February 2009

NEWS

Bank of England cuts interest rates again to 1 per cent
Having already cut interest rates in January to 1.5%, the lowest level in its 315-year history, the Bank of England made a further rate cut on 5 February, by half a percentage point to just 1 per cent. The Bank has now reduced rates five times from October 2008’s level of 5 per cent. The cut was good news for borrowers, with leading banks promising to pass on the reduction to mortgage holders, but less welcome for savers. The pound, which has fallen steadily in recent months, rallied slightly after January’s cut, but in early February stood at $1.45 to the US dollar, 25 per cent lower than its peak last summer.

In other developments, the rate of inflation in the UK fell in December at its fastest rate since 1992, as Chancellor Alistair Darling’s cut in VAT came into effect and stores offered big discounts in an attempt to attract customers in the run-up to Christmas. The consumer price index dropped to an annual rate of 3.1 per cent, compared with 4.1 per cent in November, according to the Office for National Statistics. This was higher than the 2.7 per cent predicted by economists, but still a sharp decline.

According to the ONS, the cut in VAT from 17.5 per cent to 15 per cent had the biggest effect in reducing inflation, but lower prices in the shops and falling petrol prices also contributed. The categories showing the biggest declines were clothing and footwear, with prices down 10.3 per cent over the 12 months to December.

Inflation is expected to continue declining rapidly in the months ahead as energy prices fall and last year’s higher food prices drop out of the annual comparison. The retail price index, which includes housing costs and which forms the basis for pay negotiations, fell to 0.9 per cent from 3 per cent in November, after the Bank of England’s big cut in interest rates. This was the sharpest monthly fall since July 1980, and this year the RPI rate is forecast to fall below zero.

Many companies are continuing to struggle, however. Nissan, based in Sunderland, North East England, is cutting 1,200 jobs, or a quarter of its workforce, due to falling sales. Honda in Swindon, South West England has suspended production and sent many of its staff home for four months, while Ford will reduce its UK workforce by 850 by May. Some 400-500 jobs will go at the company’s Transit van production facility in Southampton on the south coast, but it is hoped that most of these will be voluntary redundancies. The administrators of music, games and DVD chain Zavvi closed 22 of the firm’s stores in January, with 178 job losses, and the last remaining Woolworths shops also closed their doors for the final time.

Supermarket giant Sainsbury’s, however, reported its best ever Christmas performance, with sales rising by 4.5% in the 13 weeks to 3 January, compared with a year earlier. Chains such as Asda and Lidl, which target the budget end of the food market, have also done well.


Government unveils support package for business
In mid-January, the Department for Business, Enterprise and Regulatory Reform (BERR) introduced a package of measures designed to address the cash flow, credit and investment needs of small and medium businesses. The support package, which builds upon commitments outlined in November’s Pre-Budget Report, consists of loan guarantees and a new Enterprise Fund aimed at helping companies struggling to access finance for working capital and investment.

The Government measures include a $14.5 billion Working Capital Scheme, which secures up to $29 billion of short-term bank lending to companies with a turnover of up to $725 million, and an Enterprise Finance Guarantee Scheme, which will provide up to $1.9 billion of additional bank loans to small firms with a turnover of up to $36.25 million. In addition, a $108.75 million Capital for Enterprise Fund has been introduced to invest in small businesses in need of equity. Two-thirds of this will come from the Government, with the rest provided by banks.

Unveiling the package, Business Secretary Lord Mandelson said: “We know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to the tougher credit conditions. That is why we have designed a package of measures addressing different forms of credit and providing real help for businesses.”

In order to help businesses identify their financial needs, the Government has also launched a ‘one-stop-shop’ web portal on its www.businesslink.gov website. The portal will direct companies to the most appropriate form of support and help them ascertain their eligibility for a range of government assistance.

Business groups cautiously welcomed the bail-out package, hoping that it would encourage banks to extend credit and save businesses from failure. “The government needed to be bold and it has been. These measures are the essential precursors for economic stability which will expand the availability of credit, open new channels of credit and get the economy working again,” said Richard Lambert, director general of the Confederation of British Industry (CBI).

The British Bankers’ Association also welcomed the move, saying: “[The] package of measures – for which banks will pay -–underline their continuing commitment to helping the UK economy through these difficult times. We look forward to working speedily through the details with the relevant authorities.” According to Mark Swift of EEF, the representative body for the manufacturing industry, the measures will help manufacturers and their customers. “Now, manufacturers will be able to get direct access to finance whether its for investment or whatever, but more importantly their customers will be able to get access to finance as well,” he commented.

