START-UPS

MPs publish report into RBS restructuring business

The Treasury Select Committee has used parliamentary privilege to publish a report commissioned by the Financial Conduct Authority on Royal Bank of Scotland’s controversial Global Restructuring Group (GRG). Chair Nicky Morgan said the committee had done so due to “overwhelming” public interest. GRG was supposed to be a turnaround unit of the bank, but was found to have put its own commercial interests ahead of the small and medium-sized firms it was looking after. The report, written by Promontory and Mazars, estimated that about a third of firms transferred to GRG were not viable and of those that were, one in six had actually been damaged by GRG. “Our central conclusions are that there was widespread inappropriate treatment of customers by GRG,” the report said. Nicky Morgan said: “The findings in the report are disgraceful. The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through ma de-up fees, high interest rates, and the acquisition of equity and property.” RBS apologised for the treatment of SMEs while the FCA said it “fully supports the Treasury committee and BEIS committee inquiries into the issues facing SMEs” and agrees an “effective dispute resolution mechanism for businesses” is required. The Guardian’s Nils Pratley says the FCA must now identify which RBS leaders failed in their governance and hold them to account.

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UK start-ups growing by 30% every year

The UK’s 500 most successful start-ups over the past six years have grown at an annual rate of 30%, according to analysis by SyndicateRoom and Beahurst. Those that went on to an IPO grew at an even faster rate of 43% while fintech firms grew the fastest of all, achieving an annual growth rate of 63%. Chief executive and co-founder of SyndicateRoom, Gonçalo de Vasconcelos, said: “This cohort was worth just shy of £1.6bn in 2011, grew to £8bn in 2016 and now, just one year later, I’m delighted it is valued at over £10bn. What’s more, the cohort has returned over £3.7bn to shareholders, demonstrating the long-term profitability of early-stage investing.”

City AM Daily Mail

Small firms feel ignored on Brexit

Most smaller companies believe the government is ignoring their concerns on Brexit, according to research by Moore Stephens. Its survey of more than 650 owner-managed businesses showed that only 41 said ministers were listening to their views. More than half of those polled also said that their single biggest concern for 2018 was how Brexit negotiations will affect them. This was followed by skills shortages (41%), cyber-attacks (29%) and increased regulation (28%).

The Independent The Press and Journal The Scotsman The I

Firms build without bricks and mortar

The Sunday Times looks at the growing number of businesses that are eschewing permanent offices. The approach is frequently taken as a way of keeping overheads down in the early stages. Some 650,000 companies were launched in 2016, with average first-year administration costs of £22,000, according to Geniac, a company that specialises in providing support services for small businesses.

The Sunday Times

FINANCE

Half of UK companies are victims of economic crime

Research indicates that half of all UK companies have been the victim of fraud or of economic crime in the last two years. For more than half of those affected, criminal activity resulted in losses of over £72,000 while almost a quarter of UK victims admitted to losing more than £720,000. PwC questioned more than 7,000 businesses globally, of which 146 were based in the UK. Fran Marwood, forensics partner at the company, said: “UK organisations told us that the cost and disruption of sorting out the aftermath, as well as the effect on employee morale, business relations, and brand are big hidden costs,” noting also that “in this current period of rapid business change, understanding the risks and possible avenues for attack is more crucial than ever.”

The Independent

Small businesses look to specialist lenders for loans

Keith Morgan, chief executive of the British Business Bank (BBB), has said SMEs are diversifying their sources of funding away from big banks, choosing instead to shop around for specialist lenders. There was a 79% leap in equity investment to £4.5bn, a 12% jump in asset finance to £18.6bn and a 51% rise in peer-to-peer lending to £1.8bn. The BBB’s latest annual report into the small business finance market revealed that seven out of 10 small companies would choose not to borrow from a bank, even if that meant they did not expand, with small firms’ reluctance to borrow becoming “entrenched” over 2017.

Financial Times The Daily Telegraph City AM

EMPLOYMENT

Supreme Court to rule on pivotal workers’ rights case

The Supreme Court is hearing an employment case that will have far-reaching implications for workers’ rights in the ‘gig economy.’ Gary Smith, a plumber who worked for Pimlico Plumbers for five years from 2005, has already won a number of lower court rulings that he is entitled to basic workers’ rights, even though he was described in his contract as a “self-employed operative.” Pimlico Plumbers is now appealing against a decision made by the Court of Appeal last year that Mr Smith was a worker because he was required to use the firm’s vehicles for assignments and was obliged by contract to undertake a minimum number of hours per week – so giving him the right to bring legal claims around disability discrimination, holiday pay and unauthorised wage deduction.

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Brexit Britain remains popular destination for EU workers

The number of European migrants working in Britain continues to rise despite the vote to quit the EU, official figures show. The number of workers from 14 long-term member states including Germany, Italy, Spain and France rose while a record 364,000 Romanians and Bulgarians were working in the UK, according to the data from the Office for National Statistics (ONS). But the number of Poles and Hungarians fell, as did the number of non-UK nationals from outside the EU working in the UK. In all, the number of Europeans employed in the UK rose to 2.34m between October and December last year – up 100,000 on the same period a year earlier.

