The recession has reduced the Government’s tax
revenues and consequently tax income will require a number of years
to recover, said Mr Darling. Public borrowing would therefore be
$262.5 billion in 2009, the equivalent of 12.4 per cent of GDP. In
2010/11 it will be $259.5 billion, then $210 billion, $177 billion
and $145.5 billion in the following years. He predicted that the
UK’s net debt would rise to 59 per cent of GDP this year, increasing
to 68 per cent, 74 per cent, 78 per cent and 79 per cent in 2010/11
to 2013/14 before stabilising and then starting to fall in 2015/16.
In measures aimed at business, Mr Darling announced that the scheme
allowing loss-making companies and unincorporated businesses to
reclaim taxes on profits made in the last three years will be
extended to November 2010, to help companies with cash flow
problems. There will be a temporary 40 per cent first-year allowance
for expenditure in 2009/10 on plant and machinery normally allocated
to the main capital allowance pool. He also announced a new $1.13
billion Strategic Investment Fund is to help emerging technologies
and regionally important sectors. Extra funding will be provided to
expand the UK’s broadband network.
There will be no increase in income tax this year. However, the
Chancellor increased the new top-rate income tax rate of 45 per cent
announced last year to 50 per cent for people earning more than
$225,000 a year and will introduce it in April 2010, a year earlier
than planned. People earning more than $150,000 annually will lose
their personal allowances from next April, and tax relief on pension
contributions for those earning more than $225,000 will be cut,
falling gradually to 20 per cent. There will be a review of
corporate pay in the banking sector, while measures against tax
avoidance are expected to bring in an extra $1.5 billion during the
next three years.
To help those without jobs, an extra $2.6 billion of funding for the
Job Centre network will be found, and from January anyone under 25
who has been out of work for 12 months will be offered a job or a
training placement. Statutory redundancy pay will be increased and a
scheme to help people pay their mortgage interest if they lose their
jobs is to be extended for six months. To help first-time house
buyers, the existing stamp duty holiday for properties worth less
than $262,500 will be extended to the end of this year. There will
be a $750 million boost for the housing industry, including $150
million for local authorities to build energy-efficient houses and
$75 million to modernise accomodation for the armed forces.
To help balance the books, Mr Darling said that potential efficiency
savings had been identified in Government departments, worth a total
of $22.5 billion annually. Around $9 billion can be delivered by
2010/11 and the rest by 2013/14. The Chancellor also claimed that
his was the world’s first “carbon budget”, as he committed the UK to
cutting carbon emissions by 34 per cent by 2020. There will be an
additional $652.5 million of support for energy-saving measures for
homes and public buildings, as well as $787.5 million for wind power
projects. He also promised $607.5 million to encourage low-carbon
energy and advanced green manufacturing. New power stations will be
exempt from the climate change levy from 2013.
To support the car industry, a scrappage scheme will be introduced
in May giving drivers a $3,000 discount on new vehicles if they
trade in cars that they have owned for more than 12 months and that
are more than ten years old. The scheme will run until March 2010.
However, fuel duty will increase by 2p per litre in September and by
1p a litre above indexation each April for the next four years.
Duties on alcohol and tobacco were both increased by 2 per cent.
Budget receives muted reception from business leaders
Mr Darling insisted that it was right to
provide limited help for business investment, green projects,
housing and pensioners in the short term, and to squeeze government
spending only after the recovery started “towards the end of the
year”. He said that Britain had learned the lessons from the 1930s,
when the “failure to act turned a serious downturn into a prolonged
depression”, and would not repeat the same mistakes. However, at the
same time as the Budget, the International Monetary Fund released
figures predicting a much slower recovery and continued contraction
in 2010. This was seized on by the opposition Conservative and
Liberal Democrat parties, who claimed that Mr Darling’s Budget was
based on “absurdly optimistic” growth forecasts and that his figures
were “massaged”. In the money markets, sterling fell almost 1 per
cent against the currencies of Britain’s main trading partners.
Business leaders also gave the Budget a largely hostile response.
Richard Lambert, director-general of employers’ group the CBI, said:
“The chancellor’s economic forecasts, with a rapid end to the
recession and well above trend growth from 2011-14, look optimistic.
Even so, the horizon for balancing the books has been extended to
2018, two years later than previously targeted. With annual
government bond issue expected to exceed $300 billion in the coming
years and debt doubling by 2013, the government is running too much
of a risk with the willingness of investors to finance UK debt.”
However, Mr Lambert conceded that there were some worthwhile micro
measures “on the fringes”, such as a top-up scheme to support
businesses struggling to access trade credit insurance and the
car-scrapping scheme to help motor manufacturers. He also welcomed
the one-year doubling of the capital allowance rate and the
extension of provisions allowing loss-making companies to reclaim
taxes on profits. Gilbert Toppin, chief executive of EEF, the
manufacturers’ organisation, largely echoed this appraisal. He said:
“The measures on investment, trade credit, low-carbon technologies
and car scrappage are helpful, though [the Chancellor] should have
gone further to make a real difference. However, the growth
forecasts look overly optimistic and there is a serious danger that
business will pay the price in higher tax if growth falls short.”
Miles Templeman, director general of the Institute of Directors,
warned that borrowing would be even higher than the Chancellor
forecast because his growth assumptions were too optimistic. He also
said that the increase in the top rate of income tax to 50 per cent
sent out the wrong signals, while the restriction on relief from
pension contributions for high earners would impose unfairly high
tax rates on some people. David Frost, director general of the
British Chambers of Commerce, commented: “The chancellor appears to
have understood that it will be business driving the economy out of
recession, and there are some good measures that reflect this.”
However, he too said there was a “major concern” over the income tax
rise for the highest earners. “The strength of the UK has been as a
low-tax economy giving us a competitive advantage and able to
attract the most highly-skilled workers. The top tax rate in France
and Germany is 40 per cent and 45 per cent respectively, giving us
the highest top rate of our major European competitors."