In another sign of hope for cash-strapped companies, the European Commission has given in to pressure to temporarily ease its strict competition rules on government subsidies. EU state aid regulations will be relaxed until the end of 2010, allowing member states the power to offer businesses investment of up to $550,000 without having to refer the case to regulators. This is more than double the previous ceiling of $220,000. Governments will also be able to guarantee loans at a reduced premium, lifting the rule that state loans and guarantees must follow market rates. Limits on venture capital offers will rise from $2.2 million to $3.6 million. EU competition commissioner Neelie Kroes said: “These changes are justified given the exceptional economic conditions.”

Meanwhile Mervyn Davies, chairman of Standard Chartered Bank, has been made a life peer and trade minister by Prime Minister Gordon Brown. He will effectively replace the ex-head of the CBI, Digby Jones, who left the Government in the last reshuffle. Mr Davies will add bank experience to the Government at a time of continuing economic difficulties, according to the BBC. As a member of the Business Council for Britain, he had already been advising the Government on its business policies. Lord Davies will be one of seven ministers in the Business, Enterprise and Regulatory Reform (BERR) department, under Business Secretary Lord Mandelson.

Takeover activity in the UK technology sector bucked the trend in other companies and industries in 2008, with the value of transactions rising 10 per cent compared with 2007, according to a report by PricewaterhouseCoopers. The report said that UK companies were involved as buyers or sellers in a third of the world’s technology mergers and acquisitions. Deals in 2008 were worth $23.2 billion, up 10 per cent from the previous year. The results were due largely to a few huge deals in the first quarter of the year; the final quarter of 2008 saw the lowest level of completions since the end of the dotcom bubble in 2002. The largest deals closed last year were Reed Elsevier’s $2.6 billion acquisition of ChoicePoint, the US risk IT group; KKR’s $850 million buy-out of Northgate Information Solutions; and Axon’s takeover by HCL of India for €$807.6 million.

UK universities continue to produce world-class research
The results of the 2008 Research Assessment Exercise (RAE2008) have confirmed the dominant position that universities and colleges in the UK hold in international research. RAE2008, which is administered on behalf of the four UK higher education funding bodies, included the views of international experts in all the main subject areas. The results demonstrate that 54 per cent of the research conducted by 52,400 staff submitted by 159 universities and colleges was either ‘world-leading’ (17 per cent in the highest grade) or ‘internationally excellent’ (37 per cent in the second-highest grade).

Taking the top three grades together (with the third grade representing work of internationally recognised quality), 87 per cent of the research activity submitted was of international quality. Of the remaining research, nearly all was of recognised national quality in terms of originality, significance and rigour.

Professor David Eastwood, chief executive of the Higher Education Funding Council (HEFCE), said: “This represents an outstanding achievement, confirming that the UK is among the top rank of research powers in the world. The outcome shows more clearly than ever that there is excellent research to be found across the higher education sector. A total of 150 of the 159 institutions have some work of world-leading quality, while 49 have research of the highest quality in all of their submissions.”

Of the 2,363 submissions, 1,258 (53 per cent of the total) had at least 50 per cent of their activity rated in the two highest grades. These submissions came from 118 different institutions. Eighty-four per cent of all submissions were judged to contain at least 5 per cent research of world-leading quality, while 150 of the 159 higher education institutions (HEIs) that took part in RAE2008 demonstrated at least 5 per cent world-leading quality research in one or more of their submissions.

According to Times Higher Education, Oxford and Cambridge universities and the London School of Economics emerged as the top performers in the RAE2008 analysis, but some teaching-intensive former polytechnics are also making strong progress.

Regionally, universities were proud of their achievements. The University of Sussex in South East England, for example, was shown to have world-leading research in every single department, and 90 per cent of its research activity was rated as world-leading. On a simple average across all scores, the university now ranks among the leading 30 research universities in the UK. Its American Studies department was rated number one in the country, Politics second and Art History third. In total, 18 subjects across the arts, sciences and social sciences at Sussex were rated in the top 20 in the UK.

In Yorkshire and Humber, 41 of the 49 submissions by the University of Sheffield were rated as either three- or four-star, meaning that they were internationally excellent or world-leading. Nine out of ten of the faculty of arts were given either a three- or four-star rating. The university has been ranked in the top ten institutions in the Russell Group, the association of top UK research-intensive higher education establishments. The University of York once again featured in the top ten in RAE2008. More than half of its academic departments were named in the top ten for their particular area of study, with the majority of departments ranked in the top 20 for research. The department of English and related literature was rated as the best in the country and the university was named as joint top for sociology and health services research.