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Employers struggle to fill vacancies amid jobs boom

Low unemployment has left UK firms struggling to recruit, with record job vacancies in the health and hospitality industries. A total of 823,000 job vacancies were advertised last month, the ONS said, up by 62,000 on the year. Of those, a record 130,000 were in health and social work, and 95,000 in the hotel and food industries. The number of EU workers in the UK rose by 101,000 in the past year to 3.5m – down on the level seen from 2014 to 2016, but above the 95,000 average annual increase over the past 20 years.

The Sunday Telegraph

Digital skills key to scaling up

Writing in the Telegraph, Michelle Ovens, director of the Do It Digital campaign, argues that improving small businesses’ digital skills is the key to fuelling growth and scaling up. She welcomes initiatives such as the recently announced partnership between TSB and Enterprise Nation, offering small businesses and entrepreneurs “digital vouchers” worth up to £500 that can be used to help boost their digital capability.

The Daily Telegraph

Poor returns on government’s pension plan

Research from the Institute of Chartered Accountants of Scotland (ICAS) suggests lower paid workers would be better off claiming the state pension and associated housing and council tax benefits than paying into auto-enrolment pensions, which could make them eligible for the benefits. ICAS president Sir Brian Souter said: “It is patently wrong to be sending a message to the lower-paid to auto-enrol and make personal financial sacrifices when that could make them worse off in retirement.”

The Times

Levy hitting apprenticeships, say employers

Employers and training providers in the UK have warned that the apprenticeship levy has hit uptake, with government figures showing that there were 27,000 apprenticeship starts in November 2017 against 41,600 a year earlier – a drop of 35%. Mark Dawe of the Association of Employment and Learning Providers said a drop in the number of 16 to 18-year-olds starting apprenticeships suggests the scheme was failing precisely the demographic it was intended to help.

The Times

FUNDING

£100m Midland Engine fund is launched

Secretary of State for Communities and Local Government Sajid Javid has launched three new equity funds with a combined pot of £100m as part of a major new “Midland Engine” initiative. The cash is aimed at redressing an imbalance in SME funding across the region. Mr Javid, the ministerial champion for the Midlands Engine, said: “The Midlands Engine already boasts over 14% of the UK’s high-growth businesses and its economy is worth more than £230bn – larger than countries like Denmark. We want to harness its huge potential and help give small firms across the Midlands that much needed boost to grow their business.”

The Birmingham Post

OUTLOOK

Brexit on the minds of small business owners

The latest Daily Telegraph Business Tracker revealed a significant number of companies sharing their thoughts about Brexit on Twitter, with 47% of both positive and negative posts mentioning the subject. It’s the largest amount of Brexit-related chatter recorded by the tracker since the EU referendum. Of the Twitter updates shared over the past four weeks, 15% contained a positive sentiment, while 12% were negative.

The Daily Telegraph

SUPPORT

Former aide to Ed Miliband helping SMEs with HR

The Times’ James Hurley talks to Gemma Tumelty, who runs Bristol-based HR Dept, a network of 61 franchises that help about 6,000 small businesses with people issues. Ms Tumelty worked for former Labour leader Ed Miliband until 2014.

The Times

MANUFACTURING

UK manufacturing output growth remains robust

Manufacturing order books and export order books remained well above their long run averages in the three months to February, despite losing some momentum from the previous month, according to the latest monthly CBI Industrial Trends Survey. Demand in the manufacturing sector should continue to be buoyed by the lower pound and buoyant global economy, the survey said. However, Anna Leach, CBI head of economic intelligence, added: “With the Brexit negotiations reaching a critical juncture, many businesses are concerned about future barriers to trade and are looking for clarity over the future relationship with the EU.”

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EXPORTS

Top SME exporters ranked

The Sunday Times publishes the Lloyds SME Export Track 100, which ranks Britain’s 100 SME companies with the fastest-growing international sales over the latest two years. UNiDAYS student verification services tops the list, having achieved average international sales growth of 299.32% pa. More than two-thirds (69) of this year’s 100 are making their first appearance on the league table, including nine of the top 10. Collectively, the 100 generated overseas sales of £744m, up by 80% a year on average in their latest two years. They have taken on 2,700 new staff to employ a total of 7,900.

The Sunday Times, SME Export Track 100

REGULATION

SMEs unprepared for GDPR

The Federation of Small Businesses (FSB) has warned that 90% of small firms are unprepared for the introduction of General Data Protection Regulation. The FSB has found that 33% of small businesses have not even started preparing, while 35% are in the early stages and only 8% have completed their preparations.

City AM

ECONOMY

Economy grows less than expected

According to the Office for National Statistics (ONS), the UK economy expanded by less than previously thought in the last three months of 2017 due to slower growth in production industries. GDP grew by 0.4% in the October-to-December period, the ONS said, down from the initial estimate of 0.5%. “A number of very small revisions to mining, energy generation and service were enough to see a slight downward revision to quarterly growth overall,” said ONS statistician Darren Morgan.

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OTHER

Retail shift gives high street hope

The Sunday Telegraph analyses changes to Godalming high street over several decades and how the area offers hope for the future of town centres. Currently, of the 204 shops, 70% are independent, while the Surrey market town’s vacancy rate falls well below the 14% average. Tim Downing of Pygott & Crone says that while online shopping is slowly taking custom from out-of-town retail parks, there is “a movement of shoppers wanting to deal with retailers on a smaller scale,” meaning renewed interest in local offerings.

The Sunday Telegraph