BQ Yearbook 2013 by We Are UMi

YEARBOOK 2013

The life and soul of business.

Champion 2012

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WELCOME We have wings No matter how disappointing the state of our end-of-year financial accounts, we’re probably all relieved the ancient Mayan prediction didn’t come true, and that our recent seasonal celebrations were not pre-empted by the ending of the world. It shows how unreliable long term forecasting can be. But you always have to have a plan, even so. Come early spring, the Government will have before it a study prepared by a very able North East Commission, which is presently trying to visualise the region’s future and prospects up to the year 2030. The handover of this report could go one of two ways politically. It could be filed and forgotten, as many important reports are. But all being well, it will be acted upon, since it could help to close the NorthSouth economic divide that damages the entire nation. The report would then have been seen as a catalyst, like Lord Hailsham was in person during latter days of the Macmillan government in the 1960s. Ministerially responsible for the region, he visited it wearing tackety boots and a cloth cap – no sign of a whippet, though. He promised regeneration for the region whose great industrial traditions of coalmining, shipbuilding and steelmaking were already nearing collapse. For a while the region had reason to feel it was receiving fuller consideration at Westminster. Prime Minister Macmillan had long championed the North East as MP

for Stockton, even risking his future prospects early on by vigorously opposing prime ministers whose economic policies, he felt, didn’t help industrial regions such as the North East. For much of the time postMacmillan, however, odds on the North East realising fuller economic potential have widened. If the 2013 report is authoritative – we don’t doubt it will be – and if it is acted upon immediately, the region could have much to look forward to, even though the economy as a whole will be challenged for some time yet. Encouragingly, deputy prime minister Nick Clegg, who will receive the report, has already pointed out how the UK economy for too long has been focused on the City of London, ignoring the potential powerhouses of North East cities “where business can thrive, where things are built and made.” As this yearbook bears out, the North East is a place renewed, still with problems, but with its business sector much improved. Indeed, it leads other parts of the country in some respects. The critical task will be to persuade the Government to get things moving before 2015. Come Election time, anything might happen or – heaven forbid - might not.

advertising 0191 537 5720 [e] sales@room501.co.uk Editorial Brian Nicholls [e] b.g.nicholls@btinternet.com Andrew Mernin [e] andrewm@room501.co.uk Design & production room501 [e] studio@room501.co.uk Photography KG Photography [e] info@kgphotography.co.uk Chris Auld [e] chris@chrisauldphotography.com

The life and soul of business. room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2012 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, December 2012. room501 publishing Ltd is part of Business & Enterprise Group, the UK’s market leading business improvement specialist. www.business-enterprise.net

Brian Nicholls, Editor BQ Yearbook is published annually by room501 ltd.

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06 REGIONAL Economy An update on the economic state of the region and a look forward to the year ahead

24 nEW Economy Focus on the key sectors which could shape the North East’s economic future

36 MANUFACTURING & OFFSHORE Traditional skills continue blossom as does a sharpened ability to specialise to market demands

COMMUNICATIONS & TRANSPORT The inside track on the challenges and issues threatening the region’s competitiveness

76 WHO’S WHO Invaluable information on some of the North East’s most prominent private and public sector players

96 MONEY MARKETS 46 SMALL BUSINESS As cash flow concerns mount, why support in New opportunities emerge for SMEs in burgeoning unexpected places may be out there industries, while other areas struggle

UNIVERSITIES In association with:

How North East businesses benefit greatly from five universities and more than 30 colleges

60 VOLUNTARY SECTOR How pride and loyalty are helping to overcome the impact of deep cuts in the region

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106 SERVICE SECTOR In association with:

In a region which leads the way on service, why retailers are innovating and security is on the up

116 BUSINESS SUPPORT In association with:

The potential problems, solutions and dangers facing aspiring entrepreneurs in 2013

126 EXPORTING In association with:

How the North East is leading the jobs recovery and where the bright spots are

144 CONFERENCING & HOSPITALITY How visitor economies on Tyneside, County Durham, Northumberland and Teesside are faring

154 EVENTS Look forward to the top business events of 2013

Overseas trading remains the key to growth for an ever increasing army of North East firms

130 BUILT ENVIRONMENT In association with:

140 TRAINING & RECRUITMENT

A look at the vital issues impacting on commercial property and other built environment in the region

116 05

regional economy Things appear to be moving fast towards a high power programme of proposals to the Government for a better economic deal in the North East. At the same time, throughout the entire region, benefits of recent investment are becoming evident

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regional economy

A crucial stage for the North East economy With a major review of the regional economy currently under way, BQ Yearbook asks one of the influential business leaders behind it, Heidi Mottram, for a progress update In autumn 2012 the North East Local Enterprise Partnership (NELEP) commissioned a high profile team of leaders from UK finance, industry, public and civil society to produce a strategic, constructively critical review of the North East economy. The private-sector led review team includes Will Hutton, former editor in chief of the Observer, now chair of the Big Innovation Centre and principal of Hertford College, Oxford; Lord Don Curry, leading businessman and chair of NFU Mutual; Bridget Rosewell, economist and chair of Volterra Partners; and the Right Reverend Justin Welby, the Bishop of Durham. Also among the influential band of business leaders is Heidi Mottram, CEO of Northumbrian Water and member of the CBIâ&#x20AC;&#x2122;s national infrastructure panel. Here she gives BQ Yearbook an update on how the commission is shaping up. BQ: Is the commission making good progress so far? HM: Yes. In addition to meetings and conversations in the region and London involving the review team, the nine experts from across the UK, wider EU and USA are all fully engaged on their think pieces and preparing for seminar events in January. The university-led call for evidence from businesses in the region has been going very well, and Sunderland and Northumbria deserve

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regional economy much praise for the way that they have immersed themselves in this. We’re getting good support from Whitehall departments too, including really generous secondments from DfT. There’s much going on but a lot still to do. How often is it meeting and where? Andrew [Lord Adonis the chairman] has asked us each to lead on particular workstreams and so we are each beavering away with the LEP executive team, keeping the connections between us going. Just last week Will Hutton was in the region at the Franco-British Council event. The commission will get together from mid January to compare notes and begin to form conclusions - sometimes in the North East, sometimes in London. Is it getting the level of input it would like from outside bodies of the region, and does it detect sufficient sense of involvement? We’re focused on the right things for the two million people who live in the NE LEP area. Of course this means that we’re also engaging with near neighbours and with those at the other end of supply chains and decision making processes. Will the commission consider setting a programme of action for the North East’s future economy in a situation where its neighbour and regular inward investment rival Scotland became independent? We’re not going to second guess every possible scenario - we’d never finish - and I think that the answers for the NE LEP will be very similar in a UK with or without Scotland. We are in a global marketplace so this question is small compared to the competitive issues we face in Europe and globally. We need better education and skills outcomes,

better physical and virtual connectivity and the best possible environment for enterprise to flourish and people to have prosperous and fulfilling lives, whatever the end point of that debate. Will LEPs be confirmed ideal machinery for administering regional economies up to 2030, or will alternatives be considered? This is not something that the review is considering and I’m not sure that the LEP is precious about anything other than the future prosperity of the North East.