The University of Leeds meanwhile was rated as the 14th best in the UK for research quality and the eighth best in terms of the power of the research, while 61 per cent of its research was rated as world-class or internationally excellent. As a result, Leeds climbed 12 places since the last RAE, undertaken in 2001 – one of the biggest improvements of any institution.

Universities in the Northwest also performed well. At the University of Liverpool, for example, 53 per cent of research staff were ranked in the highest categories of four-star (world-leading) and three-star (internationally excellent), and the university as a whole was ranked second in the UK for Materials Science. The proportion of world-leading or internationally excellent research activity at The University of Manchester was judged to be 65 per cent, amounting to 1,193 full-time equivalent research staff. The University of Central Lancashire (UCLan) was assessed in 17 subject areas and all were rated as having research of international excellence, 11 of them containing research rated as world-leading. Liverpool John Moores University was assessed as carrying out world-class research in 12 subjects.

In Scotland, the University of Edinburgh came top with 63% of research activity given four or three stars. It was rated best in the UK for medicine, veterinary sciences, IT and linguistics. St Andrews, the University of Glasgow, University of Aberdeen and the University of Dundee completed the top five in Scotland. Of all the research Scotland put forward for assessment, 15 per cent was judged to be both internationally excellent and world-leading. In total, 1,000 Scottish researchers and their supporting teams were considered to be leading the world.

Wales also turned in good results, with 14 per cent of all research activity submitted by Welsh institutions judged to be world-leading and a further 35 per cent assessed as internationally excellent. Education Minister Jane Hutt said: “There are some excellent RAE results for Cardiff and also for Swansea, Bangor and Aberystwyth – but it is also great to see HEIs such as Glamorgan making strides forward, and there are pockets of research excellence in other HEIs across Wales which have been recognised.”


Universities to build further links with business
In other university news, the University of Sheffield in Yorkshire and Humber has been given planning permission to go ahead with the construction of a $17.4 million research institute. It will be used to look into motor neurone disease and will bring together scientists and medical professionals from across the world to try to find a cure for the disease, as well as understand its causes. The university’s school of medicine and biomedical sciences was given a five rating in the RAE2008 report and it looks to provide top-level teaching.

Investors from the Kingdom of Bahrain have formed an alliance with the University of Plymouth, in South West England. The deal is expected to inject tens of millions of dollars into the city’s economy, as well as attracting inward investment and creating international links with the marine science and technology sectors. The university has signed an agreement with Genesis Investment Company from the Gulf kingdom, and the deal is expected to be finalised within the next six months. Plymouth has a strong marine industries sector; topics that will be researched under the alliance include water, energy, the environment, biotechnology, materials science and ICT.

In the North West, some 968 companies have benefited from the University of Cumbria’s School of Business and Enterprise since it was set up in 2006. The faculty has created 294 new jobs, as well as generating an extra $16 million in revenues for associated companies, in only three years. Its projects aim to provide assistance to enterprises and organisations ranging from start-ups to those aiming to increase their productivity. The faculty highlights its areas of expertise as being in business and management, law, accounting, travel and tourism, and business support. It will be providing workshops covering these fields across the North West during 2009.

Aerospace companies strengthen production capacity
Aerospace company GKN has opened a new component and assemblies manufacturing facility in Bristol, South West England. The GKN Aerospace plant in Filton – formerly the Airbus manufacturing site – will supply metallic and composite wing structures for pan-European Airbus projects. The operation currently supplies wings for Airbus models including the A320, A400M and the largest passenger jet in the world, the A380. The acquisition makes GKN one of the three leading aerospace operations globally and the 1,500 employees at Filton bring the company’s worldwide workforce to 10,000. The company has pledged to pump millions of dollars into the facility. Frank Bamford, senior vice president, said that the firm would source 40 per cent of the site’s business from new clients instead of relying solely on Airbus for orders.

Europe’s leading space equipment maker, EADS Astrium, has acquired Surrey Satellite Technology Limited (SSTL), a small satellites and sub-systems manufacturer based in South East England. The acquisition of the University of Surrey spin-out came after the university decided to sell its 85 per cent stake in SSTL, which will remain an independent company with its own brand identity. Colin Paynter, CEO of Astrium in the UK, said: “The UK space industry is in a strong position at present – at Astrium we have a healthy order book and we are recruiting engineers, scientists and technicians to build telecommunication and scientific satellites. SSTL has expertise in small satellites and an innovative approach to developing new markets for space.” Using innovative technologies, SSTL has helped to reduce the cost of operational space missions, and to date has launched 32 satellites.

