where would we find you on your day off?

Normally in a fine eatery somewhere in the Liverpool area with my family. 

What is the best advice you have been given in your career?

Challenge the norm because more of the same does not work.  Change is inevitable so embrace it. 

Who is your role model in business?

There are many people who I currently work with who inspire me.  The GM team, Head of Operations and our MD, daily offer golden nuggets which are incredibly insightful.

Why choose Liverpool City Region?

Our region is a forward thinking area in all aspects of our industry. 

Partnerships form the basis of growth and our entwined thinking within the Alliance has helped customer satisfaction grow continually and rapidly.

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