Government lends support to
low-carbon car development
In his Budget, Alistair Darling committed the
UK to the most ambitious climate change prevention targets of any
developed country, with the world’s first “carbon budget” forming
the centrepiece of the government’s green jobs strategy. Under the
plan, the UK will have to cut greenhouse gas emissions by 34 per
cent by 2020, compared with 1990 levels. This legally-binding target
goes well beyond the European Union’s pledge to cut emissions by 20
per cent and the US commitment to return to 1990 levels by 2020. The
carbon budget will apply to all government departments and all
policies that could increase emissions. Although individual
departments will not have their own carbon budgets, overall the
government must ensure that it does not introduce policies that may
cause the targets to be missed. However, the 34 per cent is measured
against 1990 levels, when the UK was much more dependent on coal.
Emissions in 2006 were already 16 per cent lower than this,
according to analysts. Critics also claimed that the Chancellor had
not provided enough help for businesses to meet the targets,
promising only $2.1 billion of public and private money.
Prior to the Budget, the Government launched a new initiative to
promote ultra-low-carbon transport over the next five years. Central
to the strategy is a plan to help put electric cars into the reach
of ordinary motorists by providing help worth $3,000–$7,500 towards
buying electric and plug-in hybrid cars, which are expected to reach
the mass market from 2011 onwards. The new announcement, backing the
Government’s recent commitment to place low-carbon transport at the
centre of its vision for the UK economy, is intended to promote
infrastructure and technology development and to encourage
manufacture in the UK, whilst also encouraging consumers to buy into
the idea.
The funding is part of a $375 million scheme intended to help
consumers and businesses make the transition to low carbon. It
includes $30 million for charging points and related infrastructure
to help develop a network of “electric car cities” throughout the UK
and an expansion of an electric and ultra-low carbon car
demonstration project involving 200 motorists. Transport Secretary
Geoff Hoon said: “Cutting road transport CO2 emissions is a key
element to tackling climate change. Less than 0.1 per cent of the
UK’s 26 million cars are electric, so there is a huge untapped
potential to reduce emissions.”
The Government has already committed $600 million of support to
encourage development and uptake of ultra-low emission vehicles, in
addition to a $3.5 billion package of support for the automotive
sector designed to support the development of green technologies.
Richard Parry-Jones, chairman of the industry-led New Automotive
Innovation and Growth Team (NAIGT), welcomed the latest
announcement. He said: “The auto sector in the UK has transformed
itself into a world-class industry, with superb design and
engineering skills, very high productivity, product reliability that
rivals the best in the world and flexible, constructive labour
relations. [This] announcement represents a major step towards
achieving the NAIGT’s ambition of ensuring that the industry in the
UK can play a decisive global role in developing and manufacturing
exciting, low-carbon vehicles for the future.”
EIB approves funding to help car-makers cut emissions
In the meantime, the European Investment
Bank (EIB) has approved funding for two leading car-makers in the
UK, Jaguar Land Rover and Nissan. The loans include a $510 million
package for Jaguar Land Rover, which has plants in the Midlands and
on Merseyside, to help cut vehicle emissions and $555 million for
Nissan to build more fuel-efficient vehicles, split equally between
its plants in Sunderland, North East England and Spain. Both
companies were optimistic that the funding would help them in the
face of the global slump in car sales. “This loan will support
Jaguar Land Rover’s significant investments in environmental
technologies that are crucial for the future,” said Jaguar Land
Rover in a statement. Nissan commented: “Nissan joins the other
manufacturers in applauding the move by the EIB to extend support to
the automotive industry through this crisis.”
Nissan, Land Rover and Jaguar get
EIB help to build low emission vehicles
Under EIB rules, the
loans require that car-makers must invest in new technology to
reduce emissions during vehicle production and driving. The loans
will also require some form of guarantee from the UK government
before any money is paid. The Federation of Small Businesses
welcomed the EIB’s support, but said that the loans needed to be
implemented as soon as possible by the Government to ensure that
businesses involved in the supply chain could benefit. As part of a
€9.1 billion lending package to support Europe’s motor industry, the
Luxemburg-based bank has also approved a loan for a Volkswagen plant
in India.
Jaguar Land Rover is based in Gaydon, Warwickshire and employs about
15,000 people in the West Midlands (Castle Bromwich, Coventry and
Solihull) and Merseyside (Halewood). Nissan’s plant in Sunderland
opened in 1986 and employs about 4,900 workers. In all, some 12
million people are employed in the European car industry, including
800,000 workers in the UK. However, the latest figures illustrate
the challenges facing the industry in the UK. Car sales dropped by
30.5 per cent in March, compared with the same month a year earlier,
according to the Society of Motor Manufacturers and Traders (SMMT).
New initiatives to drive
development of renewable energy sector
A consortium led
by Serco with Battelle and the University of Manchester has been
selected as a ‘Recommended Bidder’ as a commercial operator to run
the National Nuclear Laboratory (NNL) at Sellafield in Cumbria,
North West England. The NNL, formerly Nexia Solutions, will become
an international centre of excellence in nuclear research and
development, playing a vital role in cleaning up the UK’s nuclear
waste legacy and contributing to its planned programme of nuclear
new build. Formerly owned by British Nuclear Fuels plc (BNFL), the
NNL was transferred to Government ownership on 1 April 2009. Energy
and Climate Change Minister Mike O’Brien said: “With new nuclear
power stations in the UK coming forward by 2018, and decommissioning
of old sites progressing, the NNL will be an increasingly important
facility. It will be a leader in high-tech nuclear skills in the UK,
and it will help safeguard the West Cumbrian economy in particular.”
Sea-based renewable technologies have been given additional
financial support following an overhaul of the UK’s system for
supporting renewable energy. Energy Minister Mike O’Brien has also
announced up to $15 million of funding to develop the next
generation of offshore wind technology. Mr O’Brien said: “Renewable
energy is a weapon in our armoury to secure future energy supplies,
reduce our reliance on foreign imports, and help tackle climate
change. That’s why we’re taking the right long-term decisions to
encourage the massive investment in renewables that we need to see.
This includes changing the planning laws, increased financial
support and ensuring sufficient access to the grid.”