EADS UK has opened a new research facility in Wales that will encourage aerospace companies and universities to form closer collaborations. Innovation Work in Newport was launched in January, joining the manufacturer’s development network, which has bases in locations such as Paris, Moscow and Singapore. The Newport base will focus on creating secure surveillance and control systems to be used at large-scale events such as the Ryder Cup (to be held in Newport in 2010) and the 2012 London Olympics, as well as major civil emergencies. In related news, at the end of 2008 EADS’s facility in Portsmouth, South East England won a contract to supply the Royal Australian Navy with satellite communications terminals.

Researchers at the University of York have received funding worth $1.1 million to help produce safer, cheaper aircraft. The European grant will be used for the research and development of techniques to improve the way that aircraft are designed in order to avoid electromagnetic interference. The reliance of modern aircraft on electronics means it is vital that systems are not affected by high-powered radar, electronic communication or lightning. The money awarded to the university’s Department of Electronics as part is part of a $30.8 million pan-European project, backed by major European aerospace companies, to develop computer-modelling programmes that can identify the problem at an earlier stage.
 

Telecoms companies work to expand digital network

Picture courtesy of Steve Allen Science Photo Library

Telecoms company Orange, owned by the France Telecom Group, has launched a new innovation centre in the UK. The Technocentre, a network spanning Orange’s offices, will be used to help develop new services for the company’s UK and international customers. The organisation will link up with similar sites across the globe to conduct research into areas such as internet-protocol telephony, electronic newspapers and text-to-voice services for people with sensory disabilities, as well as developing products for the UK market. When established, the UK Technocentre’s 80 engineers, researchers and marketing staff will work with more than 5,000 specialists spread across 19 countries. Tom Alexander, chief executive of Orange UK, said that the network would allow them to develop new products and services ahead of the competition. Orange’s new UK base follows that of South Korean electronics firm LG, which opened its European Design Centre in Covent Garden, London, in 2008. Faster and cheaper broadband will soon be available to companies in Northern Ireland and beyond. A new direct telecommunications link will be opened up to North America after transatlantic telecommunications company Hibernia Atlantic won a $40.6 million contract to lay an undersea cable, providing enhanced broadband connectivity for the whole of Ireland. The country’s Enterprise Minister, Arlene Foster, said the investment would provide opportunities for Northern Ireland companies selling goods and services overseas and would also improve the UK’s attractiveness to knowledge-based inward investment.

Project Kelvin – named after Lord Kelvin, who laid the first transatlantic telegraph cable in the 19th century – is a cross-border venture co-financed by the Northern Ireland Department of Enterprise, Trade and Investment and the Department of Communication, Energy and Natural Resources in the Republic of Ireland. Construction will be completed by Hibernia Atlantic no later than March 2010, and the company will continue to operate the system until December 2018.

Announcing the award of the contract, Ms Foster said: “Northern Ireland businesses are competing more than ever for business in global markets. This project will deliver the kind of international telecommunications that companies located in London, Amsterdam, Dublin and New York already depend on.”

In North East England, a $3.9 million project that will create or safeguard 80 jobs in the digital sector has been given the go-ahead. Sunderland-based Codeworks, the region’s centre for digital innovation, has secured new funding to continue with a successful programme that brings together small and medium-sized companies with the latest digital knowledge and creativity from local universities. The ‘Digital placement and knowledge transfer’ project will support 120 more SMEs, thanks in part to a $1.06 million investment from the European Regional Development Fund 2007-13.

Since 2004, the initiative has placed more than 350 students and graduates, with 85 per cent kept on by their host company or securing permanent work elsewhere in the region’s digital sector. The new investment will allow Codeworks to tap into graduate knowledge and cutting-edge research to help SMEs collaborate with the region’s five universities and further develop the region’s thriving digital industry cluster. The initiative is expected to benefit businesses involved in healthcare and health sciences in particular, along with digital games companies, which already have a successful track record in the North East.


Third runway at Heathrow is cleared for take-off
The Government has given the go-ahead for a third runway at Heathrow Airport, the UK’s main air hub, located to the west of London. The expansion had faced opposition from residents, environmentalists and some MPs, but in a heated debate in Parliament, Transport Secretary Geoff Hoon said that doing nothing to expand capacity at Heathrow would damage the UK economy. Alongside the commitment to a new runway, Mr Hoon announced increased investment in public transport, including the possibility of new high-speed rail links from the airport. He also outlined a series of measures to limit noise and emissions, and said that airlines using the new runway would be required to use the newest, least-polluting aircraft.

