COVID-19 Stakeholder Bulletin - 1 July 2020
The business and economic impact of COVID-19 in Hertfordshire*This bulletin will now be published bi-weekly, as we move from response to recovery.
Feedback from Hertfordshire businesses
The British Chamber of Commerce is in talks with Government on whether plans will be made for schools to open over the summer period to allow key/emergency service workers to carry on with their duties. Child care provision is also an ongoing concern of businesses looking to get back to 'normal'. There is further evidence of the pressure on local authority finances as new estimates indicate that the cost of Hertfordshire County Council's response to COVID-19 will reach £73.1m by the end of September. This £9m increase from previous estimates would leave the council with a predicted funding shortfall in excess of £25m. District authorities are also taking a hit from a decline in car park revenues, among other things. There are ongoing discussions on whether
council-owned car parks could be made free for a period to encourage more footfall to high streets. Anti-fraud software has revealed a very small number of dubious claims among the circa 1,600 applications for small business grant funding in St Albans. Investigations are being carried out and anti-fraud mechanisms continue to be used to root out suspect claims. A survey conducted by Redwood Bank shows that nearly half of small businesses in the UK are being forced to rely on savings to help stay afloat during the Coronavirus pandemic, with 17% having withdrawn at least £10,000 from savings, 7% over £50,000, and 3% over £100,000, equating to an estimated total of £2.4bn savings withdrawn. Funding available
in Hertfordshire Volunteer Business Support Scheme: LEP funded - advice and support from a network of business mentors for firms adversely affected by COVID-19. Hertfordshire Business Expansion Grant Scheme: ERDF & LEP funded - grants of £10,000 - £100,000 to incentivise SME investment in capital equipment. Crowdfund Hertfordshire: Small Business Innovation Fund: LEP funded - grants of up to £5,000 for small/micro businesses in tourism, leisure, hospitality, retail, arts and culture. Herts LEP SME Growth Loan Scheme: LEP funded – loans of £200,000 – £500,000 available to established SMEs in Hertfordshire that require finance to implement expansion activities that will deliver
substantial growth. Low Carbon Innovation Fund 2: ERDF funded - a £22m+ tri-LEP investment initiative led by the University of East Anglia and Norfolk County Council, to support SMEs that are making a positive impact on greenhouse gas reduction through the development of innovative technologies, products or services. More Hertfordshire and UK-wide funding opportunities are available. Businesses struggling to access funding can register with Hertfordshire Growth Hub to explore over 1,000 live funding opportunities via its GrantFinder portal, which can be found within the Knowledge Bank.
Hertfordshire business news
Intu Properties appointed administrators on 26 June, putting its portfolio of shopping malls, including Intu Watford (pictured), at risk of closure. Watford Mayor Peter Taylor has asserted that as the owner of the freehold, Watford Borough Council, which also owns a small percentage of Intu Watford, would need to give consent to any changes to the long leaseholder, putting it in a good position to help shape future arrangements and protect local jobs. Chemicals and pesticides manufacturer PheroSyn Ltd, located at Rothamsted Research in Harpenden, has been awarded a £140,000 grant as part of the SHAKE climate change programme. PheroSyn looks to scale up the production of pest insect pheromones that can be deployed to protect crops and
reduce the use of pesticides and associated fossil fuel consumption. Developer Chancerygate has sold the freehold of the Tewin Court industrial estate in Welwyn Garden City - a 20-unit site spanning more than 87,000 sq. ft. It has been acquired by real estate funds managed by Blackstone for an undisclosed sum. Willmott Dixon has been awarded a contract on a £33m special school programme. The Letchworth-headquartered company has been selected by Wiltshire Council as its construction partner to build a school that provides up to 400 places for children with special educational needs and disabilities (SEND). Amazon has launched a free Small Business Accelerator programme in
partnership with Enterprise Nation (London) to help businesses deal with the economic impact of the COVID-19 lockdown. Hertfordshire businesses are encouraged to sign up by Amazon’s fulfilment centre in Hemel Hempstead. The nation’s largest cinema chain Odeon has announced plans to start re-opening its cinemas from 4 July, with 88 to re-open by 16 July. Odeon Hatfield will be opened as part of the third wave on 13 July. Meanwhile Cineworld has postponed its planned re-opening from 10 July to 31 July, citing recent adjustments to the schedule of upcoming movie releases. Directory Enquiries Service, 118 448, has signed a contract with a Hemel Hempstead call centre provider Pod (People On Demand) to handle its inbound directory
assistance calls. The deal is expected to create 30 new jobs locally. Pod provides outsourced call centre services to over 1500 clients worldwide. Pepe’s Piri Piri, a rival restaurant chain to Nando's, headquartered in Watford with 112 branches across the UK, is preparing to open a further eight stores despite the COVID-19 pandemic, including one in Scotland set to open in July. Its success affirms a recent report by the Financial Times that chicken shops rule the UK high street. A 2017 report by research firm Mintel estimated that UK customers would spend £2.6bn in chicken outlets by 2022, however sales had already increased to £2.3bn last year. There are now only three UK postcode districts that do not have a chicken shop.
