Industry news round-up

Industry News

1. Banks lose guarantee on £240 million of COVID loans

Lenders have found errors in their own pandemic loan scheme vetting systems, leading to the government removing the guarantee from more than 7,400 Bounce Back Loans worth more than £240 million. Former government minister, Lord Agnew, whose brief included counter-fraud, acknowledged that the BBL scheme had been an important intervention but slammed the government for its “woeful” efforts to control the risk of fraud. In an interview with the Times he said that the scheme “could be costing us hundreds of millions of pounds a month.”

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2. Two-thirds of SMEs without cyber insurance

Cyber insurance is on the rise, but two-thirds of SMEs are still without cover, according to Aviva’s latest SME Pulse Survey. The survey also found that the number of SMEs with cyber cover grew to 42%, while more than a third (38%) plan to increase online sales. 38% said they were worried about the threat of cyberattacks. Fears around cyberattacks appear to be driven by experience, with 13% having suffered an attack and those who had experienced or knew of a cyberattack, 66% indicated it happened more than once.

3. Number of distressed businesses rises

The number of UK businesses reporting “significant financial distress” rose in the three months to 31st December to 589,168, a 5% increase from the quarter before, according to Begbies Traynor. Julie Palmer, a partner at the firm, said: “Businesses that have bravely battled through the pandemic could now start to fail as the pressures they face become too much.” Separately, the Insolvency Service has revealed that a record number of companies went into voluntary insolvency in England and Wales at the end of last year.

4. High street vacancy rates fall in Q3 2021

The number of boarded-up shops on high streets and in shopping centres has fallen for the first time since the beginning of 2018 according to the Local Data Company. Analysis shows high street vacancy rates fell to 14.4% between October and December 2021, compared to 12% before the pandemic. Retail parks remain the most popular destination for shoppers, with an average vacancy rate of 11.3%. London has the lowest proportion of empty shops, with a vacancy rate of 11%, in contrast to the North East of England, where one in five shops is unoccupied.

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5. Small business owners reveal wellbeing concerns

A study by webhosting firm GoDaddy shows that one in three small business owners in the retail sector say they are suffering poor mental health and wellbeing. The poll saw 29% of entrepreneurs in the entertainment and arts business say the same, as did 26% of IT and technology company owners and 28% of those in media and advertising. The analysis also found that on average, small business owners sleep just 6.3 hours a night, 1.3 hours less than the average person.

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6. UK factory costs rising at fastest pace since 1980

Cost pressures for manufacturers are rising at their fastest pace since 1980, the CBI has said, as output growth remains limited by bottlenecks and difficulties finding staff. The CBI warned that higher manufactured goods prices were inevitable. Rain Newton-Smith, the CBI’s chief economist, said government action was needed to ease cost pressures from spiralling energy bills and to encourage investment.

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7. Small firms optimistic but barriers to growth remain

The latest Small Business Index report from the Federation of Small Businesses (FSB) has revealed that 54% of small businesses in the UK expect to grow over the next year. However, many are highlighting concerns over recruitment difficulties, inflationary pressures and tax rises in April. FSB national chair Mike Cherry said: “We urgently need the UK Government to start looking closely at the policies that will empower the small business community to spur our recovery from this recession as it did the last.”

8. British Business Bank publishes updated list of company investments

The British Business Bank has added 108 companies in which the Bank’s Future Fund holds an equity stake, taking the total to 265 at the end of 2021. Launched on 20th May 2020, and open for applications until 31st January 2021, the Future Fund issued 1,190 companies with Convertible Loan Agreements worth £1.14 billion in total. Third-party investors were required to at least match the Future Fund’s investment. Companies in which Future Fund is now a shareholder include a number of technology and fintech businesses.

9. Apprenticeship levy needs tweaking to help SMEs

Nearly half of firms subject to the apprenticeship levy have returned unspent funding to the Treasury according to a survey for the London First campaign. Although there is a clear appetite for recruiting apprentices, with 80% of businesses planning to hire at least one in the next year, 48% of businesses had to return apprenticeship levy funding to the Treasury over difficulties in how the levy can be spent. Just under a quarter of businesses said they were unable to use any levy funding within their own organisation, while just 51% of firms transferred unspent funds within their supply chain.

10. FCA staff back industrial action

Staff at the Financial Conduct Authority (FCA) have voted in favour of industrial action over proposed reforms to pay and working conditions. Staff are said to be unhappy about certain reforms that have been put forward as part of FCA chief executive Nikhil Rathi’s transformation plan. Among areas of contention are cuts to pension rights and the abolition of bonuses that union Unite says could lead to pay reductions of 10% to 12%. The union also said FCA staff had complained of an “unfair appraisal system” and pointed to “unusually high” levels of pay inequality at the regulator compared to other public watchdogs.