According to Mr Hoon, the Government is satisfied that environmental targets can be met, as it will put an initial cap on additional flights from the new runway of 125,000, will ensure that new slots are ‘green’, used by only the cleanest planes, and will set a new target on aircraft emissions – that they would be lower in 2050 than in 2005. “Taken together, this gives us the toughest climate change regime for aviation of any country in the world,” he said. He also announced that a company would be set up to look into creating a high-speed rail line between London and Scotland, adding that there was a “strong case” for a new high-speed rail hub at Heathrow.

Mr Hoon’s statement to MPs marked the beginning of a lengthy planning process, which is also likely to face legal challenges. Work on the runway is unlikely to start until 2015 and it is not expected to be operational for at least a decade. About 700 homes will have to be demolished to make way for the runway, which will increase the number of flights using Heathrow from about 480,000 a year now to 702,000 by 2030.

Meanwhile at Gatwick in West Sussex, London’s second airport, Irish airline Aer Lingus is planning to invest in a new base worth $145 million. It will introduce new daily routes to Munich, Zurich, Nice and Vienna, and will increase its number of aircraft based at the facility to eight. Aer Lingus chief executive Dermot Mannion said: “The Gatwick operation will complement our existing services out of London Heathrow, and position Aer Lingus for growth as we roll out new routes and bases in future years. We are offering consumers flights to top European business and leisure destinations at convenient times and competitive fares.” Gatwick is the second largest and second busiest airport in the UK after Heathrow and the world’s 25th largest in terms of annual passenger volume, according to the Airports Council International.

At Manchester Airport in the North West, ground transport links have been improved with the opening of a $22.5 million upgrade to the airport’s railway station. A new platform has been built as part of the wider modernisation of the West Coast Main Line. The enhanced station will improve reliability for air passengers and airport workers and will enable an increase in the number of services running into Manchester Piccadilly. In addition, it will help to enable a 50 per cent increase in the number of services between Manchester and London. The project, which was delivered 11 days early, began accepting train services in December 2008 after taking just over a year to complete. The West Coast Main Line upgrade has now been largely completed, with a number of service improvements being introduced in December and January.

Another leading airport, East Midlands Airport near Nottingham, saw a new $36.25 million station open in January. It is hoped that East Midlands Parkway station at Ratcliffe-on-Soar, managed by East Midlands Train, will encourage more people to make use of the region’s public transport network. The station will be served by 100 train services a day, with trains to and from London every 15-20 minutes at peak times. The station will also include a park-and-ride terminal for the cities of Leicester, Derby and Nottingham.


Infrastructure improvements promised to boost economy
Further major improvements in the UK’s air, rail and road transport infrastructure are promised, under new plans outlined by Transport Secretary Geoff Hoon, in a bid to improve the long-term prospects for the national economy. As well as the third runway at Heathrow, up to $8.7 billion will be spent to increase capacity on some of the nation’s busiest roads. An extra 520 lane miles of road will be opened up by widening motorways and rolling out hard shoulder running across the core motorway network.

A new company, High Speed 2, will help to consider the case for new high-speed rail services between London and Scotland. It will be tasked initially with developing a proposal for a new line between London and the West Midlands, which could link to Heathrow and the London Crossrail project through a new international interchange station. The case for electrifying two of Britain busiest railway lines – the Great Western and Midland Mainline – will also be considered. Some $362.5 million in funding will be provided by the Government to help develop ultra-low-carbon passenger vehicles, aimed at helping to reduce emissions from road transport.

Mr Hoon said: “We need to do more than just improve Heathrow to ensure that Britain’s economy can cope with the transport demands of the 21st century. A new rail line between London and the West Midlands approaching London via a Heathrow International interchange would enable faster journeys to the North and Scotland and could link the airport with rail destinations throughout the UK. This would unlock Heathrow for the rest of the country, making it a truly national asset. I expect to receive advice from High Speed 2 by the end of the year on a credible plan for a new line with financing proposals.”

Meanwhile, high-speed Channel Tunnel passenger train service Eurostar reported a 10.9 per cent increase in ticket sales in 2008 and a 10.3 per cent rise in passenger numbers. The company’s record total of 9.1 million passengers would have been higher if a fire on a freight train in the tunnel between England and France in September had not caused severe disruption. Full-year ticket sales increased to $992.8 million from $868.5 million in 2007.
Chief executive Richard Brown said that the company was “quite optimistic’ about prospects for future growth. “We are an international business and, while the pound is weak, it means that London is much cheaper for people coming from France and Belgium, so we have seen 15 per cent and more growth in visitors coming to London,” he commented. He added that St Pancras International, the service’s new base, was more accessible to the rest of the UK than the previous base at Waterloo, boosting travel from the regions.