Looking ahead: Key figures in the long term proposals for the economic advance of the North East, Heidi Mottram and Lord Adonis. If LEPs are felt to be fit for purpose will the commission examine the argument by the Federation of Small Businesses that the LEPs need more adequate core funds to deliver full potential? As I said before, the issue of LEP’s isn’t something that the commission is considering. Will the commission make recommendations about the CBI’s contention that LEPs should be encouraged to work collaboratively? The commission will consider key considerations to grow the North East economy, where these considerations

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include cross LEP working to get best results I am sure the business community will encourage the LEPs to do this. The CBI wants to ensure sensible collaboration to get the best outcomes. From my understanding, there is already quite a bit of dialogue and cross working which I encourage. Will it also consider the CBI’s recommendation that the Regional Growth Fund (RGF) should be reformed? The RGF is one tool available to the LEP and the region’s businesses. It is a short term opportunity for businesses to bid for investment based on their ability to create jobs in the short term. This is important in light of current unemployment but the commission is also looking to the longer term so will be considering how we deploy a range of policies – those currently available and potentially asking for new approaches or flexibilities from government where this would create a significant return on investment for both the North East and UK Plc. It’s too early to say what changes of policy or new approaches we will be asking for as we are still in the evidence gathering stage. Will the commission consider whether further central government investment to this end is needed? Absolutely. But let’s not pretend that central government investment is the answer to everything. The private sector - companies such as my own invests far more in infrastructure than sometimes people recognise. Getting the national grid ready for offshore wind is as critical to success for that sector as many things that government does. Will the commission, on transport connectivity, consider

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regional economy

We’re not going to second guess every possible scenario - we’d never finish - and I think that the answers for the NE LEP will be very similar in a UK with or without Scotland

recommending the Government to give fuller and more satisfactory consideration to the urgent need of more air slots for accommodating flights between the North East and London as a central hub? We’ll look at the connectivity of the region to all places - and won’t be shy about what the level of aspiration needs to be. Will the commission consider whether the North East needs two airports and how such an ongoing facility will be supported? The commission is looking at connectivity at a national and global level, to give the North East the best possible offer in our markets. That connectivity is the real issue and how it can best be delivered. Given the outstanding success for North East business which is resulting from the introduction of international daily flights to and from Dubai (via Emirates), will the commission argue that regional airports should be supported to introduce more of the same such as, in Newcastle’s case, daily connections with New York? The North East trades, and by value the USA is our most important trading partner. Connections to many destinations in the States are critical, and since this will mean access through a hub it is vital that both the existing Heathrow and Amsterdam links are maintained as well as promoting a

direct flight to an American hub such as Newark. I think with air travel and the North East there really is an argument for “build it and they will come”, but clearly this is a commercial decision and that belief will need to be evidenced for a carrier to open a new route. Will it consider whether, on the East Coast main railway line, the North East’s place in an HS2 era should have higher visibility than it is getting presently? Absolutely. Andrew, Bridget [Rosewell] and I all have direct but different expertise in rail and will be giving this particular attention. We know that connectivity boosts employment and adds value and opportunity, and what is more, rail is the most sustainable means of mass transit. Will the commission back up its own arguments with the recent finding of a YouGov study, to effect that the North East will be given better recognition as a place for UK start-ups as economic dependence on the South East recedes? Although the stats on VAT and

company registration suggest fewer start ups in the North East than elsewhere, the level of support for SMEs - in particular access to venture capital for those who reach this stage - is probably as good here as anywhere. And for companies that find their niche the chances of bounding into very high growth are as high here as anywhere. Could the environment for start ups be better? Yes of course, and I don’t doubt that we’ll have things to say about the quality of corporate leadership, enterprise acumen and the availability of support for new and growing companies. Will the commission give social as well as economic consideration to the fact that nearly 25% of North East households have no-one in work, on ONS reckoning? The LEP has asked us to target employment and productivity, which is an economist’s way of saying that we’re wanting the region to offer active and rewarding lives to everyone. The biggest advance in productivity for an individual is moving into work, and with the right social environment around us that move into work heralds independence, choice and more control over your future. So recommendations whose effect reaches everyone, in work and out of work, are key to meeting our stated objective. n Heidi Mottram, thank you.

Recommendations whose effect reaches everyone, in work and out of work, are key to meeting our stated objective

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opinion

Partnership drives progress Tens of millions of pounds invested and more than 3,400 jobs created or protected indicates the extent of Tees Valley Unlimited’s progress to date, achieved through strong partnerships, says Sandy Anderson

A round-up of achievements to date by Tees Valley Unlimited shows the local enterprise partnership involved in tens of millions of pounds of investment, and the creation or safeguarding of more than 3,400 local jobs. This progress would not have been possible without the support of our partners, particularly the five local authorities. This collaborative working with the support of stakeholders across the private, public and voluntary sectors in Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton has been the bedrock of our success so far. We are committed to further widening and improving the relationships we have with businesses, government and partner organisations to increase our ability to remove barriers and encourage economic growth. The economic progress made includes:

