FINANCE

RBS bosses blamed for mistreatment of small firms

A report into Royal Bank of Scotland’s mistreatment of small firms is highly critical of top bosses at the bank for chasing profits at the expense of distressed businesses. The findings of the Financial Conduct Authority’s investigation into RBS’s now-defunct turnaround unit Global Restructuring Group (GRG) have been revealed in a leaked copy of the report, after the FCA said it could not meet a deadline to publish. The document reveals further “widespread” mistreatment of firms by the GRG and blames management for creating an “endemic” culture prioritising commercial targets. The GRG executive committee is also criticised for giving “scant attention” to turnaround objectives being hit.

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Carillion accused of flouting prompt payment code

Small businesses have accused Carillion of withholding money as security on work in order to defer payments to suppliers and bolster its own balance sheet. The failed contractor is said to have taken up to 120 days to pay subcontractors despite being signed up to the Government’s prompt payment code. Emma Mercer, Carillion’s most recent finance director, told MPs at a parliamentary select committee last week that in reality the average payment time for suppliers was 43 days last year, and that those who were waiting as long as 120 were “outliers”, accounting for less than 5% of contracts.

The Daily Telegraph

FSB launches fintech funding platform for SMEs

The FSB has launched a new fintech platform to provide small businesses and self-employed people with greater access to funding. The FSB Funding Platform aims to help potential borrowers get access to funding by matching them with more than 100 money providers. FSB London Chair Michael Lassman said: “Although it’s harnessing the latest innovations in tech it offers a very simple way to access finance, as well as access to human financial advisers.”

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INVESTMENT

May needs to make EU relationship vision clear

In an open letter to UK prime minister Theresa May, Francis Martin and Adam Marshall of the British Chambers of Commerce demand the government makes “a clear, unequivocal statement of intent” about the UK’s future relationship with the EU so companies can make investment and hiring decisions. “Even among the many optimistic, future-oriented firms – those that see opportunity in change – patience is wearing thin,” they say, adding “Clear UK negotiating objectives are crucial to both business and public confidence.” Meanwhile, the CBI has warned that the government’s plans for post-Brexit customs arrangements were unworkable and costly for British business. The CBI is calling for the government to keep Britain inside the existing customs union with the EU stating that maintaining “frictionless trade” is the number one priority for British business since the EU is the UK’s largest export market for goods.

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Record start-up investment in 2017

A record £8.27bn was invested in UK start-up businesses last year according to data from research firm Beauhurst. Despite fears that Brexit may have discouraged FDI, foreign cash was a key driver, backing 23 of 29 megadeals – investments of more than £50m. Stephen Welton, CEO of the Business Growth Fund commented: “More and more business owners are recognising that with strong financial backing and genuine support there are as many opportunities as challenges, and that growth is out there.”

City AM

Brexit pushed down business investment, says BoE

Analysis by the Bank of England shows businesses spent as much as £7.7bn less on new factories and equipment in the year after the EU referendum because of Brexit uncertainty. The survey of 1,200 companies, published with the Bank’s quarterly inflation report last week, suggests corporate investment was about 3%-4% lower in the 12 months to June 2017 than it would have been – a loss of between £5.7bn and £7.7bn.

The Sunday Times

£50m fund to whet start-ups’ appetite

Restaurant start-ups are set to receive a £50m cash injection from investors including the British Business Bank. The government-backed lender has ploughed £30m into a new fund launched by Imbiba, the specialist leisure investor backed by serial restaurant entrepreneur John Connell.

The Sunday Times

Tech firms strike out

The Sunday Times highlights the growing number of tech start-ups that are thriving outside of specially curated networks such as Silicon Roundabout in east London and Cambridge Science Park. Firms are looking further afield as rents in Tech City’s heartland of Shoreditch become prohibitively high.

The Sunday Times

Venture investment in UK fintech more than doubles

New data shows fintechs raised $1.8bn of venture capital investment last year, up more than 150% from $704m in 2016. SME lender OakNorth and Funding Circle were among the top raisings.

Financial Times

REGULATION

A third of directors unaware of GDPR

The Times looks ahead to the general data protection regulation (GDPR) which comes into force on May 25^th, noting a survey by the Institute of Directors shows that nearly a third of directors are unaware of the changes it brings. Stephen Bailey of the cybersecurity consultancy NCC says: “We’re surprised at how little notice business owners have taken of GDPR.” He adds that the Information Commissioner’s Office will accept no excuse for firms that do not make data easily searchable “as there’s been two years to prepare.”

The Sunday Times

MANUFACTURING

North Sea shutdown hits production but manufacturing continues to expand

Manufacturing output rose 0.3% in December as the sector grew for the eighth month in a row – the best run since the eighties though overall industrial production was hit by the closure of the Forties pipeline. Ole Black, senior statistician at the ONS, said: “Manufacturing continued to grow strongly in the last three months of the year, with metal goods and pharmaceuticals driving growth.”

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Manufacturing skills hub created

A group of engineering firms have invested in their own training hub to combat the chronic skills crisis facing British industry. The Marches Centre of Manufacturing and Technology (MCMT) in Bridgnorth, Shropshire, is designed to secure a talent pipeline of apprentices and upskilled workers, stop poaching and create product development openings. Additional backing has come from Shropshire Council and the Marches Local Enterprise Partnership.

