Executive Director’s Report

                                    April 2010

MPs backed Business Voice WM’s demands for more action to provide rural affordable homes. The first steps to refurbish Birmingham International Airport were made following complaints from Business Voice WM. Training needs for professionals to access the Islamic finance market was debated at a special event. The first steps were made to implement a major action plan to assist the textiles sector.

Transport

Business Voice WM has stepped up the pressure for action to spruce up ‘shabby’ Birmingham International Station.

It has written to the Department of Transport to ask it to intervene.

The latest move follows questions to Virgin Trains about what plans the operator has to do something about the problem.

The difficulty is that Virgin has responsibility for the station under the terms of its West Coast Mainline franchise, but Network Rail owns it.

So who is responsible for the station needs to be cleared up.

Glyn Pitchford, BVWM business sector representative for the Birmingham and Black Country City Region, has stressed the need for “a bright and enhanced” complex.

He maintained: “Its shabby appearance and poor lighting on platforms is off-putting for passengers and harms the positive branding of the West Midlands for tourists, business travellers and inward investors.”

And Mr Pitchford has now taken the matter to the National Networks Group at the Department for Transport.

In a letter to Mike Mitchell, director general, he urges that either a facelift be made a requirement when the franchise next comes up in 2012 or the matter taken out of the hands of Virgin entirely.

Requesting a meeting, Mr Pitchford states: “This station is not just for Birmingham International Airport and the National Exhibition Centre – important though that is – it is effectively the international gateway to the West Midlands region. With business customers travelling from Worcestershire, Herefordshire and Warwickshire, its regional, national and international significance cannot be overestimated.

“Therefore, either a requirement should be included in the franchise from 2012 that this station needs improvement or alternative arrangements such as enabling the station to be operated independently needs to occur.”

Amplifying on the letter, Mr Pitchford went on: “In contrast to the NEC's recent investment and the £50 million upgrade to the airport last year (with more to come), Birmingham International Station is an embarrassment.

“When opened in 1976 it was a regional showpiece, which recognised the cosmopolitan and international nature of the customers passing through it.

“It was the first major new station since the 1890s when Marylebone in London was built.

“With the exception of a few, relatively minor, enhancements, it has been untouched for nearly 35 years. Some claim that one part has only been painted once in that time.

“Yet the general response appears to be that ‘there are many stations worse than this’.

“There needs to be a quantum leap in the appearance, facilities and services provided.”

Following these complaints, the station was painted during the month of April – which, some say, is the first time the station has been painted since it was first opened in 1976.

In addition, Business Voice WM held meetings with senior Network Rail officials about the future of the rail network. Network Rail are responsible for the maintenance and development of the railways. Issues raised at these meetings included:

·         Plans for high speed rail

·         Need for local rail services

·         Need to improve signalling

·         Push for better rail services between Stoke on Trent and Greater Manchester

In addition, Business Voice WM championed the call for an improved transport network in a special debate that was broadcast live on BBC Radio WM.

Rural Housing

MPs have backed the demands of the business community for stronger action to be taken so that there is more affordable housing in rural areas.

The House of Commons West Midlands Select Committee issued their report Planning for the Future: Housing and Economic Development in the West Midlands. It proposes amongst its recommendations that:

• Action must be taken now to tackle the affordable housing crisis in the Midlands;
• New ways need be found to work with business for investment in infrastructure before new house building goes ahead;
• Planning barriers must be removed for energy efficiency measures in homes to move forward with greater urgency.

The recommendations follow Business Voice WM’s calls for action in written evidence to the Committee and when RICS (Royal Institution of Chartered Surveyors) Regional Head of Public Policy and Communications and Business Voice WM Board Member, Debbie Walsh, met with the MPs in Worcester.

Ms Walsh said:

“Business is delighted that the MPs heeded their call of business in stating that the logjam in affordable housing cannot be allowed to continue. Amongst evidence cited by Business Voice WM, the Country Land and Business Association and Herefordshire and Worcestershire Chamber of Commerce emphasised that the delays in getting affordable housing built in rural areas is holding back the growth of key businesses. This is because they are having problems recruiting skilled workers because of this housing shortage”.

“Coming at the start of this General Election campaign, the report is an opportunity for the three main political parties to take note of this issue. We can either continue to talk about this problem decade after decade, or we can take heed of the West Midlands Select Committee report and focus more effective investment on affordable rural housing and improve life for people living and working in our countryside”.

Islamic Finance

West Midlands professionals need specialist training if they are to take advantage of the growing Islamic finance market, a meeting in Birmingham heard.

Now lobby group Business Voice WM plans to drive the issue forward.

“We will be exploring what training can be developed to help professional services firms take advantage,” said Mohammed Nazir, Business Voice WM lead on Islamic finance.

“The intention is to come forward with a package which will prove attractive to both companies and individuals, helping professional firms win work.”

Legal firm Clarke Willmott sponsored the event at its offices in Edmund Street, Birmingham.
Kathy Toon, Head of Office at Clarke Willmott, said: “We recognised the immense opportunity available in the West Midlands and immediately identified Islamic personal finance as a particular area we wished to specialise in.

“We have created a special team to deal with this area of law and invested in training and marketing in order to ensure we are fully prepared to deliver a dedicated legal service.

“The expansion of Islamic finance has been barely touched by the recession and it is important that we embrace all that is on offer.”