From 1 April, a new regime gives offshore wind 50 per cent extra
financial support through the Government’s Renewable Obligation (RO)
scheme. This is as a result of ‘banding’ the RO, which means that,
rather than a flat rate of support across all renewable technology,
emerging technologies that are further from commercial deployment
will receive greater levels of support to encourage their
development. The Low Carbon Energy Demonstration Fund, part of the
Environmental Transformation Fund, is aimed at accelerating the
technology needed to see more large-scale turbines in offshore wind
farms. Applications are currently open for up to $15 million of
funding, which will be allocated to businesses in June. The
Renewables Obligation was worth $1.3 billion to the sector in
2007-08 and will be worth about $1.5 billion a year by 2010. The
Government announced last year that the RO would be extended until
at least 2037.
The UK is currently number one in the world for operating offshore
wind farms, with 598MW of capacity, having overtaken Denmark in
October 2008. It currently has seven fully operational offshore
farms, along with two demonstration sites. A further five facilities
are currently under construction, adding another 444MW, and by the
end of 2009 the UK will have 1,042MW of offshore wind capacity.
Another eight projects, totalling more than 3GW of generating
capacity, have been approved and are in pre-construction.
Danish firm Skycon is expected to create up to 300 jobs over the
next two years, following its acquisition of a wind turbine factory
in Kintyre in Scotland. Vestas, the former owner of the factory, had
planned to shut it down because of financial difficulties. Alex
Salmond, Scottish First Minister, said that the move would be
“transformational” for both the area and for Scotland as a whole.
“It creates high-quality and skilled employment in the local area
and gives Scotland a lead in the development of clean, green energy
technology - putting our nation at the forefront of global
developments,” he commented. Jason Ormiston, chief executive of
Scottish Renewables, said that the deal was a “strong signal” that
the country’s wind industry was coping well with the recession and
would deliver strong growth.
The Norwegian Government, through state-owned firm Statkraft, is
investing around $750 million in a wind farm project in northern
Norfolk in Eastern England. Statkraft has bought a 50 per cent stake
in the Sheringham Shoal project, which is being developed by
Norwegian power utility company StatoilHydro. When complete, the
wind farm will cover an area of 35 sq km, have 88 turbines and
generate 1.1TWh of electricity annually, enough to power around
220,000 homes. Construction is scheduled to begin later this year,
with the development expected to be fully operational by the end of
2011. Bard Mikkelsen, Statkraft’s chief executive, said that Europe
was anticipating “massive growth” in the renewable energy sector,
and around half of this was expected to come from wind power. Both
Norwegian companies are members of the Forewind consortium, a joint
venture with Scottish and Southern Energy/Airtricity and RWE npower,
which is bidding for development rights to offshore wind farm
projects in the UK.
A US firm specialising in renewable energy projects is planning to
set up business in North West England. Covanta Energy has purchased
land in Cheshire and has submitted a planning application to build a
high-tech Energy-from-Waste (EfW) plant. According to the North of
England Inward Investment Agency, the facility will be able to
convert non-recyclable, non-compostable residential waste into
enough clean, renewable energy to power up to 50,000 homes.
Commercial and industrial waste from shops, offices and other
businesses in the region will be included in the scheme, reducing
the amount of waste sent to landfill and generating a net reduction
in greenhouse gas emissions. Covanta is involved in discussions with
local businesses about the possibility of providing them with
combined heat and power and is also proposing to establish a
community fund for local groups and projects.
German company MT-Energie, a pioneer in the European biogas
industry, has opened its first office in the UK. The company, which
already has a number of offices throughout Europe and North America,
will be based in Reading, Berkshire in South East England, and hopes
to take advantage of the growing anaerobic digestion industry. The
company’s services include project development, design, planning and
construction of biogas operations and special components such as
biogas upgrading (bio-methane) and injection systems. It offers
extensive engineering, technical and biological process expertise,
and has a strong reputation for post-installation support. Dr Holger
Schmitz, its managing director, commented: “We see a considerable
commitment to biogas in the UK. The Government has clearly declared
themselves in favour of the expansion of renewable energy. We are
convinced that our proven biogas technology will appeal to our
British clientele as well.”
Fresh funding boost for
cutting-edge materials research
North West England is set to become an international hub for
materials chemistry research following the launch of a new $45
million ‘virtual’ Knowledge Centre for Materials Chemistry (KCMC)
at the national Science and Innovation Campus at Daresbury in
Cheshire. The KCMC will build on leading-edge academic
research and expertise at the universities of Bolton,
Liverpool and Manchester and the Science and Technology
Facilities Council (STFC) at Daresbury Laboratory. It will
provide a single point of access for industry to a wide
spectrum of multi-disciplinary research in applied materials
chemistry.
Materials chemistry covers a broad range of science and
technology competencies that are crucial in delivering product
innovations in fields as diverse as biomedical devices,
pharmaceuticals, personal care products coatings, electronic
materials and renewable energy sources. Initial funding of $12
million from the Northwest Regional Development Agency (NWDA)
will be matched by $10.5 million of academic commitment and
resources by the partner institutions. This investment will
provide the North West with an internationally renowned
capability in materials chemistry and is expected to leverage
further industry and international grant income of more than
$22.5 million over the next five years, say the scheme’s
backers. The region’s chemical industry currently has a
turnover of $15 billion per year, with at least half of the
companies in the sector relying in some way on materials
chemistry |
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With a dedicated team of 15 new
project scientists, the KCMC will work in collaboration with
industry on translational research projects that will enable
companies to develop new commercial opportunities. An independent
knowledge transfer team will develop and manage the collaborative
research projects, drive increased industrial R&D spend and ensure
that the services of the centre are effectively linked to industry’s
needs. It will initially seek to create over 200 new collaborations
between business and the knowledge base that will deliver new
commercial opportunities. Launching the facility, John Denham,
Secretary of State for Innovation, Universities and Skills, said:
“The KCMC is a fantastic initiative with huge potential to explore
many exciting areas. It gives me great pleasure to see the centre
launched at the Daresbury campus – helping to place it as the major,
international, science and innovation hub it deserves to be.”
Daresbury is a crucial centre for research. Other facilities at the
campus include the Cockcroft Accelerator Science and Technology
Research Centre, which involves researchers from the STFC and from
Manchester, Liverpool and Lancaster universities. The Government has
also earmarked $75 million from the Large Facilities Capital Fund (LFCF)
to develop the Hartree Centre in computational science and
engineering, which will involve universities, government departments
and industry, as well as $22.5 million of LFCF funding to support
Daresbury’s key role in a new Detector Systems Technology Gateway
centre, which will drive collaborative research in next-generation
detector systems.
