Executive Director’s Report

                                    March 2009

Senior politicians were urged to take action to help the struggling construction sector. Business called on the Government to take urgent action after a report revealed that no one organisation is responsible for the kind of flooding that hits Birmingham and the Black Country. There was a call for a tourism push to attract visitors from the growing Milton Keynes area. Work is taking place in putting together an action to crack down on crime.

Construction and the Recession

More needs to be done to help the hard-hit construction sector, Business Voice WM has told Ministers.

In a paper being sent to Government, BVWM maintains the strategic nature of the industry means it is key to holding together the regional economy.

It states: “Construction is the bedrock. Once this is damaged then sectors from manufacturing to professional services are damaged as well.”

The report acknowledges that civil engineering and construction will benefit from infrastructure investments such as the re-development of Birmingham New Street Station, improved facilities at Birmingham International Airport and other lesser projects.

“But despite these positive developments, there have been a series of setbacks which have led to serious job losses. Examples include Wolverhampton-based Roseville Plastering, which had been engaged on a number of major schemes but who has had to lay off some workers and Chase Midland, which no longer operates.”

BVWM points out that construction was among the first sectors to suffer. “From early 2008 – well before manufacturing and other sectors were hit.”

Construction professionals are top of the list of workers joining the dole queue, according to the latest figures from the Office of National Statistics.

Quantity surveyors, construction managers and many other skilled operators were finding themselves out of a job.

The report states: “The loss of technical resource and therefore expertise has been considerable and there are already signs that an upturn in the fortunes of the UK economy will not see these people return.”

It adds ominously: “An unexpected knock on effect of the credit crunch has been a dramatic rise in worldwide construction fraud.”

Advantage West Midlands is praised for taking “important steps to help the industry”.

It included £48 million worth of gap financing so that key projects could continue; ensuring flexibility in the rules governing funding from the West Midlands Housing Corporation, and continued investment in crucial sites, such as Longbridge in Birmingham, the former MG Rover.

However BVWM urged the authorities “to recognise the need for affordable housing is greater than ever with the number of repossessions across the region increasing”.

In the Potteries it seeks further progress on Stoke on Trent bus station, house building and school rebuilding initiatives.

“We need active promotion and recognition of north Staffordshire as the Ceramics Centre of Excellence with a corresponding focus on design, R&D and specific funding to help sustain the supply chain network.”

Nationally, the paper re-emphasises BVWM’s plea for wage subsidies or short time working assistance to help keep people in jobs.

And it again bitterly attacks the removal of empty property relief.

It charged: “The West Midlands Developers Alliance has stated that when, in a downturn, some firms would consider speculative projects in preparation for the upturn, this has ceased so that they do not have to pay void business rates.

“We consistently receive anecdotal reports of some commercial buildings being demolished to avoid paying the tax. This is damaging as the reduction in commercial properties means it will take far longer for jobs to be created when economic conditions improve.

“This has had a deleterious impact in the West Midlands at the worst time for our regional economy.”

Issuing a blueprint for the future BVWM demanded “at least a 50 per cent reduction” in the tax, an experiment with accelerated development zones to enable local authorities to borrow against rising land values on the back of regeneration, the introduction of council bond financing under Government supervision, and giving regional development agencies more room to manoeuvre in the way they spend their budgets.

This paper was considered by the Minister for the West Midlands, Ian Austin MP and talks have also taken place on this subject with the Conservatives’ Shadow International Development Secretary and Shadow Birmingham Minister, Andrew Mitchell MP.

Floods

Business leaders are calling on Ministers to take action to combat the growing risk of major floods in Birmingham.

A combination of changing weather patterns and the decline in manufacturing means that large areas of the city are at high risk of groundwater flooding.

And worryingly, no one Government body is responsible for dealing with the threat.

Business Voice WM is calling on Environment Secretary Hilary Benn to respond to the concerns raised in a new report by the West Midlands Regional Assembly.

The report, Regional Floods Appraisal, states that with the abstraction of water from the water table having been reduced because of the decline in manufacturing industry, heavy rainfall combined with a high water table puts areas in Birmingham at a “high risk” of groundwater flooding.

Wolverhampton, Dudley and Sandwell are also affected.

The Assembly report goes on to state that when it comes to the problem of groundwater flooding “no one organisation” is responsible.

Business Voice WM Executive Director James Watkins said: “The floods of recent years have had a major impact on businesses and individuals across the region. We now know that we cannot treat the threat of flooding as a one-off risk but as a serious issue that must be managed.

“Taking practical steps to mitigate the impact of floods is critical if we are to prevent hardship for families who are affected. The cost of floods on businesses can be significant – and that is the last thing any business needs now when it is focusing on getting through this recession.

“The statement in the West Midlands Regional Assembly report that no one organisation has the responsibility to deal with groundwater flooding is of major concern to Birmingham and the Black Country – because if there is flooding in these areas it will be a direct result of groundwater flooding.