• Since April 2011 TVU has directly supported projects to secure a total of over £367m capital expenditure to the Tees Valley. • A total of £16m of Regional Growth Fund (RGF) finance has so far been released into Tees Valley, leveraging in an additional £153.9m capital expenditure and securing 2,411 jobs. • Two RGF projects have been completed - the new Nifco factory taking the company into the electric vehicle battery market and a workforce development scheme at SSI Redcar. These involve more than 1,200 jobs. • Five RGF projects are underway at AV Dawson, Lotte Chemical UK, Cummins, Huntsman Tioxide and Darchem, which will create or safeguard more than 1,200 jobs. • Two RGF programmes supporting small and medium sized companies have started, the first managed by Nepic - the North East Process Industry Cluster - and Let’s Grow led by ncj Media. • Five companies have located on to the Tees Valley Enterprise Zone Omega Plastics, Propipe Limited, Air Products, Traceco and Durable Technologies. This represents a total investment of £200m creating 111 new jobs. • Since 2007, the TVU Partnership has

secured more than £23m of European Regional Development Funding (ERDF), leveraging an additional £25m match funding, which will create 1,460 jobs, safeguard a further 915 jobs and create or attract 277 businesses to the area. Nine more projects have been selected onto the programme and are currently developing full applications with potential to secure £17m ERDF and £22m match funding. The Tees Valley LEP has directly supported two-thirds of this investment. Our strategies have moved to the delivery phase, and this overview demonstrates that results are starting to be seen. With the support of our partners, we are committed to creating an environment that encourages sustainable economic growth and long-term prosperity, allied with transforming Tees Valley into a high value, low carbon, more diversified economy. A full report and interactive TVU Partnership business plan is available on www.teesvalleyunlimited.gov.uk n Sandy Anderson is leadership board chairman of Tees Valley Unlimited, the local enterprise partnership for Tees Valley.

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regional economy

Millions coming in In its first full year of operations aimed at transforming the region’s productivity and economic health, the North East Local Enterprise Partnership has secured many millions of pounds. Edward Twiddy gives the detail The North East Local Enterprise Partnership (NELEP) has used its first full year of operations to initiate major projects that will bring about long-term changes to the productivity and economic health of the region. We have also bid for, and won, funding worth many millions of pounds, the results of which you can already begin to see across the area as the Growing Places Fund starts to bite. However, we need a clear route map which sets out the most effective directions for investment in skills, infrastructure, business support and public policy. In 2012 we commissioned a high ranking team of leaders from UK finance, industry, public and civil society to produce a strategic, constructively critical review of the North East economy. In 2013 the team will provide five recommendations for direct action by NELEP, five recommendations for us to take forward with our partners, and five recommendations to national government to shape economic growth in the North East up to 2030. Each member of the team leads on specific aspects of the economy. For example, Heidi Mottram, chief executive of Northumbrian Water, will lead on the North East’s position in a global economy and support Lord Adonis on transport. Lord Don Curry,

who chairs NFU Mutual, has agreed to head up land markets and the rural economy. Will Hutton, principal of Hertford College, will have responsibility for the enterprise and innovation workstreams. And Bridget Rosewell, economist and Chair of Volterra Partners, will lead on inward investment and trade. INFRASTRUCTURE: Our active, enabling role has strengthened the region’s ability to win major new funds for the region and bring forward funding for some of the big schemes. NELEP was awarded £30m from the Government’s Regional Growth Fund for a North East Infrastructure Fund to support projects. The infrastructure fund will create more than 2,300 jobs in the next 10 years. ENTERPRISE: In August 2012 George Osborne announced a commitment to extend the North East’s enterprise zone

sites – a 50% increase for sites with Enhanced Capital Allowances. We are working hard to attract new investors into the North East, building on the success of Vantec’s decision to locate its £22.5m investment on the North East EZ near the Nissan plant in Sunderland. This was the first major investor in the UK to be building on site at an EZ. The North East enterprise zone at the A19 in Sunderland, on the River Tyne and the Port of Blyth, offers a package of benefits to advanced manufacturing firms that are attracted by opportunities in offshore, automotive and other growth sectors. The future year looks extremely busy. The Rural Growth Network, a new funding stream in Northumberland, Durham and Gateshead, is already bringing new enterprise hubs to areas such as Wooler and Alnwick. And if successful an additional £750,000 of European funding is set to create enterprise services to support the start-up and growth of small businesses in more remote rural communities. FUNDS FROM EUROPE: NELEP and other LEPs are likely to play a major role in influencing the future of European structural funding post-2014. n Edward Twiddy is director of North East Local Enterprise Partnership.

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overview

The ides are approaching There is no one leader with clout to descend on Westminster and fight the entire North’s good fight for its future - unlike Scotland its neighbouring rival for inward investment. But Brian Nicholls wonders if a small group has the potential to gain ground instead Beware the ides of March... a friendly whisper to government, due to get by then the hopefully “constructively critical” review asked of the North East Commission which is focusing on productivity and jobs growth in the region from now till 2030. Deputy prime minister Nick Clegg, who will receive the report of the commission, has been encouraging from the start. “For too long,” he concluded, “the UK economy has been focused on the City of London, ignoring the potential powerhouses of North East cities. This region is a place where business can thrive, where things are built and made.” The review is tipped to challenge many existing assumptions and approaches, and the high profile team is already receiving plenty of input to consider, as Heidi Mottram mentions earlier in this publication. Indirectly, sound observations have already been made by Lord Heseltine, a good friend of the North East who inspired the birth of Tyne and Wear and Teesside Development Corporations during the 1990s trough. He has made 89 recommendations for a stable economy, conditions for growth, and maximised performance of the UK as a whole – but with measures

enabling the potential of local economies and leaders to bed unleashed also. He wants the broad picture to include: A national growth strategy set out by a

council the Prime Minister would chair, to define the role of local leaders and the private sector in wealth creation of wealth. LEPS to tailor their own local economic