Meanwhile the Centre for Process Innovation (CPI) in County Durham,
North East England has secured an additional $3 million of funding
from the European Regional Development Fund 2007-13 to install
advanced, hi-tech equipment in a new cleanroom at the Printable
Electronic Technology Centre (PETEC) at NETPark. The PETEC Large
Area Coating Equipment (LACE) project has enhanced the region’s
growing technology capabilities, enabling development and
prototyping for plastic electronic applications in printable
photovoltaics (PPV) and solid state lighting (SSL). It will create
40 new jobs, assist 20 specialist businesses and provide university
training courses in PPV and SSL techniques.
The PETEC building at NETPark has been established on an open access
basis to take research ideas through to developmental prototypes,
allowing small companies and spin-outs to test ideas before the
investment-intensive manufacturing stage. It specialises in
electronic systems such as flexible computer displays used for
electronic newspapers, mobile communications devices, televisions,
sensors and smart cards. These manufacturing processes typically
require much lower levels of capital investment than current
electronics technology, enabling small, customised devices with high
design content.
PETEC
director Tom Taylor with Rt. Hon. Lord Mandelson, Secretary of State
for Business,
Enterprise and Regulatory Reform
“Printable electronics as a group of
technologies is predicted to be a $30 billion industry by 2015,”
said Alan Clarke, chief executive of RDA One North East. “While most
electronics manufacturing is currently monopolised by Asia,
fundamental technology advances in printable electronics in our
region are enabling smaller-scale and quicker specialist prototyping
and manufacturing. The UK is at the forefront of this industry, as
much of the technology and early leading companies have originated
here.”
New support to help build
sustainable life sciences sector
A new Office for Life Sciences (OLS)
has been created to address key issues affecting the pharmaceutical,
medical biotechnology and devices sectors. Part of the Department
for Innovation, Universities and Skills (DIUS) and led by Science
and Innovation Minister Lord Drayson, the OLS has been tasked, by
the end of July 2009, with making a real difference to the operating
environment for life sciences companies. It will work across
government departments to address a range of key issues,
coordinating national policy and undertaking work to build a
sustainable and integrated life sciences industry.
The OLS will look at what steps can be taken to improve access to
finance for SMEs and to stimulate investment in the industry. It
will also consider how the National Health Service (NHS) can be more
effective as a champion of innovation, possible ways of getting
medicines onto the market faster, how the UK can become a more
attractive base for clinical trials, and how to effectively market
the industry globally. Lord Drayson said: “This new Office
represents the government’s commitment to safeguarding the future of
our life sciences industry, creating an environment where everyone
from large pharmaceuticals to small biotech and medical tech
companies can prosper. The skills, expertise and intellectual
property these businesses possess are extremely valuable to the
future of this country.”
In a separate initiative, Scottish and Chinese health professionals
have formed a pioneering new partnership to build links between the
life sciences sector in the two countries. Commercial and
educational ties are expected to be strengthened by the
collaboration between NHS Scotland, the University of Edinburgh,
China’s Ministry of Health and Chinese pharmaceutical firm Asiapharm,
one of China’s most innovative life sciences businesses. The
Scottish organisations will work on a training programme to support
the next generation of pharmacists and hospital management
executives in China, while the initiative will be funded by
investment from partners in China. According to Scottish Education
Secretary Fiona Hyslop, Scotland has a “proud history” in medical
research and is committed to strengthening its position as a global
leader. She pointed to last year’s pharmaceutical research deal
between Asiapharm and Oban-based marine biotechnology firm GlycoMar
as an example of the constructive links that are being built between
the two nations.
Overseas companies investing in the UK’s life sciences sector
continue to prosper. For example, the success of US biotech giant
Genzyme’s facility at Haverhill in Suffolk, Eastern England looks
set to continue after its Renvela drug gained a “positive opinion”
from the European Medicines Agency’s Committee for Human Medicinal
Products (CHMP), opening the way for a European launch within the
next few months. Haverhill is the principal bulk manufacturing
facility for Renvela – or sevelamer carbonate – which is used to
treat patients with chronic kidney disease. The product is already
being shipped to the US, where it was launched in March 2008. The
European Commission will make a final decision on the authorisation
at the end of May. The expansion of sevelamer carbonate
manufacturing has helped to drive recent growth at the Haverhill
site. The workforce has doubled to around 350 in three years and
Genzyme has made capital investment of over $150 million over the
past five years.
Another US company, Entra Health Systems (EHS) has chosen Sunderland
in North East England as its base for the European launch of a
groundbreaking blood-sugar testing device. MyGlucoHealth, the
world’s first Bluetooth-enabled glucose meter, allows patients to
send blood-sugar test results to an online management website, a
process that has already been cleared by the US Food and Drug
Administration. The company, which received assistance from local
inward investment organisations, praised the North East as a
world-class centre of excellence across the medical IT, biotech and
life science sectors, as well as having a significant NHS presence.
Entra chief executive Rick Storbridge said: “Our technology will
lower costs for both the patient and health systems, and improve the
quality of life.”
WEF stresses importance of ICT as catalyst for growth
For the third consecutive year, Denmark and Sweden lead the rankings
as the world’s most networked economies in The Global Information
Technology Report 2008-2009, published by the Geneva-based World
Economic Forum in cooperation with business school INSEAD and Cisco
Systems. They are followed by the United States, which has climbed
one position from last year. Singapore is fourth, Switzerland fifth
and the other Nordic countries together with the Netherlands and
Canada complete the top ten. The UK is ranked 15th. China has
improved 11 places to 46th and leads the BRIC economies for the
first time.
The eighth edition of the Report, which covers a record 134
economies, underlines that good education fundamentals and high
levels of technological readiness and innovation are essential
engines of growth needed to overcome the current economic crisis.
Its Networked Readiness Index (NRI) examines how prepared countries
are to use ICT effectively on three levels: the general business,
regulatory and infrastructure environment for ICT; the readiness of
the three key stakeholder groups - individuals, businesses and
governments - to use and benefit from it; and their actual usage of
the latest technologies available. The NRI uses a combination of
data from publicly available sources, as well as the results of the
Executive Opinion Survey, a comprehensive annual survey conducted by
the WEF with its network of Partner Institutes in the countries
included in the Report.