The IMF predicts the Coronavirus crisis will have an even bigger impact on the global economy than initially thought. It has forecast a global economic contraction of 4.9% this year, with the contraction particularly high in Italy (-12.8%), Spain (-12.5%) and France (-12.5%). The HM Treasury average of independent forecasts (June) suggest that there will be an 9.2% economic contraction in the UK in 2020 followed by 6.5% growth in 2021. Revised ONS figures show that the UK’s economic output shrank by 2.2% in the first quarter of 2020, and by 6.9% in the month of March. This is a downward revision on the initial estimate of a 2% decline in Q1 and a 5.8% decline in March - and is the joint-worst quarter since 1979. UK households consumption spending decreased by
£9.5bn (falling 2.7%) in Q1 2020, the largest quarterly fall in nominal household spending of this type ever recorded.
Aviation: European aircraft maker Airbus has warned that the COVID-19 pandemic will wipe out around 40% of its planned production levels in 2020 and 2021, and that it could take until 2025 to return production to pre-crisis levels. On 30 June, Airbus announced plans to cut 15,000 of its circa 134,000 jobs worldwide, with 1,700 jobs to be cut in the UK. The company has said the UK cuts would be contained to its commercial aircraft division across sites in Broughton (Flintshire) and Filton (Bristol). The Airbus Defence and Space facility in Stevenage is not expected to be affected. Tourism and hospitality: Visit Herts reports that businesses just above the £51,000 business rates level are continuing to express concerns about their ability to persevere. Hotels with 10 – 15 rooms and larger restaurants will find it easier and quicker to ramp up, however they are also the businesses that are under threat. Visit Herts will raise the issue at the upcoming Tourism Industry Emergency Response Group (TIER) meeting. Visit Herts is also calling for: clarity from Government on how businesses will be liable for the enforcement of current guidance on public behaviour; advice on GDPR in relation to pubs and restaurants needing to hold a register of customer details for 21 days; and more advice on
implementing social distancing and other requirements for various disabled groups. Retail: The fragility of the retail sector was brought into stark relief last week as Intu, the UK’s largest shopping centre owner, collapsed into administration. Intu's underlying group operating companies remain unaffected and all shopping centres are continuing to trade. Intu owns 14 of the UK's best known malls and directly employs around 3,000 people. Conversely, Tesco, the UK’s biggest supermarket chain, headquartered in Welwyn Garden City, reported that UK sales at established stores rose 8.7% in the three months to 30 May with sales of food increasing by 12%. Clothing sales fell by one-fifth. Online sales rose by 48.5% and sales in convenience stores
increased by 10%. Tesco brought in 47,000 new workers during the lockdown to help with increased demand. Finance: The Bank of England reported that the number of mortgage approvals for house purchase fell to just 9,300 in May, down from around 15,800 in April – down from the usual average of 25,000 per month for this time of year. Overall, this is the lowest level since comparable records began (in 1997). Approvals for remortgaging have also fallen, to 30,400, over 40% lower than in February.
ONS analysis of VAT payments (VAT diffusion index) reveals that from March to April 2020 more firms had decreasing turnover than increasing, and there was a decrease in companies paying VAT for the first time. This was driven by declines in all the major sectors: services, construction, production and agriculture. The number of new business registrations for VAT is also below the five-year average.
Between 29 May and 5 June 2020, total online job adverts (Adzuna) across all industries have increased marginally from 45.1% to 45.6% of their 2019 average. This is the third consecutive week of a small but continued increase from mid-May. However, the volume of job adverts in catering and hospitality has declined further to a record low of 18.1% of its 2019 level, and the category of education has also seen a notable decline in the volume of online job adverts.
Support available in Hertfordshire
The Community Reassurance Cell, part of the Hertfordshire Local Resilience Forum, is looking for community experts to take its Community Impact Assessment Questionnaire to identify those in Hertfordshire that are adversely impacted by Coronavirus and to help shape local recovery. The survey closing date has been extended to 31 July. Hertfordshire Growth Hub's COVID-19: Respond, Adapt and
Strengthen survey is taking stock of how Hertfordshire businesses are dealing with the pandemic. Give your feedback to help shape the business support services that will be provided in the county over the coming weeks. 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 widening our support to include the seven hospices serving the people of Hertfordshire - download the hospice wishlist, as well as 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, the Institute of Chartered Accountants England and Wales, and Wenta.
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