Such sweet music The decision by the multinational Rio Tinto Alcan to cease aluminium smelting at Lynemouth was a blow to 515 workers but many already have prospects. German energy giant RWE has bought the 420MW coal-fired plant there and a decision will be made soon on whether to convert the plant to biomass. It is hoped 120 jobs might be safeguarded that way. Other employees are making for Arab smelters or are being snapped up by neighbourhood manufacturers hungry for skilled labour. At Ashington the Dutch international paint manufacturer Akzo Nobel is building its relocated UK operations. Millionaires in the North East now total 14,000 (up 17% in two years), and among these are a growing number of entrepreneurs and business angels investing in local business and development, says Barclays Wealth. Indeed 1,000 are worth £5m or more, and the percentage growth is topped only in London and the South East, and in Scotland. But percentages deceive. London and the South East has 287,000 millionaires in all - more than the populations of Sunderland or Newcastle, it has been pointed out. And in further contrast, nearly 25% of North East homes are without an earner, the most disturbing figure of its kind in the country. This humanitarian issue which successive governments have failed to resolve is surely one the North East LEP’s commission should consider closely. Unemployment in the region runs 2+% above national average – perhaps tens of thousands even higher, some academics suggest, since many others unemployed but capable of working remain, despite government policy, on incapacity benefits. Little wonder October’s formal announcement that the longest double dip recession since the 1950s had finally ended was sweet music to many who are seriously trying to find full-time, long-term work between the Tweed and the Tees.

bq-magazine.co.uk overview

regional economy

Big licks: Hitachi when building trains at Newton Aycliffe will represent a £77m investment.

plans. From 2015-16 they would compete for a share of a single national pot to support growth over five years. This would account for £49bn of central public spending on skills, local infrastructure, job support, housing,

business support services and innovation. It would be supplemented by an existing £9bn of European funds. Government and private sector creating together a strong, locally based business support infrastructure. (Some

The North East region withstands global economic buffeting better than many other parts of the country

£2,730 per person is being invested in transport for London and the South East, against £5 in the North East, and even allowing for Olympics infrastructure that’s some gap.) Chambers of Commerce with a bigger role in building stronger relations between businesses and LEPs. Lord Heseltine’s vision has struck a chord with Paul Woolston, chairing the North East LEP. He says: “Bringing the levers of growth closer to those who understand the differences in local labour markets and local economies

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regional economy must make sense, and lead to better value for money.” Some may consider proposals from the Institute for Public Policy Research North even more radical. It points out that the North as a whole would be the EU’s eighth largest economy as a country in its own right. While not arguing on for independence, it says switching investment and powers from the City into northern England would tap into a vast potential and speed national recovery, since halving the output gap between the North and the national average would raise total economic output by £41bn. Better balanced transport investment and the creation of a £1bn northern innovation council would largely unlock the North’s greater potential to the good of the nation, it adds. All these suggestions the North East Commission will no doubt consider, also analysis of the region’s performances by economists and academics. Lord Andrew Adonis, the former Secretary of State for Transport and Minister for Schools who chairs the commission, promises the encouragement of a greater entrepreneurial culture. As Edward Twiddy, NELEP’s chief executive, points out: “The world will be very different in the future. Our workforce will be older, connectivity will be increasingly important and who knows what the next technological breakthrough will be? “We must also think about capacity of our energy markets.” The business-led LEPs of England, unable to deliver even vital rural needs such as broadband, are underpowered as yet, reliant largely on their £5m of start-up funding. Insufficient private sector support has them over-reliant on

overview

my 2013 wishes... Steve Cochrane Founding owner, Psyche fashion store, Middlesbrough “I would like to see a return to the ‘normal’ level of VAT - 17.5%. With VAT at its current rate, businesses are being strangled. I would also like to see the Government, more local councils and landlords helping fledgling small businesses to take up some of the empty shop units starting to blight all town centres. Incentives could include zero business rates for the first year. I also like the idea of zero national insurance for young people in their first year at work.”

John Wall Chairman, Proton Power Systems, Newcastle “I’d like to see a much more focused approach to existing businesses participating in the creation of new SMEs. Joining The Prince’s Trust Leadership Group is, of course, the first step in that process. Every £10,000 helps us create four new SMEs, and more than half the businesses we help to create are still trading after two years, which is impressive. That does, however, require a lot of mentoring which means a lot of business support as well as a little business money.”

Kevan Carrick Partner, JK Property Consultants, Newcastle “Three things... Implement remission of empty property rates to encourage development of new buildings. Reduce VAT on repairs and refurbishment to encourage property improvement, and especially to low carbon energy and energy saving. Also, encourage people to support charities by contributing their time and expertise to offset the impact of austerity on people who are disadvantaged. I say this as I also chair the management board of the Newcastle City Centre Chaplaincy activities.”

the public sector, whose own funding is being slashed. The Federation of Small Businesses fears that without practical funding

LEPs may become too preoccupied with struggling for access to, or influence over, meaningful amounts of money. The Government says it understands

bq-magazine.co.uk overview

regional economy

Once written off by ignorant outsiders as all pit heaps and lost shipyards and foundaries, the North East continues to diversify impressively the pressures and that it is considering its options. Meanwhile the North East withstands global economic buffeting better than many other parts of the country, and certainly better than many expected. Once written off by many ignorant outsiders as all pit heaps and lost shipyards and foundries, it continues on the contrary to diversify impressively through its private sector. There are stories to inspire, often among smaller firms. HomeFuels Direct of Stockton has grown continuously since 2008, when 26-year-old Christopher Bicknell got wind of redundancies in his logistics job and set it up in a spare room. Today it is a leading UK supplier of domestic oil. With four full-time staff, it achieves around £3m sales. And Geoff Thompson, who launched his Utilitywise energy and utility brokerage and efficiency advisory service in poky Jarrow premises six years ago, now has an AIM-listed operation employing 250 staff and turning over £14m-plus from elegant waterfront offices at neighbouring South Shields. In the region’s Fastest 50 league table the top three all show sales growth beyond 80%. IKM Testing (UK) first with 89.9% and Pearson Engineering and Controle Mesure Regulation (UK). IKM at Cramlington is a Norwegian group’s UK operation, serving offshore and subsea needs. Pearson Engineering at Newcastle

develops combat and defensive engineering systems and equipment for British and other armed forces. Controle Mesure at Wallsend makes wiring systems, harnesses, sensors and panel wiring for a variety of sectors. Other thriving firms are as far from heavy industry as imaginable: Culpitt at Ashington, for example, the UK’s leading supplier of cake and food decorations, J Barbour and Sons of South Shields, famed for fashionable outdoor wear, and Tombola of Sunderland, the UK’s leader in online bingo hosting. Foreign investors like the place and in 2011 generated more than 3,000 jobs, more than double the year before. Thai steelmaker SSI invested £1bn-plus to revive the iron and steel industry at Redcar and recreate 1,800 jobs this year, as well as re-invigorating local suppliers. This trend continues with long-term commitments by Hitachi and Nissan. Hitachi building trains at Newton Aycliffe will represent a £77m investment. Nissan, which three years ago laid workers off, now builds the force up to 6,225 to produce three new models and run production lines 24/7. Also in Sunderland Calsonic Kansei is