Under the theme ‘Mobility in a Networked World’, this year’s Report
places a particular focus on the relationship and interrelations
between mobility and ICT. Mobile telephony takes a special place
among new technologies on account of its exceptional diffusion in
the past decade or so and its strong social and economic impact, it
says. The authors believe that mobility, whether virtual or
physical, will be a central factor in collective efforts to
establish an equitable, multicultural, open, innovative and
sustainable form of globalisation.
“The development story of the most networked countries in the world,
including the Nordic countries, Singapore and the United States
among others, has owed much to a consistent focus in the national
agenda on education excellence, innovation and an extensive ICT
access. This success stands as a reminder for leaders in both the
public and private sectors not to lose focus on ICT as an important
enabler of growth and competitiveness in times of crisis,” said
Irene Mia, senior economist of the Global Competitiveness Network at
the World Economic Forum and co-editor of the Report.
Roll-out of new superfast broadband to begin in
Scotland
Telecoms provider BT is embarking on a $2.25 billion project to
extend superfast broadband internet access across the UK. The BT
programme is the biggest of its kind in the country and will
eventually cover 40 per cent of homes and businesses. Glasgow and
Edinburgh in Scotland will be the first cities to benefit from the
new 40Mb/s fibre-optic network, which is five times as fast as
conventional copper wires. Around 30,000 homes and businesses around
Glasgow University and the city’s Hillington Park business area will
be included in the first major phase of the roll-out, along with
4,000 customers in Edinburgh. BT spokesman Steve Robertson said:
“Scotland is at the forefront of one of the most important projects
to take place in recent years. It will play a vital role in the UK’s
future as a knowledge-based economy.” Last year the Scottish
government awarded a $5 million contract to Avanti Communications to
provide satellite broadband in remote outposts such as Orkney and
the Isle of Skye.
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Peer 1, a leading Canadian hosted
network provider, has chosen Southampton in South East England
for its European headquarters and has begun a recruitment
drive for sales staff, data centre managers and network
professionals. The company plans to create 50 jobs in the
first 12 months and hopes to expand rapidly into Europe over
the next few years. The Vancouver-based firm helps
organisations to host their own web pages on the internet by
providing server space, and the new facility will enable
businesses based in the South East to access its ultra-fast
data centres. Peer 1 currently has over 10,000 customers in 12
cities in North America, supported by over 300 employees and
15 data centres. Managing director Dominic Monkhouse said that
web-hosting companies in the UK are increasingly looking
towards the south coast as an attractive place to base their
firms. “Southampton is a fabulous place. The business
rationale for being here is compelling. Southampton offers us
a long-term, lower-cost, more stable working environment,” he
remarked. |
Sony PSP wireless broadband |
Indian IT services specialist
Synverse has opened a new corporate headquarters in Maidenhead,
Berkshire in South East England. The company, a next-generation IT
service provider which helps customers to manage IT budgets, also
has global sales offices in California and Sydney, Australia, in
addition to its global delivery centre in Hyderabad. Synverse
believes that its utilisation of technology such as Open Source
applications and Cloud computing models will help it to achieve a
competitive advantage over rivals that rely on proprietary software
licences. Managing director Anuj Sachdeva explained: “Recession is
an optimal time for entrepreneurs and for companies like us for
presenting the best alternate solutions to our customers by
introducing new methodologies and value-added services to their
operations for enhanced efficiencies. Great companies like Google
and Intel initiated when the economy was slowing. It is the time
when people can take risks.”
|
Rents fall as companies reduce
office space requirements |
| Take-up
of new offices in the City of London has fallen to its lowest
level for more than 20 years, as the slowing economy forces
financial services businesses to scale back plans to expand or
move into new buildings. Just 220,000 sq ft of new space has
been occupied in the City since the start of this year; this
is half the level of the previous low, in the third quarter of
1991 during the last recession, when 500,000 sq ft was let.
Currently many businesses are seeking to cut staff and reduce
the office space they occupy, while some are looking to
sub-let their own space. According to property consultancy
Atisreal, the vacancy rate in the City of 12.4 per cent, or 10
million sq ft, is still significantly lower than the recession
of the early 1990s, when 20 per cent of offices were empty.
However, a number of new buildings are due to come onto the
market in the next two years, adding to those figures.
City rents have fallen sharply. Dan Bayley, head of national
sales and lettings at Atisreal, said that prime rents were now
about $67.50 per sq ft, down a third from the 2007 market peak
of $101.25. He said: “With rents continuing to fall, landlords
are experiencing further pain. However, the positive factor is
that a number of occupiers really are seeing value for money
and, like the West End, [the City] may start seeing more
activity in the coming quarters.” |
 |
A new report from consultant
GVA Grimley on the business park sector shows that, nationally,
take-up has fallen sharply since the peak of June 2007. According to
the Spring 2009 Business Parks Review, take-up in the second half of
2008 was down 17 per cent on the preceding six months, at 1.7
million sq ft. This compares with a six-monthly average over the
past five years of 2.3 million sq ft. Take-up has fallen in all
regions, apart from the North West, North East and Yorkshire and
Humber, where there has been little change. New enquiries are down,
according to GVA Grimley, and while a number of companies are
actively looking for accommodation, far fewer appear to be
committing. Deals on offer to occupiers are becoming more
attractive, with evidence of rents softening and incentives
increasing. In the short to medium term, demand is expected to
continue to fall.
At the end of 2008, there was 3.5 million sq ft of space under
construction, down 21 per cent on the figure six months previously
but higher than the five-year six-monthly average of 3.3 million sq
ft. Speculative development makes up 80 per cent of this figure and
has been increasing in proportion over the past few years. There has
been an increase in the space under construction in the South East
and Eastern region and in Yorkshire, Humber and the North East over
the past six months, but a decrease in all other regions.
Nationally, availability has risen by 9 per cent over the past six
months, to 12.1 million sq ft or approximately 13.4 per cent of
total stock. However, this is still short of the 15.3 per cent
vacancy rate in 2004, as stock levels have increased by 43 per cent
since then. The South East accounts for 35 per cent of availability,
but there is more space available in all regions, apart from the
North West where there has been little change.