Eurostar: the high-speed Channel Tunnel passenger train service

Energy firms aim to secure alternative power sources
French energy company EDF has completed its $18.1 billion purchase of British Energy Group plc, marking a significant step in its plans to build four new nuclear reactors in the UK. Business Secretary Lord Mandelson said: “Completion of this takeover represents not only [an $18.1 billion] investment in the UK by EDF but, in opening the way for new nuclear build, should provide many billions of pounds more opportunity for the UK supply chain.” The sale, which includes the 36 per cent stake in the company held by the Government’s Nuclear Liabilities Fund, raises approximately $6.4 billion towards the cost of decommissioning British Energy’s existing nuclear power stations. British Energy is the UK’s largest electricity generator employing over 6,000 people. It currently owns and operates eight nuclear power stations in the UK.

David Clarke, chief executive of the Energy Technologies Institute (ETI), a new government-backed R&D group for the energy sector, has claimed that a market worth more than $72.5 billion will be created for new wind, wave and tidal power equipment in British waters by 2020. He made the remark while launching the first four projects backed by the group, which aims to encourage the commercial development of low-carbon energy sources, including renewables, electric vehicles and power stations that capture and store carbon dioxide.

The ETI is based at Loughborough University in the East Midlands and is backed by six companies that have each promised to contribute $72.5 million over 10 years. Four of these companies have foreign parents – Royal Dutch Shell, E.ON of Germany, EDF of France and Caterpillar of the US – while the other two, BP and Rolls-Royce, are UK multinationals. Mr Clarke estimated that, to meet government targets, some 4,000 offshore wind turbines and 2,000 wave or tidal power devices will have to be installed by 2020. The first four ETI-backed projects include three in offshore wind and one in wave or tidal power. They will receive a total of $87 million in funding.

Wind turbine Picture courtesy of Simon Fraser / Science Photo Library

A Danish company is planning to make a $72.5 million investment in an offshore wind-turbine manufacturing facility in Scotland. Welcon is in talks with Highlands and Islands Enterprise (HIE) and inward investment agency Scottish Development International (SDI). The deal to buy and upgrade the Vestas plant near Campbeltown on the Kintyre peninsula will be the company’s first investment in the UK. The intention is to expand Vestas’ current production of 2MW to 3MW onshore turbines to include larger offshore turbines generating between 5MW and 7MW, and possibly 10MW, of electricity. The chief executive of Welcon’s parent company Skykon, Jesper Ohlenschlaeger, said: “I foresee that in 2010 going into 2011, the plant will be three or four times the size it is now.”

Fresh initiatives boost sustainable energy and construction
Warwickshire College and St Modwen, the UK’s leading regeneration specialist, are to build a new centre to train workers in environmental technologies in Warwickshire in the West Midlands. RDA Advantage West Midlands has approved $9.1 million in funding towards the centre, which will be located in Rugby. The Power Academy will focus on training in green and carbon-friendly power sources. It will be closely linked to power companies Converteam and Alstom Power and will train technicians for the new generation of power stations, with a focus on turbines and carbon-friendly power generation.

Warwickshire College Principal Ioan Morgan said: “When companies come to Rugby they will be greeted by the college up and ready to operate as their training arm, and help them with the skills they need to develop.” Building work is due to start in February, with students starting at the college in September 2010.

Construction of a new multimillion-dollar facility to support the sustainable construction industry has been given the go-ahead in Daventry, in the East Midlands. The 43,000 sq ft iHub building will offer business incubator units, a conference room for 200-300 people, exhibition space and meeting rooms. The $12.6 million facility will form the permanent base of a new innovation network (iNet) in the sustainable construction sector. The iNet, which is currently based at the University of Northampton, will consist of a team of dedicated innovation advisors, who will work closely with businesses in the construction sector to help them adopt the new techniques and technologies required to meet future targets for low-carbon buildings.

In addition, the iNet will be able to draw on the support and resources of a 15-strong consortium comprising universities, professional bodies and research associations. The iHub itself will also be a highly innovative building, using a range of advanced technologies including a new type of quad glazing and phase change materials that provide temperature stabilisation.

New agency to unify food and environmental research
A new national research centre for food and the environment is to be established to strengthen the food, farming and environmental research programme of the Department for Food, the Environment and Rural Affairs (Defra). The Food and Environment Research Agency (Fera) will bring together Defra’s Central Science Laboratory, Plant Health Division, Plant Health and Seeds Inspectorate and the Plant Variety Rights Office and Seeds Division in a single agency. According to Farming Minister Jane Kennedy, this will significantly strengthen Defra’s work in plant and crop protection, food chain safety, environmental risk assessment and crisis response. It will also promote better integration between policy development, scientific evidence and inspection services.