creating 145 more automotives jobs and investing £15.3m more to expand its product range. Competition for inward investment is strong, however, and particularly from Scotland which, with its Scottish Enterprise Agency, has enjoyed the highest foreign job creation in the UK. The North East has ruefully watched the Spanish wind turbine maker Gamesa spurn Hartlepool for Leith as a new site, while internet giant Amazon, switched its choice for a new 900 job operation from North Tyneside to Dunfermline on the promise of a £1m plus grant from Scottish Enterprise. And wouldn’t you? Financial incentives were greater in both cases. Scotland spent 76% more per head of population on economic affairs than North East England in 2010/11. North East England does, however, spend some 34% more on employment policies – or had done, and the North East’s world famous construction firm Cleveland Bridge has done well to win a share of work in helping to build the new £790m Forth Road Bridge in Scotland. The fact remains, though, that a Scottish First Minister exists and heads an industrial strategy to attract inward investment. Across the entire English North Country there is no single “ambassador”, as the IPPR terms it, to argue at Westminster for more powers. A political issue, this? Look at the ongoing North-South divide. It remains no less an economic issue too. n

Better balanced transport investment and the creation of an innovation council would unlock the North’s greater potential to the good of the nation

north east in the city The North East group of share listed companies looks different but healthy, and a recent AIM flotation from the region suggests renewed optimism. Meanwhile young blades of the City are looking our way forÂ sartorial style

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north east in the city

Keep it to yourself - is this a glimmer of light at the end of the tunnel? In our annual review of quoted companies based in the North East, Vinay Bedi uncovers signs that a corner is being turned in the economic fortunes of the region’s major companies Who’d have thought? Five years on from the start of the credit crunch and four years on from the collapse of Lehman’s, we finally have evidence to suggest that markets, if not economies, are turning a corner. It is with great relief that, for the first time in several years, we can report that our list of North East quoted companies is actually starting to look healthier. The make-up of the latest list has, of course, changed substantially. We were aware that several companies were either definitely or most likely to be dropping out of the list for the current year and we sadly waved goodbye to independence for the likes of Northumbrian Water and Wellstream, while others suffered from the impact of the global economic conditions. So it is with some sense of buoyancy that we have the pleasure of a new flotation in the region – namely Utilitywise. One flotation might not sound much but actually it represents the first in the region for many years, and must give us some hope that we are beginning to finally grow the list once again. The other positive that we must take out of 2012 is the favourable share price movement of many of the companies on the list. Of the 25 companies listed, 15 showed positive price movements over the year

and, indeed, the average price change to October 2012 was 11.9%. This compares very favourably with the increase in the FT All-Share Index of 5.7% and the FT 100 Index which only grew by 4.3%. So it was clearly a year for the smaller and mid-cap companies of which the list is predominantly made up. Of course, we do have a large FTSE-100 company representative in Sage, which also beat the main indices with an 11.7% increase in its share price. Sage continues to be the flag bearer for North Eastern companies and we continue to wish Sage well in its

increasingly competitive market. The best performance overall came from Barrett Developments which saw its share price increase by over 113%. A quite astonishing performance, but actually one that reflected investors’ sudden desire to reconnect with the housebuilders generally. Bellway also saw an excellent rise in its share price of over 42% and clearly investors were looking for continued improvements, both in the housing market and perhaps also the tremendous value that these companies were clearly offering earlier this year. On the same theme, although not

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north east in the city involved in residential construction but in managing residential properties, Grainger also saw a sharp 31% increase in its shares which represents a pleasing recovery for shareholders. A hint should be taken by those who continue to be sceptical. If investors are starting to be attracted by housebuilders, then a housing recovery is clearly expected. This would represent a very sound building block for future economic growth. The success of Zytronic’s touch-sensor products really came to the fore in 2012 with strong profits and earnings growth leading to a marvellous 60% increase in its share price. Zytronic has taken off this year and those long term investors that have remained patient have now reaped the rewards. A similar hope for recovery is reflected in the 47% increase in the Vertu Motors share price over the year. Vertu has sensibly kept its head down during the rough economic conditions and has cherry-picked new acquisitions across the UK. All of a sudden the group is reporting that its performance is looking ahead of expectations as those cleverly chosen acquisitions start to perform better and better. Vertu was the third best performing share in our list. Mention must of course be made of Utilitywise, floated in June 2012 and rewarding investors with a share price increase of over 40%. Being the first to float for several years added a small degree of pressure to Geoff Thompson’s brave decision to go public and he must be delighted with the way that it has succeeded and investors have benefited with strong gains. Other positive performances of note over the year include a 31½% rise for Petard’s Group which continues to be embroiled in a “will he, won’t he”

opinion

Price Changes, 31 October 2011 - 31 October 2012 NAME

% CHANGE

FTSE ALL-SHARE INDEX

5.7%

FTSE 100 INDEX

4.3%

FTSE 250 INDEX

13.9%

FTSE SMALLCAP INDEX

14.0%

COMPANY

Price Change

Market Cap Change

AMEC PLC

14.5%

6.0%

BARRATT DEVELOPMENTS PLC

113.5%

116.0%

BELLWAY PLC

42.4%

43.1%

CARR'S MILLING INDUSTRIES PL

23.1%

24.9%

E-THERAPEUTICS PLC

20.5%

21.4%

GLAXOSMITHKLINE PLC

-0.6%

-3.6%

GO-AHEAD GROUP PLC

-6.6%

GRAINGER PLC

31.0%

31.1%

GREGGS PLC

-8.7%

HARGREAVES SERVICES PLC

-35.6%

-34.7%

HELIUS ENERGY PLC

5.0%

IMMUNODIAGNOSTIC SYSTEMS HLD -69.2%

-69.2%

LSL PROPERTY SERVICES PLC

-4.3%

-4.3% NEW ENTRY

NORTHERN BEAR PLC

16.5%

NORTHERN INVESTORS COMPANY

26.3%

-0.1%

NORTHGATE PLC

-1.8%

OPSEC SECURITY GROUP PLC

-16.7%

11.1%

PETARDS GROUP PLC

31.5%

36.4% NEW ENTRY

SAGE GROUP PLC/THE

11.7%

3.0%

STADIUM GROUP PLC

-11.4%

-11.2%

TANFIELD GROUP PLC

-39.1%

-16.5%

UTILITYWISE PLC

40.8%

41.6

VERTU MOTORS PLC

47.3%

VIANET GROUP PLC

7.9%

7.0% FORMERLY BRULINES

ZYTRONIC PLC

60.1%

56.2%

TAKEN FROM FLOTATION 11.06.2012

Colour key: Blue is positive performance. Red is negative performance. Black is market capitalisation. The value of investments can fall and you may get back less than you invested. Past performance is not a guide to future performance.