“That is why we have written to Hilary Benn urging him to respond to the claim that no organisation is responsible for this form of flooding – so that steps can be put in place to achieve a clear understanding of whose job it is to deal with this risk.

“This is the very least the people and businesses of Birmingham and the Black Country should expect”.

Tourism

The West Midlands has urged Milton Keynes to work with it to woo tourists.

And it warns that the region’s economy could be harmed if the fast expanding new town set itself up as a rival.

Business Voice WM has written to Milton Keynes South Midlands Inter Regional Board offering a blueprint for co-operation in a bid to further benefit the Oxford/Cotswolds/Stratford upon Avon tourism triangle.

It is urging joint planning and marketing of ‘cultural assets’ along with a sharing of information.

BVWM has long been concerned that the development of Milton Keynes and its surrounding area has the potential to - on the one hand - be extremely damaging to its neighbours and - on the other - to be a boon to both – for example, to encourage residents there to opt to use Birmingham International Airport rather than congestion-hit Heathrow.

“Cross regional planning is necessary so that tourism assets in the West Midlands can aid the development of the growth area – while new rival centres of tourism in the growth area could prove to be unhelpful for the West Midlands economy,” states the report.

“With established cultural and tourism assets in the West Midlands with easy access to much of the growth area, MKSM could provide a new market for these businesses and venues. Not only would such a development be good for the West Midlands tourism economy, it would aid the sustainability of the growth area, making MKSM an attractive location to live with quality of life amenities nearby.

“Any cultural asset planning in the growth area that attempts to duplicate established brands would cause confusion in the marketplace and would detract from the marketing of those brands.

“However, assets could be developed in such a way that would complement access and establishment of existing brands, such as with hostels and clear public rights of way. Links between emerging cultural assets, such as art galleries and museums, if developed in the appropriate way, would enhance the attractiveness for tourists.”

The report has been put together by the Business Voice WM, Coventry, Warwickshire and Solihull Partnership, Rugby Borough Council, Coventry City Council, West Midlands Regional Assembly, Advantage West Midlands, Culture West Midlands and Culture East Midlands.

Crime

The West Midlands Regional Business Crime Forum has moved forward on developing a comprehensive action plan to crack down on crime.

Crime against business, according to a number of criminologists, will go up during the recession. The Minister for the West Midlands, Ian Austin MP, has responded to this concern by calling on the Business Voice WM to prepare an action plan on the steps that can be taken to combat crime against business.

In March, the Forum decided that it should prepare an interim action plan that can be produced and supported by all public and private sector bodies as quickly as possible in advance of a full action plan being prepared. This will ensure that action is taken as soon as possible to combat against crime during this difficult period.

This work is now in hand and colleagues are being consulted on an initial draft document.

Sport

Workshops were held in Kidderminster and Stafford urging businesses to consider seeking work from the London 2012 Olympic and Paralympic Games. The 2012 Games is the UK’s biggest single procurement opportunity since the end of the Second World War.

In the meantime, agreement was reached for the Business Voice WM to be part of a small working group that will consider if Birmingham should bid to host the 2022 Commonwealth Games. The small working group is meeting under the aegis of the City Region – which brings local authorities across the West Midlands conurbation together.

Broadband

Work is now advanced on plans by councils in the West Midlands conurbation and Telford to roll out next generation broadband across this area. Business Voice WM and Walsall Council are leading on this work. The ability for high speed generation broadband access at the heart of the Midlands would make the Midlands even more attractive for inward investors. Mapping work of broadband connections is largely completed and the issue of funding the work is now on the agenda. The small working group is meeting under the aegis of the City Region – which brings local authorities across the West Midlands conurbation together.

Skills

The Business Voice WM has agreed to work with Career Academies UK to ensure businesses can be involved with the work of local schools. Career Academies UK help foster links between businesses and local schools so that children can find out more about the world of work.

Business Voice WM held talks with the Regional Development Agency on the steps that need to taken to ensure the transfer of further education  funding from the Learning and Skills Councils (LSCs) to local authorities is seamless – with funding staying as demand led. Business Voice WM will be discussing this issue directly with Solihull Council – the lead authority for all regional councils on this issue. The LSCs will be abolished in April 2010.

In the meantime, Business Voice WM agreed in March with other members of the City Region that a bid for new money from the Government to fund training for the poorest areas in the West Midlands conurbation should take place. The City Region brings local authorities across the West Midlands conurbation together.

Planning

Business Voice WM has been successful in getting changes to a planning consultation document that is due to be issued by the West Midlands Regional Assembly.

The Assembly will be consulting on a series of changes that could take place in the regional planning regime – technically known as the Regional Spatial Strategy. The issues that will be considered include energy, minerals, rural public services and sporting facilities.

The draft consultation did not cover a series of issues such as the role of coal, methane as an energy sources and one stop shops for rural public services. All this has now changed and the new consultation, that will be issued in June, will cover all of these issues.