Andrew Rowe, a partner with Baldwins, on how Teesside can bounce back from Covid…
The Sunday Times recently reported that when confronted with around 3.5m job losses if the country does not reopen over the summer, Boris Johnson apparently responded with considerable shock.
The prospect of soaring unemployment must surely have been at the forefront of the government’s decision to announce the next stage of easing of lockdown and the unveiling on Wednesday of a further range of initiatives to stimulate the economy..
The “one-metre plus” rule, in particular, now means that we are all able to legally enjoy a drink in the pub and finally have our hair cut by a professional.
This should have a major positive impact on the hospitality and well-being service industries, even if venues can still only operate at around 70 per cent capacity.
Further hot summer days will help boost trade for those venues with outdoor areas and the reduction of VAT from 20% to 5% together with the August voucher scheme will provide welcome relief to hard-pressed hospitality businesses.
At Baldwins, we have looked at the Covid-19 crisis with our clients in three phases – Survive, Revive and Thrive.
Accessing government support via rates and wages grants and obtaining tax and loan repayment holidays was the initial ‘Survive’ phase.
We have actively supported businesses in obtaining several million pounds in CBILS and bounce back loans to ensure they have enough liquidity to make changes to their business model.
This involved preparation of cash flow forecasts with ‘what if?’ scenarios, right through to the completion of forms on their behalf, all done remotely.
We are now working hard on the next ‘Revive’ stage as businesses plan for the new normal – how they interact with customers and suppliers and how they can make that work and most importantly become profitable, at which point we will be working with our clients on the ‘Thrive’ phase.
At Baldwins, we were already well versed in digital working. Given our widespread use of cloud technology, we were able to move to remote working quickly and seamlessly.
We listened to our teams and moved swiftly to accommodate their individual needs to work more flexibly, especially those with childcare responsibilities.
We are now gearing up for a safe, staged return to office working, which will include new policies that will allow our teams to work safely on-site at client premises.
What might the government do next?
The UK has one of the highest VAT rates in Europe, so we do expect that there might be a cut in VAT as there was in 2008 to stimulate consumer spending and possibly some sort of scrappage scheme to encourage new car purchases, together with further support to encourage a move to electric vehicles.
The reduction in VAT is a major boost for the hospitality sector and we may also well see a relaxation of licencing laws to enable businesses to work more flexibly.
What about Teesside?
On Teesside we are incredibly lucky to have the Tees Valley Combined Authority with a business-focused mayor in Ben Houchen.
When combined with new council leaders across the area, who want to work closely with businesses, it fortunately means that nothing is off the table.
We as professionals, will be working hard to support our clients needing to access support from the local authorities and present business cases that are easy to say “yes” to.
For example, we recently helped a digital client obtain significant grant support from Tees Valley Business Compass to enable them to expand and move to the Albert North digital cluster in Middlesbrough. This will enable them to create 20 high-level, well-paid jobs in central Middlesbrough.
The grant support will have a positive impact on the wider local economy by generating trade for local businesses to creating opportunities for those studying at local colleges and university.
In addition, we are supportive of Middlesbrough mayor Andy Preston’s plans to attract more business to the town centre and are looking to influence this wherever we can.
Times may be difficult, but Baldwins is working hard at every level to ensure our local businesses on Teesside are able to survive the crisis, will be in a position to reopen at the correct time and are able to capitalise on new business opportunities.