takeover dispute, and also good performances of note came from Northern Bear, E-Therapeutics and Carr’s Milling. As usual, there were the disappointments. The stand-out shock

over the 12 months was the sharp demise in the share price of a once star performer, ImmunoDiagnostic Systems. It is fair to say that the company’s new automated diagnostic product continues to have excellent potential

bq-magazine.co.uk

north east in the city

opinion

and will remain a positive catalyst for the group. However, several management changes and delays in orders led to investors scrambling for the exit and the share price fell by just under 70%. Another star that waned during the year is Hargreaves Services. The discovery of unusual geological conditions at its Maltby Mine led to several months of uncertainty and concern for investors. The consequences of this fallout remain uncertain, and it was of little surprise that the share price fell by over 35% during the year. However, we must not let the small number of disappointments disguise the fact that the overall outlook for quoted

companies has improved considerably over the last 12 months and prospects look a lot brighter. Stock markets always anticipate. They can look ahead several years and if the stock market is telling us in 2012 that prospects are going to improve, then it would be wise to listen. We hoped last year for a more positive message in 2012. This has been delivered although we are by no means out of the woods in economic terms. But it is clear, and we are grateful, that some of our quoted companies are now beginning to enjoy the long haul back to recovery. n Vinay Bedi is a divisional director of Brewin Dolphin in Newcastle.

Important information The value of investments can fall and you may get back less than you invested. Past performance is not a guide to future performance. No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents. We, or a connected person, may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. In addition we reserve the right to act as principal or agent with regard to the sale or purchase of any security mentioned in this document. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk

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north east in the city

opinion

Taking AIM with confidence There have been so many meetings with private firms recently regarding the benefits of flotation. This has been driven by the need to access long term finance and the continuing scarcity of debt funding. Mark Fahy explains

Mark Fahy is head of UK small and mid-cap companies – equity primary markets - at the London Stock Exchange. AIM, London Stock Exchange’s growth market for SMEs, has seen an improving pipeline of good companies in 2012, particularly UK technology businesses. One of the most positive things they have reported is that investor roadshows were not unduly difficult, with oversubscribed fund-raisings and high quality investors on the shareholder register. The crisis in the Eurozone has clearly had an effect on the number of

flotations, but we firmly believe all of the foundations are strong. Within the UK, we have never had as many meetings with private companies as we’ve had this year regarding the benefits of flotation. This has been driven by the need to access long term finance and the continuing scarcity of debt funding. Utilitywise, an energy consultancy from South Shields, is the perfect example of a business that has accessed funding through the public markets and benefited as a result. The management team opted to float on AIM in June 2012, raising £7m and valuing the company at £37m, a figure which has since risen more than 30% to over £50m. This growth has, of course, benefited the company and its shareholders but also the local community through job and wealth creation. The public markets also continue to be used as a critical, ongoing source of capital: investors who are convinced by the company’s performance and prospects are often willing to support it by buying into further share issues in the months and years after it has been admitted. To date, companies on AIM have raised a total of £35bn in capital at admission and followed this with further fundraising amounting to £44bn. This demonstrates the vital role

AIM plays in supporting the growth strategies of firms throughout their life as public companies. There are a number of other benefits which complement the primary capital-raising function; improved public profile, the ability to attract new customers and increased credibility for winning contracts are just some of the positive side-effects companies have experienced following a London flotation. London Stock Exchange Group continues to lobby on behalf of SMEs to ensure the equity funding ladder works efficiently, and to make sure investors and companies can be brought together in the most effective way possible. We had an active dialogue with the Government on changes to the Enterprise Investment Scheme and Venture Capital Trusts, and their extensions will mark an important step in making investment in SME companies even more attractive. More recently we welcomed the Government’s announcement, as part of the Autumn Statement, that there will be a consultation on the inclusion of AIM shares in ISAs. Also we continue to work hard to ensure our markets remain an environment which balances the needs of growing companies with investor confidence. AIM has become the

bq-magazine.co.uk opinion

Energising the market: Geoff Thompson, chief executive of Utilitywise.

north east in the city AIM has become the world’s most successful growth market for SMEs as it is governed by a regulatory framework specifically tailored to the needs of the companies it serves

world’s most successful growth market for SMEs as it is governed by a regulatory framework specifically tailored to the needs of the companies it serves. Meanwhile, continued high levels of investment and liquidity show that investors have confidence in the marketplace. Deciding on an IPO is a very important decision and one which should be discussed at length, and considered carefully. Life as a public company is not suited to all businesses, but the strength of the UK public markets and its financial community means there is an exceptional infrastructure to help a firm decide, and implement its strategy if it decides it should be the next step. If you are an ambitious and growing company, AIM is an attractive route to a public quotation on one of the world’s most prestigious markets. n Mark Fahy is head of UK small and mid-cap companies – equity primary markets- at the London Stock Exchange.

bq-magazine.co.uk

north east in the city

overview

The City’s well suited When members of the City crowd are in need of new threads, it is often to a North East hamlet they head, as BQ Yearbook reports Bright young fortune gatherers of the City and Canary Wharf may well resort to Astons Champagne and Wine Bar for their flutes of Veuve Cliquot, the Counting House for their tankard loads of Franziskaner HefeWeizen - and may even buy their Lotus Exige S wheels off Piccadilly. But it is often to Newcastle upon Tyne rather than Savile Row they look when their bonus has burnt a hole in their pocket and they need to replace their suit. It has long been known that in a little hamlet 10 minutes drive from Newcastles airport, a skilled tailor will be found whose firm shake of the hand comes on an agreed price that is not greedy. That’s the reputation John Blades the bespoke tailor still enjoys in London as well as across our region, as he celebrates his 50th year in business. He too lived in the fast lane in earlier times. He is still so widely known as a former racing driver that on his 70th birthday party three years ago received a congratulatory e-mail from the great Sir Stirling Moss, once known as Mr Motor Racing. “My 70th birthday celebration was the best party I have ever attended, and I mean to ensure my 80th is even better,” quips John who continues to work from his Blagdon Estates’ showroom at Berwick Hill, near Ponteland. He has trimmed his business in recent years by focusing on tailoring

in the North East for the gentry and in London, almost entirely the City itself, where the average age of his clients is in the late 20s.

