Rebalancing the Economy

I am sure many people who followed the chancellors spending review statement were trying to determine how the reduction in public funding would affect them personally, in most cases they are probably still wondering.

We have had the headlines but its the detail that really matters and that will take some time to emerge.

The area that I keep coming back to is the levels of employment/unemployment, with over 400,000 public sector jobs being lost and the subsequent knock on effect on jobs in the private sector; yet the coalition is confident that the economy will continue to grow and the private sector will create over a million jobs in the next four years, rebalancing the economy. I believe the appetite to start businesses is as strong as ever: calls to BIP asking how to start up a business are increasing faster than I can remember.

The key to a succesful start up is having enough customers who are willing to pay for the product/service being sold, my concern is will there be enough money avaliable to keep all these new businesses afloat, if not all the hopes for the recovery may be shortlived. Lets hope the goverment have got their sums right.

Tesco Profits - Good or Bad?

Tesco have just announced record half year profits of £1.6 billion. I am sure their suppliers will be arguing that this is wrong and Tesco should pay them more.

Certainly beef and milk producers have a strong argument for wanting higher prices for their produce but is £1.6 billion excessive? Not really, is the answer, it equates to a profit of 5% of turnover. Its the huge sales that Tesco have that is questionable as they constantly seek to build their sales squeezing out small retailers that cannot exist on a 5% return on turnover. Business owners reading this may want to check their figures to determine the % they achieve, for many businesses it will be much better than 5%.

LEPs – Can they improve the local economy?

As a Cornish man working in Devon I am following the debate on the shape of Local Enterprise Partnerships in the far South West with interest.

With so little guidance from government England is rife with variants of mini RDA’s and county based Economic Development Units. The latest information is that between 56 LEP’s have been submitted. I can’t believe that the coalition partners want to replace 8 RDAs with 56 LEPs. Bids for funding and contract size would either be very small or have a very low success rate with many local communities disappointed. I can understand the Cornish view of a county based LEP but worry about how much funding it will be able to win. The convergence programme has not got long to run and to compete with the North East and the North West will take some imaginative / innovative bids. I think government will influence the final outcome once it feeds back to the LEP partnerships. Your thoughts?

Support Cuts on the horizon for farmers?

Even without the need for cuts in public expenditure following the economic downturn, farmers were already wondering if payments to agriculture would be reduced after 2012.

The indications are filtering out from the EU Commission that they are considering quite steep cuts in the agricultural budget for agriculture. Britain’s farmers receive just under the average payment than the other 26 EU countries so perhaps we will not be disproportionately hurt by a levelling of payments that will inevitably occur. How would your business cope with perhaps a 50% cut in EU support? Have a look at the last 3 years of your accounts, reduce the Single Farm Payment and the Environmental Payment by half and plot the profit and loss might be an interesting exercise.

By way of introduction

Those of you who know me will have noticed the grey hair is taking over and may wonder what Stewart is doing “blogging”, I am not sure myself but here goes!

This is the first on many entries to be carried on the new BIP website. I hope you like it and will contribute your thoughts, comments and ideas on a regular basis.

So to start, let me give you a quick résumé of myself so you will understand why I will write about certain subjects.
I have been working at BIP for over 11 years, initially joining as an Agricultural Project Manager – somehow I seem to have ended up as the MD! This wasn’t planned but I guess I don’t know when to keep my mouth shut. I have an agricultural background being a tenant farmer in Cornwall for almost 30 years mostly rearing sheep. Recently we’ve introduced New Zealand blood lines to build a flock that is easier to manage, has less foot rot, less worming need and will perform on grass alone.

I have other roles connected to both BIP and agriculture, these include director of farmer co-op CQLP, director of NFEA (the national enterprise network), and vice chair of the Greater Dartmoor Leaf Local Action Group

I take great pleasure in seeing rural businesses thrive, particularly when the BIP team has helped with training or advice and I’m always seeking the views of business owners to shape the BIP offer. Your comments and thoughts are always welcome.