COVID-19 Stakeholder Bulletin - 29 April 2020
The business and economic impact of COVID-19 in Hertfordshire
Feedback from Hertfordshire businesses
Local authorities and business representative organisations continue to report inconsistencies in the management of COVID-19 business interruption schemes and small grants programmes. In particular, they highlight the variable performance by mainstream lenders in the delivery of the Coronavirus Business Interruption Loan Scheme (CBILS), but report NatWest to be one of the most “business friendly”. The Federation of Small Businesses’ Legal Helpline received circa 7,000 calls relating to COVID-19 since the outbreak. Members are particularly concerned about not being able to access provision and the repercussions of an extended lockdown. UK businesses are being affected by disruption to international supply chains, caused
by different parts of the world being in various stages of lockdown. Supply chain resilience and the potential need to find suppliers closer to home is a key and recurring discussion point for those advising businesses with international contracts. With UK-EU negotiations taking place in the latter part of last week, businesses are beginning to talk about EU Exit again and the impact this may have. District councils are expressing real concern over how the negatively impacted retail sector will affect town centre vitality. Hertfordshire Growth
Hub is continuing to experience high demand for its services. The average number of weekly enquiries is now 325% higher than in the same period last year and 186% higher than in the period immediately before lockdown on 23 March. As of last week, 316 firms responded to the Growth Hub’s COVID-19 business impact survey, with 61% reported to be in crisis and 36% surviving. Excluding micro-businesses with under 10 employees, 52% of respondents are in crisis and 47% are surviving. ‘Wholesale and retail’ and ‘other service activities’ were the top two responding sectors.
Hertfordshire's contribution to the national effort
Through its Over 70s Community Careline, Stevenage Football Club (pictured) is supporting those in need with food and medicine delivery, community services such dog walking and running errands, a friendly chat line, and a Community Kitchen, which provides sandwiches to staff at Lister Hospital and to vulnerable locals. Bio Products Laboratory, based in Elstree, is pooling its expertise with CSL Behring, Takeda, Octapharma, Biotest and the pharmaceutical group LFB to help accelerate the development of a potential COVID-19 hyperimmune therapy. Hertfordshire County Council has redeployed 849 employees to work in critical services to fight COVID-19. Around 270 public health clinicians
have moved to frontline NHS roles, 17 on-call firefighters have been trained to drive ambulances, and 562 staff from suspended council services are being redeployed to COVID-19 response roles across adult social care, administration and community support. The University of Hertfordshire is producing and donating face shields for the NHS using 3D printers. Fuel tanker delivery drivers from Hoyer’s Petrolog depot in Hemel Hempstead have volunteered and been trained to deliver medical grade oxygen to hospitals treating COVID-19 patients. Brewer and pub operator McMullen & Sons (Hertford) is opening one in 10 of its managed pubs to offer fresh produce from its suppliers at cost to support
NHS staff and key workers. The company is also hosting daily online cooking lessons, quizzes and courses for the local community. Nemco Ltd (Stevenage) and Peak Production (Letchworth Garden City) have worked together to fast-track the design and build of test rigs for Thales UK. The rigs help test the functionality of Thales’ Printed Circuit Board Assemblies used to build ventilators for the NHS. Hertfordshire Growth Hub client Badges For Life (Borehamwood) has started making and selling NHS Hero badges, with profits going towards a fund for NHS workers. The Growth Hub is helping raise awareness of the initiative, which has been endorsed by Digital Secretary Oliver Dowden MP, and is connecting the business with local
partners, charities and other organisations.