Keeping up appearances: John Blades, a speedster himself in his earlier years, brings some style to the City of London’s high flyers. “Well,” he says, “there are standards - aren’t there? - that need to be upheld and decent, quality, tailoring is one of them. A good cut, be it to a jacket or a suit, makes for confidence. It’s a reflection of success and I firmly believe in this. “You know, people trust in two things – their hairdressers and their tailors. For my part, I make sure this measure of trust is lived up to.” Though not mentioning specific gentry, he treasures an old shooting card that shows him as the only commoner

among a host of dukes and lords. “A memorable day,” he recalls. His “six days a week” approach to business even now has given John a client base as solid today as it was 30 years ago, when he traded from several regional showrooms. “These have gone,” he says. “I have sold my formal hire business to Suzanne Armstrong. But my brand, John Blades Bespoke Tailoring, continues to thrive. And once I leave the stage it will continue through my son’s Jules B business.” He once raced in Lotus cars himself, and in Ginettas, Chevrons and GT 40s. His application for membership of the British Racing Drivers’ Club is presently being considered in what John admits is his “last wish in life”. He’s getting much support in this from former racing drivers in a high-speed band of brotherhood. John has strong local links with the Croft circuit near Darlington, where he presents the Derek Bell Trophy for Formula 2 and 5000 cars at the Darlington & District Motor Club autumn meet each year. There is also an ever-present John Blades Trophy. “I once held the outright best ever time for the Croft circuit,” says John, smiling. “I had it for one week.” Fortunately for him, his day job has lasted significantly longer. n

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new economy Statistics emerging from the North Eastâ&#x20AC;&#x2122;s new economy make impressive reading. A rich heritage is being adapted to meet changing market demands, and the range of activities has diversified remarkably

bq-magazine.co.uk opinion

Now’s the time for action The North East during 2012 has been securing the raw materials it needs to build economic recovery. So 2013 should be the year when those materials are put to good use, says James Ramsbotham

new economy Tower of strength: The 200ft tall hammerhead crane on Walker Quay is an active landmark of new economy at work on the Tyne. The crane which in earlier years worked on the aircraft carriers Ark Royal and Illustrious, and on the battleship King George V, has been adapted to lift loads of 325 tonnes instead of the 250 tonnes before. This will enable it to support the growing offshore sector industry, and particularly such companies as Shepherd Offshore, Duco, Bridon and Wellstream that are already well ensconced.

The North East is no stranger to hard work. Our economic foundations were hewn from the coalface, forged in the steelworks and manufactured in the shipyards. We take great pride in our industrial heritage and so we should. We must never forget our history. But now, more than ever, it is vital that we look to the future and focus on those industries that will not only help us repair the damage caused by recession, but continue to build a sustainable economy based on innovation, knowledge and hard work. Ask most schoolchildren what the North East used to be famous for and they will present you with drawings of pit heads and details of the warships built in our region – whole projects based around our famous past. However, ask them what we do now and that’s a different story. This is not a criticism of teaching standards, but rather a call to the rest of us to start shouting about the great

bq-magazine.co.uk

new economy things we are doing in our region. We are not a problem for the rest of the UK to fix; we’re an unrealised asset bursting with potential. We boast world leading medical research, we are creating new forms of energy production, our creative firms are winning contracts from global giants and manufacturers are beating the mass producers of Asia through innovation and quality. This isn’t hyperbole. Our statistics are incredibly impressive: • Over 65,000 people work in the oil and gas sector and over 70% of the oil and gas platforms operating in the North Sea were built here. • The North East is home to the largest integrated chemicals plant in the UK at Wilton and more than 1,400 companies operate in the process industry sector exporting £12bn of goods a year. • One in every three cars made in the UK come out of Nissan in Sunderland making the North East the number one car producing region in the UK. • The North East is leading Europe on electric vehicle infrastructure and is acting as an advisor to projects in London, Northern Ireland, Scotland, Estonia, Singapore, South Africa and Hong Kong. • We have almost 60,000 people employed in the creative and cultural sector, with over 5,000 businesses, making up 12% of the region’s VAT registered firms. • The Centre for Process Industries (CPI) and the National New and Renewable Energy Centre (Narec) - both based in the North East - are key to the Government’s future growth strategy. • The Experian Insights Report highlights the North East as having

We boast world leading medical research, we are creating new forms of energy production, our creative firms are winning contracts from global giants and manufacturers are beating the mass producers of Asia through innovation and quality more companies with the characteristics for high growth than anywhere else in the UK. And these are just a small example. We’re also conducting world leading

opinion

research in our universities, creating vehicles that can mine a volcanic sea bed and creating flexible technology that will one day lead to roll-up televisions. We boast the best parts of the UK economy, with a thriving manufacturing and engineering sector, a service industry growing faster than at any time over the last four years and a sizeable head start on the rest of the UK with the inroads our region has already made in new and renewable energy, offshore wind and electric vehicle development. In the last year NECC has lobbied the Government vociferously to reduce red tape, ease planning legislation and improve the regional transport infrastructure – all key aims set out in our manifesto in January to equip our businesses with the tools to do more for the UK and in turn stimulate our own economic fortunes. Hopefully the Government has begun to listen. Vince Cable has pledged to reduce bureaucracy and address employment legislation, and the Deputy Prime Minister announced plans to reduce planning regulation to stimulate the construction industry. The Government has approved schemes to relieve traffic congestion on the Western Bypass and the Silverlink, but we must build on this lobbying success with continued pressure to reduce Air Passenger Duty at regional airports, improve links to our ports and upgrade sections of the East Coast Mainline. The raw materials to build economic recovery have been secured in 2012. Let’s make 2013 the year we put them to good use. n James Ramsbotham is chief executive of the North East Chamber of Commerce.