GVA Grimley’s out-of-town rental index shows that nationally
out-of-town office prime rents grew by 2.6 per cent during 2008 but
showed no change over the final six months of the year. However,
there has been a significant increase in incentives, in effect
reducing rental levels. There is evidence of a two-tier market
evolving, with reduced rentals and increased incentives available on
existing stock but not on new builds, where the viability of
developments has fallen sharply. In line with increasingly gloomy
economic forecasts, the company has cut its expectations for rental
growth, predicting that average business park rents will decrease by
9 per cent in 2009 and by 5.5 per cent in 2010.
In a move that may help some hard-pressed occupiers, Chancellor
Alistair Darling has announced that the 5 per cent rise in business
rates that was due to come into force in April will instead be
phased in over a three-year period. Rates will rise by 2 per cent
this year, with the remaining 3 per cent to be introduced over the
following two years. Business rates rise each April in line with the
Retail Prices Index, as it stood in the previous September. However,
the latest 5 per cent hike was based on an inflation rate that, in
the intervening six months, has shrunk to zero. Richard Lambert, the
CBI’s director-general, commented: “This is a step in the right
direction, helping companies at a critical time by improving cash
flow. We are also pleased that the change will defer increases due
to transitional rate relief, which had threatened some companies at
a difficult time.”
RDAs charged with crucial role in
driving regional growth
England’s nine
Regional Development Agencies (RDAs), first set up ten years ago,
have made a significant impact on the country’s economy over the
past five years, according to an independent report published by the
Department for Business, Enterprise and Regulatory Reform (BERR).
The Impact of RDA Spending report, produced by
PricewaterhouseCoopers, shows that between 2002-03 and 2006-07, for
every $1.50 spent by the RDAs, an average of $6.75 of economic
output (or gross value added - GVA) was put back into regional
economies. This means that the RDAs have quadrupled their $7.65
billion of evaluated expenditure during this time, with an overall
return on investment of over $34.5 billion.
Business Secretary Lord Mandelson said: “The RDAs are working. We
have clear evidence that their programmes are helping to drive
regional economies – creating jobs, helping businesses and boosting
skills. They are on the front line of our response to the global
downturn. But their medium- and long-term interventions and
investments are equally important to prepare for the upturn. It will
help ensure that we emerge stronger. I think RDAs can do even more.
They must relentlessly focus on economic recovery and growth and are
ideally placed to help lay down the commercial infrastructure of the
21st century. I am confident that the RDAs can rise to this
challenge.”
Lord Mandelson also highlighted the fact that the organisations have
worked closely with UK Trade & Investment (UKTI) to help companies
pursue international opportunities and deliver essential programmes
to spur economic growth. Steven Broomhead, chief executive of the
Northwest Regional Development Agency (NWDA, welcomed the report,
saying it was “very positive” to see that the groups are having a
real impact on their local economies. Over the past five years, his
own agency has directly created or safeguarded 97,000 jobs, created
3,500 new businesses, helped 14,000 companies to improve their
business performance, regenerated 1,900 hectares of disused land and
helped 97,000 people to gain new skills.
Recently, the NWDA has confirmed further funding for training to
help support the region’s automotive sector, the second largest in
the UK. It has approved $2.25 million to extend its existing
Coaching and Leadership Solutions Project, which helps with the
retention and development of skills and supports the development of
key higher-level skills for individuals within the auto business. It
also helps to implement product and process innovations or change
management needed to ensure short-term business survival. Companies
benefiting from the programme include Vauxhall, which is owned by
General Motors. In addition the NWDA has supported a successful
application by Land Rover for a $40.5 million Grant for Business
Investment (GBI) from the Government, to support production of an
all-new Range Rover at the company’s Halewood plant.
Some RDAs claim a bigger-than-average return on investment. An
independent report by research company Ecotec for the East Midlands
Development Agency (emda), for instance, shows that, between 1999
and 2007, for every $1.50 spent, over $13.50 of GVA was put back
into the East Midlands economy. Since 1999, emda has created 23,570
jobs and safeguarded a further 11,700, has regenerated nearly 4,000
hectares of brownfield land and has assisted 63,938 people to
develop their skills. Jeff Moore, the agency’s chief executive,
said: “This report demonstrates that emda has been investing wisely
in business support, regeneration and skills activities, bringing
about substantial benefits for our regional economy. We … hope this
independent evaluation gives people and businesses confidence in our
ability to deliver and support them through the recession.”
Headline statistics in the PWC report for RDA One North East show
that over the past five years the agency has directly created more
than 24,400 jobs, helped to create 1,140 new businesses, helped
1,710 companies to improve their business performance, reclaimed 210
hectares of disused land for new business development, helped more
than 6,300 people into employment and assisted more than 98,000
people to gain new skills. In particular, its work in the area of
business competitiveness and development, which covers activities
such as overseas investment and enterprise support, realised an
overall return on investment of $12 for every $1.50 spent.
Northern Ireland’s regional development agency meanwhile has helped
to secure nearly $2 billion in inward investment since it was set up
in 2002. Invest Northern Ireland’s third Performance Information
Report shows that, over the six-year period to 2008, it supported 89
new inward investment projects and 110 projects by overseas
investors already established in the province. Leslie Morrison, the
agency’s chief executive, said: “Obviously many factors influence
business and economic performance, only one of which is Invest NI’s
support. It is telling, however, to note that Invest NI clients are
responsible for 92 per cent of manufacturing exports and 90 per cent
of business expenditure on R&D and have GVA per head that is 36 per
cent higher than the Northern Ireland average.”
Highways Agency outlines plans for
road network improvements
The Highways Agency
has published its annual Business Plan for 2009-10, describing plans
to improve England’s strategic road network. Up to $9 billion of
investment in the network was announced by the Department for
Transport (DfT) in January. This financial year the Agency aims to
start construction work on six major road schemes: widening the M25
orbital road around London from junctions 16-23 and also junctions
27-30, Hard Shoulder Running on M6 junctions 8-10a, A14 Felixstowe
to M1 traffic management technology improvements, Hard Shoulder
Running on M1 junctions 10-13, and also on M4 junctions 19-10 and M5
junctions 15-17.