Hertfordshire business news
With less than 50% of its commercial tenants paying rent, Letchworth Garden City Heritage Foundation’s income has been significantly affected. Excluding the limited rent holiday that has been offered to some sectors, the non-payment of rent could mean that local businesses are incurring longer term liabilities which they, and the Foundation, as their landlord, may be unable to meet, particularly in the case of an economic recession. Tring Winery, which had been open for less than two months when the pandemic hit, has adapted to lockdown by moving its tasting events online, with individual portions of wine delivered to customers ahead of each event. Demand for Meals on Wheels delivered by
Hertfordshire Independent Living Service has soared by 500% since lockdown. In March, the number of delivery routes in the St Albans area rose from 15 to 17 and the number of referrals rose from a monthly average of 15-20 to 89. 1,800 meals are now being provided across the county per day, with over 100 volunteers helping make deliveries. Lockdown stockpiling has helped boost sales and profits at St Albans-based Premier Foods (pictured), with trading profit for the year ending 28 March expected to be at the top end of the market’s expectations. Sales in the final quarter are expected to have grown about 3.6% year on year, with a 10.5% increase in March. The short-term peak in volume in March sent shares up by almost 30%. Fabrication and welding
firm Stortford Sheet Metal in Bishop’s Stortford has secured a £200,000 funding facility to manufacture medical boxes for the NHS Nightingale Hospital in London. The business has produced over 400 medical boxes so far that will act as crucial pieces of hospital equipment. Arkley Golf Club in Barnet has been sold to London property developer U+I for £300,000. U+I now has six golf courses in its portfolio. The Chief Product Office and Chief Technical Officer at Imagination Technologies (Kings Langley) have rescinded their resignations after receiving assurances about the company’s future ownership. This follows an attempted boardroom coup by China Reform Holdings. Imagination’s former Chief Executive resigned
earlier this month. Online tuition provider TLC Live (Bishop’s Stortford) is successfully scaling up operations due to increasing demand from schools and parents during lockdown, despite struggles to get fully qualified teachers DBS checked and trained to use the online platform quickly. Tewkesbury-based Trackwise Designs has acquired circuit board design and manufacturing company Stevenage Circuits for up to £2.5 million. The deal enables Trackwise to increase the production of its improved harness technology, expand its customer base, and boost technical, sales, and operational expertise. Watford Borough Council reports that significant inward investment has been
secured, with a business new to the borough signing a contract for premises totalling 30,000 square feet. Housebuilder Taylor Wimpey (Borehamwood) is set to start a phased return to construction from 11 May, following the closure of its sites on 24 March. A new digital reservation process has boosted its order book for 1 January to 23 April 2020, with total value rising to £2.67 billion from £2.39 billion for the same period last year. Eight Hertfordshire businesses have won Queen’s Awards for Enterprise, all under the International Trade category. These include: Brogan Group Holdings (Welwyn Garden City), Buddi Limited (Rickmansworth), Peerless-AV Limited (Watford), QHi Group Ltd
(Harpenden), SA Designer Parfums Limited (Watford), Silent Sentinel Limited (Ware), Prop Store (Rickmansworth) and Innovative Trials (Letchworth Garden City). Learn more.
Impact on the self-employed and small business owners
Wenta’s petition to extend grants to businesses that fall outside Small Business Rates Relief has secured 18,000 signatures which means that the Government is now required to respond. In its study of Companies House and FAME data, the Enterprise Research Centre found a 70% increase in company dissolutions in March 2020 compared to March 2019, driven largely by young firms which are the most vulnerable. The sectors particularly influenced are Wholesale & Retail, Professional Services, Transportation & Storage, Information & Communication and Construction. Funding scheme update Small and rural businesses, and those in the retail, leisure and
hospitality sectors, can apply now to receive grants to help with the ongoing costs of Coronavirus. Check whether you are eligible for a grant using the Government's Financial Support Finder tool, then visit your local council’s website: Broxbourne; Dacorum; East Herts; Hertsmere; North Herts; St Albans; Stevenage; Three Rivers; Watford; Welwyn Hatfield Register to join the Government's webinar on financial support for small businesses during COVID-19 on Tuesday 5 May at 11am.
The UK Purchasing Manager’s Index (PMI) hit a new low in April 2020, signalling the serious economic impact of Coronavirus. The UK flash IHS Markit/CIPS composite PMI slumped from 36.0 in March to just 12.9 in April. Before March, the lowest figure in the survey's 22-year history was 38.1, reached in November 2008. Historical comparisons of the PMI with GDP indicate that the April survey is consistent with GDP falling at a quarterly rate approaching 7%. The PMI indicates record falls in output across both manufacturing and services that have been accompanied by job losses on an unprecedented scale, even if furloughed workers are excluded. Four fifths of the UK service companies surveyed by Markit reported a drop in activity this month, as did 75% of manufacturers. Pricing
power also collapsed alongside the slump in demand, leading to the largest drop in average prices charged for goods and services ever recorded by the survey.
Housing: Data from estate agent comparison website GetAgent.co.uk indicates that the property market in several Hertfordshire districts has been hit harder than almost anywhere else in the UK by lockdown measures. Three Rivers saw a steep decline of -94% in new homes listed for sale between 23 March and 14 April, followed by North Hertfordshire (-92%) and St Albans (-91%). Woking had the largest drop at -95% and West Lancashire had the smallest at -25%. Manufacturing: A survey of CBI members indicates that COVID-19 has had a negative impact on the domestic output of four-fifths of firms. Three quarters of manufacturers reported negative impact on international output. Half of manufacturers reported partial shutdown or closure. Just over half of
manufacturers mentioned that they temporarily laid off staff, but only one in 20 reported permanent layoffs. Around two-thirds of firms have faced cash flow difficulties. Manufacturing in Hertfordshire accounts for 5.2% of jobs (34,000) and 9.4% of economic output. Aviation: In a letter to workers, Airbus warned that it is ‘bleeding cash at an unprecedented speed’. The company announced its decision to cut aircraft production by a third earlier last week. Stevenage is home to Airbus Defence and Space, which manufactures advanced satellite and telecommunications systems. At present, there is little indication that this will be affected by the difficulties facing the aviation industry.