With Muslims forbidden by their religion to engage in the charging or receiving of interest, Islamic finance is essentially based on profit sharing.

Some projections have put growth over the next few years at 15 per cent per annum.

Leading institutions based in Birmingham include the Islamic Bank of Britain and consultancy Islamic Finance, Advisory and Assurance Services.

The Muslim Council of Britain – representing more than 500 local, regional and national Muslim associations and institutions across the country – and BVWM have a memorandum of understanding committing the two bodies to work together to further develop Islamic finance.

In 2007 West Midlands car maker Aston Martin was sold for £479 million to a Dubai-based consortium using an Islamic financing technique known as Murabaha.

Murabaha is a mark-up arrangement.
There are several different Islamic finance schemes available and the other most commonly used ones are: Mudarabah, an investment arrangement, Musharaka, a partnership/joint venture, Ijara, a leasing deal, Sukuk, for bonds, and Wakala, for deposit products.

There are said to be more than 550 Islamic financial institutions and Islamic mutual funds worldwide, with estimated combined assets of £360 billion. Another £130 billion in assets lie in Islamic “windows” at conventional banks and financial institutions.

Broadband

Plans to roll out next generation broadband access across the West Midlands conurbation and Telford and the Wrekin stepped up a gear after councils agreed to form a special committee to decide how funding can come together to enable this roll out to begin later this year.

In addition, Black Country councils decided that they would amend their planning strategy so that all new build in the Black Country has to be next generation broadband compliant. Discussions began between Business Voice WM and Telford and Wrekin Council so that such a step could also happen in this area.

On top of this, the Secretariat of the City Region (which covers Birmingham, Black Country and Solihull) began an investigation as to what skills needs would need to be addressed to ensure businesses can access the opportunities from next generation broadband access.

Textiles

Following the launch – with the Regional Development Agency – of the textiles action plan the first steps were made to implement this plan. The action plan will help clothing textiles firms weather the economic downturn. In the West Midlands region, around 20,000 people are employed in this sector. Detailed discussions between Business Voice WM and the Manufacturing Advisory Service have now taken place to make this action plan a reality.

Nominations

Business Voice WM’s Nominations Committee has decided upon the procedures to select the successors to Glyn Pitchford and Peter Wall – who are stepping down after serving for three years as the business sector representatives on the Birmingham and Black Country City Region Board. The Board also covers Solihull and it brings together council leaders, amongst others, to get collective action to deliver major changes to the local economy.

The Nominations Committee also decided on the procedure to select the business sector representative onto the Transport Panel – a new body that will advise the Joint Strategy and Investment Board on transport issues. This Board brings together Business Voice WM, the Regional Development Agency and local authorities on the steps that need to be taken to improve the regional economy.

General Election

Politicians have been warned not to turn their backs on the West Midlands once the General Election is over.

James Watkins, executive director of Business Voice WM, said the region’s companies would deliver, as long as they got some encouragement from Westminster.

He hit out in a speech to the Black Country Diners Club held at Molineux Stadium, Wolverhampton and organised by Absolute Invoice Finance, Mazaars, Wolverhampton Wanderers FC, Black Country Reinvestment Society and Alliance 4 the Black Country.

Paul Kalinauckas, chief executive of the BCRS and a BVWM board member, also spoke at the event.

Mr Watkins said: “This General Election must lead to further help for hard pressed West Midlands businesses.

“It is they who are Britain’s industrial bedrock and that is why measures need to be put in place to help our economy grow and create jobs for local people. Business is telling the three main political parties that they can’t turn their backs on the West Midlands once the election campaign is over while they squabble at Westminster. Helping West Midlands businesses also means helping UK plc.”

Mr Watkins said small and medium sized operators and even some large firms were still experiencing problems in accessing normal bank finance. “We fear a trend towards the banks using invoice discounting. This method is useful as it provides valuable short-term finance on the basis of orders that have been received. But for medium and long-term business planning to invest in machinery or develop new products, other forms of finance such as term loans and overdrafts are also required.”

Access to credit insurance remained a problem. “We are getting anecdotal reports that some credit insurers are turning down construction and manufacturing firms because of the sector they are in – before examining whether these are viable firms by looking at their order books. If true, then this has a knock on effect in many areas such as energy prices where suppliers then demand payment for bills before any power is used – in part, we hear, because of the credit insurance rating.”

And on skills, Mr Watkins emphasised that businesses wanted “bite sized training for workforces on shopfloors rather than a cumbersome curriculum that does not meet their upskilling needs”. He added: “There has been some positive movement in this area – especially in engineering – but we need a major step change in provision to enhance the competitiveness base of the Midlands economy.”

Other issues were the need for a more integrated transport system to bolster the “creaking” network, and on crime against business better co-ordination between the police, companies, councils and others to achieve “a united team in cracking down on criminals”.

Mr Watkins noted: “Despite these challenges, let’s not forget that West Midlands businesses are ingenious and have made the modern world what it is today.

“It is here in the West Midlands that we developed and manufactured the jet engine, the thermal imaging camera, the x-ray, cotton wool, spark plugs, disc brakes, LCD screens, black cabs, computer games – the list goes on and on

“We know how to meet new challenges, make life better and boost our bottom line. Action in Westminster can free up West Midlands businesses to concentrate on the day job and create work for local people. This is what we need now.”