The Agency is also bringing forward work valued at $600 million as
part of the Government’s fiscal stimulus measures. This includes the
start in April of construction work on the A46 Newark to Widmerpool
scheme in the East Midlands three years ahead of schedule, as well
as making a start on the managed motorways programme and a
substantial programme of asset renewal work. In 2009-10 the Agency
will complete the $102 million A1 Bramham to Wetherby highway,
including the Wetherby bypass, in Yorkshire and Humber and the $126
million A1 Peterborough to Blyth junction improvement scheme in
Eastern England. It also plans to award a 30-year private finance
contract worth more than $7.5 billion to design, build and operate
more than 63 miles of the M25.
Graham Dalton, Highways Agency chief executive, said: “We now have a
defined major roads programme for 2009-10 and beyond, which includes
rolling out the innovative Hard Shoulder Running and Active Traffic
Management schemes on key sections of our motorway network. This, in
conjunction with conventional road improvement schemes, will deliver
greater benefits for managing and operating the road network, making
journeys more reliable and safer.”
Freight movements in 2008 through the Port of Dover, South East
England fell slightly below 2007’s record high to 2.3 million
journeys, despite soaring fuel prices, a strong euro and the overall
economic downturn, according to the port’s annual report. The
closure and slow return to normal service of the Channel Tunnel,
following a fire in September, drove additional freight through
Dover, which is the UK’s leading ro-ro port. Motoring tourism
remained buoyant with 2.8 million cars travelling through the port.
For the seventh successive year, revenue increased – by 5.3 per cent
– reaching $91.2 million, while revenue from ferry activity rose by
3.7 per cent to $66.5 million.
With long-term predictions for a growth in traffic, the Port of
Dover has recently acquired fresh freight and passenger capacity
with the launch of new services to Dieppe and Boulogne. Further
growth is expected with P&O Ferries’ $423 million investment in two
of the largest ferries ever to be constructed for the Dover-Calais
route. Due to enter service in 2010, these will more than double the
freight carrying capacity of the ships they are replacing. To
accommodate long-term traffic volumes, Dover is pressing ahead with
its plan to double its capacity with a second terminal. It has cash
reserves of more than $64.5 million to fund capital works, which are
currently the subject of an environmental impact study.
Blackpool International Airport in North West England has been named
passenger favourite in a survey by Which? Holiday magazine. The
Lancashire and Lake District airport performed best in a survey of
30 UK airports, with an overall customer score of 80 per cent and
five-star ratings for airport experience, check-in procedures, time
spent to clear security and distance from check-in to boarding. More
than 9,000 people participated in the online survey by Which?, the
leading independent consumer champion in the UK. Susan Kendrick,
customer relations and communications manager for Blackpool
International, which this year is celebrating its centenary, said:
“By the nature of our business we are extremely customer-focused,
spending a lot of time on training and mentoring to ensure our staff
provide passengers with the best start to their holidays.”
Also in the North West, Carlisle City Council has given the go-ahead
for a $37.5 million redevelopment of Carlisle Airport. Developer the
Stobart Group will purchase the airfield and begin work to turn it
into an improved passenger hub, in particular improving the runway
and passenger terminal. When the development is complete, the
facility will have a link to Southend Airport in Eastern England,
and a new railway to be built there will mean that passengers will
be able to transfer to central London in an overall journey time of
just 90 minutes. A 2002 government report estimated that Carlisle
Airport may be able to handle up to 1 million passengers by 2030
thanks to the proposed terminal improvements.
Regional news
The owners of the
King’s Cross Central (KXC) joint venture and the University of the
Arts London have confirmed a total commitment of over $375 million
of investment up to 2011 in the 67-acre development in central
London, in the area around King’s Cross Station. The commitment to
the landmark scheme means that significant construction activity
will occur over the next three years, at a time when most other
developments around London and the UK are being put on hold. The
plan includes the laying out of Granary Square, which will be one of
the largest public squares in London, the construction of an energy
centre and a district heating grid incorporating combined heat and
power technology, the first of three bridges across the Regent’s
Canal, two key roads north of the canal, a significant upgrade to
the Grade II-listed Great Northern Hotel and a shared service yard
with Network Rail. University of the Arts London has signed a
construction contract worth over $150 million to build its new
campus on the site, which will be home to over 6,500 students and
staff from September 2011. Last year detailed permission was granted
by Camden Council for 550,000 sq ft of space in the Granary Complex,
which includes the new campus. The 420,000 sq ft facility will house
Central Saint Martins College of Art and Design.
Specialist police squads intended to help businesses fight crimes
ranging from data theft to terrorism are to be set up in the City of
London and other leading business centres. Three pilot units
consisting of specialist officers will begin operating in London in
May, as part of an initiative that could be rolled out across the
country. The squads, each containing five officers with experience
in economic crime, counter-terrorism and building security, will
operate from offices at the Broadgate Estate in the City and near
London Bridge and Victoria railway stations. They will offer a range
of services, from recording car crimes suffered by employees in
their home towns to sophisticated advice to corporations, such as
dealing with the terrorist and data crime consequences of stolen
computers. The move has been made in response to concerns that fears
about crime are putting off expatriate workers and foreign companies
from moving to London. “We want to work with the police to reassure
staff and international investors that London is a safe city – one
of the safest cities you can do business in,” said Richard Bingley,
executive director of security and policing at business group London
First.
Environment Secretary Hilary Benn has given the go-ahead for the
South Downs to become England’s ninth National Park, following a
19-month public inquiry. The new protected area of 627 square miles
stretches from Beachy Head to the edge of Winchester in South East
England, and is home to an estimated 120,000 people. A new South
Downs National Park Authority is expected to be established by April
2010 and to become fully operational a year later. Mr Benn said: “It
is fitting that in this year, the 60th anniversary of the radical
legislation that gave birth to National Parks, we are celebrating an
addition to the family. National Park status can be a real boost for
the local economy, attracting new visitors, businesses and
investment, but above all, the South Downs’ wonderful countryside
will be protected forever for the enjoyment of everyone.”