Professor Bob Watson, chief scientific advisor at Defra said: “We have positioned excellence in science at the top of Defra’s agenda to make sure we are producing the best evidence to develop appropriate solutions for problems occurring in ecosystems, water supplies, the climate and food. The creation of Fera is a landmark step in taking the best research forward and making our systems as streamlined as possible.” The new agency will begin work on 1 April 2009.

Dr Julian Hibberd, from the Department of Plant Sciences at the University of Cambridge in Eastern England, has been named as one of the ‘Five crop researchers who could change the world’ in the publication Nature. Escalating food prices have reinforced the need for innovation in agriculture. The only European scientist to be included on the list, Dr Hibberd’s work explores the evolution and assembly of the photosynthetic apparatus in plants. Working with the International Rice Research Institute in the Philippines, his research group is trying to transfer genes from maize, which uses the C4 pathway, into rice. This could one day revolutionise the production of rice, a staple product for millions of people across the world.

Picture courtesy of Kevin Curtis / Science Photo Library

In the East Midlands, funding of $362,500 in innovation grants has been made available to the region’s food and drink companies. The Food and Drink iNet, which is funded by the East Midlands Development Agency (EMDA), aims to encourage enterprises in the sector to develop ideas into new products. Eligible companies can apply for Innovation Support Grants on the condition that it provides 50 per cent match-funding in either money or time. The finance is available to firms in the region which employ fewer than 250 people. The food and drink sector accounts for 5 per cent of the East Midlands economy.

Wakefield named top location for business growth
Wakefield in North West England has been named as one of the UK’s top 20 locations for business growth, according to Royal Mail’s latest national Business Barometer data. The Business Barometer, a detailed analysis of active businesses within the UK, sees Wakefield join Halifax as the only Yorkshire location to make the top 20. The town recorded a 1.7 per cent increase in growth between March and August 2008, compared with the same period in 2007.

Paul Barrett, head of investment and marketing at Wakefield District Development Agency first, said: “This survey shows that Wakefield is building a national profile as an increasingly attractive location to work, live and play. We have a great land and property portfolio, unrivalled transport links and a highly skilled workforce. Perceptions of the city and district are changing regionally and nationally, and this is a strong endorsement for Wakefield that can help our ongoing drive to attract further investment to the district.”

Regional news
Toyota GB has appointed a new chairman, Naoya Taniguchi. Mr Taniguchi took up his post on 5 January, replacing Shimpei Kobayashi, who has returned to Japan to take up a new assignment within Toyota Motor Corporation. Mr Taniguchi, 53, has had a long career with Toyota, having joined the company in 1978 after graduation. In 1985 he took charge of Toyota operations in Germany and Denmark and in 1991 joined Toyota Deutschland, in charge of sales, marketing and public relations. Taniguchi returned to TMC in Japan from 1995 to 2001, then took the post of group vice president of Toyota Motor Sales USA. He joins Toyota GB from TMC’s Global Marketing Division, where he was brand planning general manager.

Analytical and consultancy firm Eclipse Scientific Group, one of Europe’s leading independent laboratories, is to establish a new base at the Kent Science Park in South East England, after outgrowing its current premises. The company will continue to offer services to the food, environmental, agrochemical and pharmaceutical sectors, using the new centre to drive its growth plans. The new base will be the organisation’s second largest; it already runs seven United Kingdom Accreditation Service-approved laboratories, together with another three centres in Ireland.

The Historic Dockyard Chatham in Kent has reopened, giving South East businesses in the creative industries a new specialist centre to promote their growth. A $4.8 million facelift has seen the creation of a Centre for Creative Business at the 200-year-old facility, which now has space that will partly be used to boost business start-ups. Lee Amor, executive director for infrastructure and development at the South East England Development Authority (SEEDA), which sponsored the refurbishment, said: “We are putting the right infrastructure in place to allow businesses to take full advantage of the UK’s inevitable economic recovery, stimulating once-neglected sectors of the economy that will be vital to the region’s future.”

Axon Group, based in Egham in Surrey in South East England, has been acquired by Indian computer services giant HCL Technologies for $639.4 million. The deal, which was supported by both Merrill Lynch and Citigroup, will allow HCL to take advantage of Axon’s ability to advise corporate customers on how best to make use of management software developed by SAP AG. The deal is said to be the largest takeover completed by a company from India’s booming IT sector. Also in Egham, consumer products giant Proctor & Gamble is to rebrand its research centre, improving office facilities for its 800 employees in the town.