Tourism and leisure: Businesses are starting to plan for the gradual lifting of restrictions and are vocal about the need to bring both supply and demand back up to full capacity. Some seasonal businesses are indicating they may not open at all this year depending on how and when restrictions are lifted, especially those that rely on volume and the gathering of groups. Paradise Wildlife Park in Broxbourne is missing out on its peak trading period between Easter and the end of the summer holidays, which brings in the revenue needed to help it get through the winter. Management expects it to take ‘a couple of years’ before the park returns to its pre-pandemic position and has put on hold its 10 year masterplan to improve its site. The park has not made any redundancies. Visit Herts is running a survey on the impact of COVID-19 on visitor economy businesses in Hertfordshire. Feedback will be used to develop a recovery strategy to be fed into Government, and included in its response to the DCMS Select Committee on the support needed by the industry. Business events is an important sector in Hertfordshire and is likely to be one of the last to recover. Results from a national survey by the Business Visits & Events Partnership
on the impact of COVID-19 on the sector indicate that 50% of respondents believe it would not return to normality for at least 12 months. Hospitality: Senior Minister Michael Gove has confirmed that restaurants, hotels and pubs will be among the last businesses to re-open from lockdown. Many pubs, including Dylans Kings Arms (St Albans), have voiced concerns over potentially not opening until September, or in the worst case, next year, with Christmas being one of the most important trading periods for the sector. Businesses have raised concerns that grants and rates relief offered to retail, leisure and hospitality companies do not apply to those further down the supply chain, such as breweries. Locally,
while the retail and hospitality sectors remain the most impacted, Hertfordshire Chamber of Commerce has reported signs of shortages of printing materials among printers.
More than 4 million jobs have been furloughed since the UK Job Retention Scheme opened for applications on 20 April, accounting for 12% of UK unemployment. According to the ONS Business Impact of Coronavirus Survey, the highest proportion of the workforce being furloughed was recorded in the accommodation and food service activities industry (80%) and in the art, entertainment and recreation industry (68%). Nationally, there were 1.4 million new registrations for Universal Credit between 16 March and 14 April (28 days). If all registrations became claimants, this would represent a 111% increase in claimant unemployment. If Hertfordshire’s claimant unemployment increased at the same rate,
it would go from 14,100 in February to 29,900 in April, or an increase in the claimant rate from 1.9% to 4%. The Institute for Employment Studies has estimated that there have been between 1.5 and 2 million jobs lost due to COVID-19, with unemployment increasing to at least 2.5 million, or 7.5% of the workforce. A new report from the Resolution Foundation shows that women, low-paid workers, younger employees and parents are being hit particularly hard. The research calculates that women make up a majority of ‘key workers’, which means they run a greater risk of exposure to the virus as they are not isolating. Those key workers are often relatively low paid. The research also demonstrated that the economic impact of the virus is not equitable, with younger adults or
those on low pay being more likely to have experienced job loss or have been furloughed. Research indicates that those in shutdown sectors are younger – their average age of 39 is four years below the average age of those who are able to work from home. Local data suggests that all occupation groups are posting fewer job vacancies in the last 30 days bar the protective services (security) industry.
Support available in Hertfordshire
How your business can help
Message from HM Lord-Lieutenant of Hertfordshire Robert Voss CBE CStJ Thank you for all your wonderful donations. The demand from the NHS and hospices is unlimited as COVID-19 continues to attack us. We are now widening our support to include the seven hospices serving the people of Hertfordshire. Their lists will be available shortly. In the meantime, please continue to download these wishlists from East and North Herts NHS Trust, West Herts Hospitals NHS Trust and Princess Alexandra Hospital Harlow. The Lord Lieutenant’s Office is centrally co-ordinating all donations. Please email lieutenancy.office@hertfordshire.gov.uk with any offer of support you can give. Donations and providers of Personal Protective Equipment – updated guidance Hertfordshire businesses have responded generously and donations of PPE, as well as contacts from organisations offering to supply PPE for frontline workers, have been received which is very much appreciated. To help speed up the process of enquiries, the Local Resilience Forum has created a web page with updated guidance and appropriate checklists to ensure that all PPE offered meets the necessary standards to protect our front-line workers and the people they are caring for. These regulations
apply equally to products that are sold or donated.
With thanks to Hertfordshire Growth Hub, Visit Herts, Hertfordshire Chamber of Commerce, the Federation of Small Businesses, and the Institute of Chartered Accountants England and Wales.
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