Daily Express

OUTLOOK

Firms consider London exit as costs rise

The London Chamber of Commerce and Industry says a combination of uncertainty over Brexit negotiations, rising rental prices and high business rates are driving hundreds of businesses out of London. Over the past year, one in five businesses in the capital had moved or were thinking of relocating in London or quitting the city. Many companies in London have been affected by last year’s overhaul of business rates, with some firms facing rate rises of 40%.

The Times

TRADE

Fox plans culture of exporting

Writing in the Sun, Liam Fox hails figures showing that exports of UK goods increased by 15.9% and services rose by 11.6% to £617bn in the year to October 2017. The international trade secretary says this success will be built on with the government’s new Export Strategy, which will develop “a culture of exporting among firms from every part of the UK.” The strategy, due to be completed in the spring, will include additional financial support for UK firms, face-to-face support from expert trade advisers, and a guide to new markets. New figures from the ONS show UK exports rose 11.3% by £62bn to £617bn in the first full-year results since the referendum, with the overall trade deficit narrowing by 17.3% from £40.7bn to £33.7bn.

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EU plans to cut UK’s market access if Brexit transition terms broken

A leaked legal document drawn up by the EU reveals how Brussels will punish the UK if it does not comply with rules during the transition period. Instead of taking Britain to court, the EU would be able to impose sanctions, effectively cutting the UK off from parts of the single market. The Transitional Arrangements in the Withdrawal Agreement paper makes clear Britain will have no say on new regulations and could only sit in on meetings under exceptional circumstances. The document also suggests extra payments to the EU budget, beyond what was agreed last year, may be required. A spokesman for the Department for Exiting the European Union said: “This is a draft document produced by the EU that simply reflects their stated directives.”

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ENTREPRENEURS

Cornish recipe for better productivity

The Times examines how entrepreneurs in Cornwall, branded Britain’s least productive region, are leading an initiative to help small businesses to expand. They have formed the Cornwall Hospitality Cluster, a group of local employers that have agreed to share information on what they are getting right and wrong in the hope everyone can improve.

The Times

Third of small business owners expect to work past 70

One in three small business owners expects to work past the age of 70, according to a survey by Aldermore Bank. Almost three quarters of owner-managers believe that they will be working beyond 65, although two thirds say that they would prefer to have retired by then. And one in ten respondents to the survey expected never to be able to retire. Furthermore, one in seven respondents said that they would sell their business or property to finance their retirement.

The Times

TAX

HMRC payroll investigations raise £800m

HMRC collected £819m in additional tax through payroll investigations last year – a 16% increase on the additional tax generated in 2015/16. Investigations into the payrolls of large businesses specifically generated £503m in additional tax in 2016/17, up 31% from £383m the previous year, as the Revenue continued to crack down on organisations that wrongly classify workers as self-employed.

Personnel Today

EMPLOYMENT

Gig economy workers to receive holiday and sick pay

The government is to give gig economy workers new rights including holiday and sick pay for the first time. Its Good Work plan is in answer to last year’s Taylor Review which recommended changes in conditions to reflect modern working practices. The right to holiday and sick pay will be enforced for the first time by HMRC. The government will also ask the Low Pay Commission to consider a higher minimum wage for workers on zero-hour contracts, and says it may also repeal laws that allow agencies to employ workers on cheaper rates. However, workers, trade unions and Labour were disappointed that the government has only pledged to consult on possible changes to the use of self-employment. The Institute of Directors said the government should have gone further and reformed National Insurance. Stephen Martin, director general of the IoD, said: “The lack of action on tax reform is a wasted opportunity. The different tax treatment of the employed and self-employed has bee n a driving force behind the rise in self-employment in recent years, but tax treatment should not determine a person’s choice of employment status.”

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Doctors issuing thousands more ‘fit notes’ for patients

The number of ‘fit notes’ issued by UK doctors rose by 9% to 1.4m between July and September 2017, with a larger increase for mental health problems, according to NHS Digital figures. The Statement of Fitness for Work, also known as the Med3 form, enables doctors to give medical evidence to employers or support a claim for health-related benefits. The statement of fitness can detail to what degree the patient is “unfit for work” or “may be fit for work subject to the following advice,” with accompanying notes on suggested adjustments or adaptations to the job role or workplace. The research, carried out by the GPs’ magazine Pulse, found that many doctors believed that the notes were not understood and that employers ignored their advice. Doctors also complained about the amount of time that the paperwork took.

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Tesco equal pay case may spark wave of claims

The UK’s biggest retailers could see a wave of equal pay claims after it emerged that Tesco is facing a potential bill of up to £4bn in back pay for thousands of employees. Experts says that pay discrepancies are common across the UK retail sector, and that the issue of remuneration could soon engulf other supermarket chains. Nearly 100 shop assistants and cashiers at the supermarket chain, who are mostly women, are seeking to be paid the same as their colleagues in Tesco’s warehouses, predominantly men, in what could be the largest ever equal pay case the UK has seen. Leigh Day, the firm which is bringing forward the legal action, said distribution centre workers earn more than £11 an hour, leaving them £5,000 a year better off than the shop assistants, who are on £8 an hour. It is thought the underpayment could apply to around 200,000 workers, who might be owed £20,000 each.

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ECONOMY

UK growth upgraded

New figures from the National Institute for Economic and Social Research show Britain’s economy will grow by 1.9% this year and in 2019 as confidence in the Brexit negotiations improves in combination with a strong global economy. The figure is up on the previous forecast of 1.7%. Threats to the forecast include a breakdown in Brexit talks and trading under WTO rules and a spike in wages without a corresponding rise in productivity.

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