South East England-based biotech R&D company Thiakis has attracted inward investment from the US after being acquired by US-based Wyeth Pharmaceuticals. Wyeth Pharmaceuticals, a division of pharmaceutical and health care products giant Wyeth, has purchased the Oxfordshire firm for approximately $29 million. According to Wyeth, an additional $113 million will be paid to Thiakis upon the achievement of various development milestones. TKS1225, which is Thiakis’ lead product candidate, is being studied for the treatment of medical obesity and other co-morbidities. “Thiakis’ research and development programme fits well with Wyeth’s goal of addressing the medical burden of obesity in a targeted manner using biologic-based therapies,” the US company said in a statement.

German heating firm Bosch Thermotechnology has unveiled plans to expand its operations in Worcester in the West Midlands. The company plans to create a new centre in the east of the city, after submitting its plans to the Environment Agency and local authorities. Acting as the division’s head office, the proposed base will house R&D, manufacturing and distribution facilities, as well as training operations. Regional development agency Advantage West Midlands, which is working with the firm, said that the relocation would strengthen the investment the company has made in the area and would create conditions for spin-off growth in local businesses. Bosch has had a presence in Worcester for the past 46 years.

Stoke-on-Trent in the West Midlands will be the site of a university quarter and knowledge hub scheme which has the potential to generate up to $625 million in investment over the next 15 years, according to local sources. Public money worth at least $300 million will be contributed to the project, while the North Staffordshire Regeneration Partnership believes the private sector will provide around $362 million. Under the scheme, the city will gain a $42 million science centre, a $53.6 million knowledge hub and shared media, arts and sports facilities worth $61 million. Other benefits will include extensions to educational institutions, improvements to transport infrastructure, new commercial developments and extra housing.

US technology company AttentionIT, which specialises in environmental software, is to open a new base at Birchwood Park in Warrington, North West England to take advantage of the region’s nuclear facilities cluster. The Knoxville-based firm has received support from a range of organisations, including the Northwest Regional Development Agency (NWDA). The company will mark its entry into the UK by supplying Magnox South with waste-tracking software for use at five nuclear sites which are being decommissioned in the south of England, before attempting to expand nationwide. The nuclear industry is one of the key sectors in the North West, and the region is looking to it to will help it through the economic downturn.

Gravatom Engineering Systems, based in Workington, Cumbria and part of North West England’s nuclear hub, has been acquired by French company ONET Group. ONET’s nuclear and engineering division is a market leader in France in decommissioning nuclear plants, and is said to be second only to AREVA in reactor maintenance. Gravatom designs, manufactures and commissions engineering solutions around the world for clients such as AstraZeneca, British Nuclear Fuels and Pfizer. One of its specialties is nuclear medicine. The company recorded revenue of $14 million in the period to the end of May 2008.

The North West of England is a key location for film production, according to Northwest Vision and Media (NVM). The funding and training organisation reported that the movie business boosted the regional economy by $65.25 million in 2008, including the use of local services and film crews. Greater Manchester was the overall star of “the most prosperous production centre outside London”, claiming 890 of the 1475.5 days of filming. Of the 526 productions based in the region, Guy Ritchie’s Sherlock Holmes led the way in terms of A-list stars and media coverage.

IT company Alchemy Plus plans to build a new data centre in Inverness in Scotland, creating 400 new jobs. The $29 million building will be part of a major development at Inverness harbour and is billed as Scotland’s first eco-friendly data centre. Alchemy Plus, a partner of the computer giant Microsoft, will provide data-centre services to clients on a ‘pay as you go’ basis. Using ‘utility’ or ‘cloud’ computing, customers will pay a monthly fee for access to vast IT resources and data delivered over the internet, with applications securely stored centrally, rather than on individual computers. It is proposed that waste heat from the 20,000 sq ft data centre will help to warm neighbouring parts of the harbour development, making the facility one of the most energy-efficient in the area. Data centres generate large amounts of heat, and high levels of power are needed to supply the computing hardware and the cooling systems that protect it. However, Alchemy says that the colder climate in the Highlands means it will reduce the need for artificial refrigeration. Alchemy already provides a shared services computing facility for several companies in the area.

Northern Ireland Enterprise Minister Arlene Foster has launched a new, more accessible programme of R&D support for companies across the region. Invest Northern Ireland’s ‘Grant for R&D’, which is part-funded by the European Regional Development Programme, will make it easier for companies to access financial support from the $72.5 million allocated by Invest NI, to promote investment in innovation-focused projects from 2008 to 2011. Combined with expert guidance from dedicated Innovation Advisors, the new ‘Grant for R&D’ programme is available to companies regardless of size or previous experience of R&D activity.
 

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