A new office building in Reading, South East England offers
businesses high-quality office space “on a par with London” but at
half the cost, according to its developers. The Blade, which is
located in the centre of the Berkshire town, stands 128 metres tall
and occupies around 100,000 sq ft of space. It is adjacent to
Reading station, which operates a 25-minute rail service to London
Paddington, and is less than an hour away from Heathrow Airport. The
building has 14 floors and 24-hour security and is described by its
developers as “Reading’s most significant office space development
in a decade”. “In terms of providing the quality of building on a
par with London buildings, and being able to save over 50 per cent
in occupational costs, it makes an awful lot of sense,” said Ed
Jones, property director at PMB Holdings.
| Swiss
electronics firm Lemo has begun construction of a new $6
million headquarters building in Worthing, West Sussex in
South East England. The company, which manufactures specialist
electronic and fibre-optic connectors, currently employs 43
people in the area and says that a further 40 could be taken
on at the new site. Richard Thomas, Lemo UK’s managing
director, said that the company had been affected by the
economic slowdown but that it takes a long-term approach to
its investments. He added: “Worthing is well placed for us to
reach our important markets in the UK, as well as for receipt
of supplies of our base components from our Swiss machining
centres.”
Construction work has begun on a $22.5 million business
complex in Southampton on the south coast. The City Gateway
development is being built by the healthcare company
CareCapital and will include leasing opportunities for
businesses, as well as primary care facilities. The complex,
located one mile from Southampton Airport, is expected to be
completed by spring 2011. |
 |
Surrey Space Centre in South
East England is joining forces with one of China’s top engineers to
develop lunar rovers to explore the surface of the moon. The Royal
Academy of Engineering will provide funding for UK-based space
engineer Dr Yang Gao to work on developments for future moon
exploration, including the proposed Moonraker lander mission by the
UK and China’s Chang’e programme. The team will work to create a
robust stereo-vision system, with a precision of centimetres, which
will allow image transfer despite the bright sunlight present on the
moon’s surface. Dr Gao, a lecturer in space autonomy at the
University of Surrey, and Associate Professor Hehua Ju of the
Beijing University of Technology will work to develop technology and
information exchanges with China and India. The research will also
investigate autonomous functions crucial to a lunar mission, while a
remote control station will be developed in Surrey to operate during
field tests in China of a lunar rover prototype.
Work has begun on a cutting-edge manufacturing facility at GKN
Aerospace in Bristol, South West England. The project will form a
key part of GKN Aerospace-Filton as it aims to become an
international centre of excellence in composite aircraft wing
structures. The expansion is expected to create 250 jobs over the
next ten years. The new site, to be known as Filton-West, will be
managed by the recently acquired Airbus Filton wing component and
assemblies manufacturing unit. Production will begin in January
2010, with the new plant making wing spars and trailing edge
assemblies for the Airbus A350 XWB aircraft, while also completing
work for its extended customer base.
Airbus
A350 XWB
The latest phase of the
flagship $150 million Chatterley Valley regeneration scheme in the
West Midlands has reached a milestone with the opening of the North
Staffs Business Park. The 27,687 sq ft business park project,
comprising 17 individual workshop/industrial units ranging from
1,099 sq ft to 3,672 sq ft in size, is part of a $16.5 million
investment that also includes a serviced office centre due for
completion in July. The new business park is strategically located
on the northern fringe of Stoke-on-Trent adjacent to the A500 dual
carriageway, providing direct access to junction 16 of the M6 five
miles west of the site and the city centre, five miles to the south.
Councillor Adrian Knapper of Stoke-on-Trent City Council, a board
member of the North Staffordshire Regeneration Partnership, said:
“The overall aim of the project is to provide an innovative
industrial park which embraces the latest thinking in
sustainability. The whole Chatterley Valley project is expected to
create around 4,000 jobs in North Staffordshire by 2030.”
Blackpool Council in North West England has signed a $330 million
development deal that is set to transform the town centre and create
a new business district. The Talbot Gateway agreement marks a major
step forward for the regeneration of the North West resort town.
Centred around Blackpool North Station and Talbot Road, the
24.7-acre project will see the creation of 1.72 million sq ft of new
office and business space, complemented by retail space and hotels,
cafes and restaurants. Sir Howard Bernstein, Chairman of ReBlackpool,
which has been working on the scheme since 2006, said: “This
agreement marks the culmination of three years of hard work and
marks a significant milestone in the regeneration of Blackpool and
its transformation into a year-round resort.”
Photo Therapeutics, a healthcare technology company spun out of
Manchester University in North West England, has been bought by a US
medical firm PhotoMedex, headquartered in Pennsylvania, for $21.3
million. Photo Therapeutics develops specialist non-laser light
devices to treat patients with serious skin conditions, including
melanomas and psoriasis. The technology was patented by Colin
Whitehurst, a researcher at Manchester University’s Paterson
Institute for Cancer Research. The company was developed by UMIP,
the University of Manchester Intellectual Property commercialisation
company. Sue D’Arcy, chief executive of Photo Therapeutics, said:
“The acquisition gives us the opportunity to utilise the direct
sales force that Photo Medex has in the States and move to the next
level with our technology.”
The University of Liverpool, also in North West England, has been
awarded $5.3 million to transfer research into industrial
applications. Funded by the Engineering and Physical Science
Research Council (EPSRC), the institution will create the Knowledge
Exploitation Laboratory, which will examine ways to reduce the time
it takes its commercial partners to benefit from innovative
developments. The initiative will permit the university’s physics,
chemistry, engineering, electrical engineering and electronics
departments to work more closely with organisations in the
manufacturing and industrial sectors. The award is part of a wider
$82.5 million scheme by the EPSRC, which has also seen the
University of Sheffield, in Yorkshire and Humber, receive an $8.6
million grant to carry out knowledge transfer.
North American telecommunications company BTI Systems has opened a
new $10 million European headquarters in Belfast, Northern Ireland.
The global telecommunications company, which develops systems for
the delivery of high-bandwidth voice, video and data communications,
announced in October 2008 that it would invest to create a base in
Belfast; the new HQ and Software Centre of Excellence at Montgomery
Street in the city centre will create 60 skilled jobs over the next
three years. Inward investment agency Invest Northern Ireland
provided $990,000 towards the total project costs. Alastair
Hamilton, the new chief executive of Invest NI, speaking at the
opening of the development, said: “By 2011, 60 people will be based
here, engaged in software development and the delivery of advanced
technical solutions for a prestigious international client base.”
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