bq-magazine.co.uk opinion

new economy

Relief at last: For drivers, the most welcome news of relief since Mafeking may be the relief of the Western Bypass at Gateshead, where diversionary routes approved in the Chancellorâ&#x20AC;&#x2122;s Autumn Statement will help the flow of freight to circumvent the Tyneside conurbation. The stretch is presently the third most congested passage in Britain, bearing three times the amount of traffic during rush hours than it was built for.

bq-magazine.co.uk

new economy

opinion

Speed is of the essence Initially noted for its contribution to regional manufacturing, the Centre for Process Innovation is now firmly established as a national, indeed, international centre of excellence based in the North East – and profitably so. Chief executive Nigel Perry tells how the success has been achieved The UK process and manufacturing industries face substantial obstacles as they look to advance the evolution of innovative new products, technologies and services. With a rich heritage in these industries, the North East in particular has been charged with adapting to changing market demands to ensure its continued economic growth. In response to such demands, the Centre for Process Innovation (CPI) was created, and since our inception in 2004 we have worked to provide commercially viable solutions to meet this concern. While initially recognised for our contribution to the regional manufacturing landscape, we are now firmly established as a national and indeed international centre of excellence based in the North East. Home to the UK’s National Centres for Printable Electronics, Industrial Biotechnology and Anaerobic Digestion, we apply our knowledge in science and engineering and combine it with state of the art development facilities to enable our clients to develop, prove, prototype and scale up the next generation of products and processes. Put simply, we help companies – big or small – to speed the deployment of innovative and sustainable solutions to address market opportunities. During the last decade

If this challenge is met, the UK has a platform from which to rebuild and enhance its manufacturing supply chain and truly bolster its economy we have worked with more than 2,000 companies - including SMEs, universities and large corporate clients globally - and successfully completed more than 100 public and private projects of total value exceeding £235m. Using our diverse assets valued at over £60m, and the expertise of our renowned team of scientists and engineers, we have also helped to establish more than 50 European

projects to the value of €118m. These projects are in turn helping companies in UK manufacturing supply chain - many of which are based in the region - to bring to market new technologies, products and services in order to grow and enhance commercial competition globally. Originally 100% public funded, CPI has grown to a £15m business with 60% of its income coming from collaborative R&D and commercial contracts, and it now employs more than 200 highly skilled scientists and engineers. Project highlights include developing and formulating state-of-the-art electronic inks for one of its clients, which permit large screen HD OLED displays at one-tenth the size of conventional silicon systems. CPI has also developed a new continuous manufacturing process that has cut capital cost by 50% and operating costs by 60%, resulting in the client investing in a new plant. Another recent and crucial development shaping and driving the UK manufacturing industry is the Government’s elite network of Catapult centres, which bring together individual centres of collaborative research to create something even greater than the sum of its parts – a single network covering high-value sectors from pharmaceuticals to power generation,

bq-magazine.co.uk opinion

where knowledge gained in one area can be transferred to others. We were selected as the Government’s process partner and our challenge is to introduce our low cost, low carbon manufacturing approach to high

new economy

growth markets that could benefit from our expertise and the new technologies and processes we have at CPI. If this challenge is met then the UK has a platform from which to rebuild and enhance its manufacturing supply chain

and truly bolster its economy. As a developer of key technologies in the UK, we continue to meet our targets and expand the horizons of innovation, and from our sites at Wilton and NETPark, are currently delivering a number of forwardthinking and economically vital projects to steer the UK’s process industries, printable electronics technologies and low carbon transition with partners from the public and private sector. Moreover, we remain excited about the scope for even stronger collaborations as we continue to provide a valuable service that helps drive the UK’s progression into a key part of the global manufacturing sector. n

company profile

Big ambitions for software in 2013 The North East’s software sector has continued to grow throughout 2012 thanks to Sunderland Software City The initiative tasked with driving and supporting the growth of the regions flourishing software industry has now helped over 300 businesses, supporting the creation of almost 200 jobs and helping 100 innovative companies to start-up. Sunderland Software City provides companies with the support they need to succeed, including business and technical mentoring, securing finance, market research and introductions to investors and customers. One company demonstrating the success of North East software is The Test Factory which develops bespoke online employee tests for businesses including HSBC, the BBC and Microsoft. The company has expanded rapidly since it was established in 2007, quadrupling its workforce and

Sunderland Software Centre. opening up multiple offices. Managing Director Kevin Beales said: “Software is an industry where it is possible for companies to expand rapidly with the right product, the right staff and the right support. We set up in Sunderland because of Sunderland Software City. “They’ve not only given us their expertise but also the introductions to the right people, sources of funding

and networks which has helped us become the company we are today.” David Dunn, Chief Executive Officer of Sunderland Software City said: “Our mission is to make the North East synonymous with software innovation. We have made tremendous progress since our inception in 2008 and are looking forward to taking the project to the next level in 2013.” Sunderland Software City is part funded by The European Regional Development Fund Competitiveness Programme 2007-13. n

Visit www.sunderlandsoftwarecity.com for more information.

bq-magazine.co.uk

new economy

overview

A broader progress The North East’s broader new economy which is succeeding the mining, steelmaking and shipbuilding era, is steadily gaining momentum. Brian Nicholls charts some recent progress Clear progress is evident in the region’s new economy superseding the previous heavy industrial prominence. The new fleet’s flagship is probably Sage, whose software genius now lights up business across much of the world. It delivered another year of solid performance in 2012, raising its fullyear earnings and profits despite the trading pressures on its customers. Sage was the cry from North East rooftops that the region of its birth could excel in service industries as well as manufacturing. Often now too, and rightly so, the spotlight falls on the shiny and highly successful automotives, offshore sectors and process chemicals. But many other activities now contribute to the region’s new composition. The region entered the new millennium ambitious for digital media, life sciences and nanotechnology, and for excelling in shared services in business. Two out of five centres of excellence set up in the initiative have recently undergone change. But 2012 has been better, over all, than might have previously been expected. Renewables and recycles: The North East is significant to the nation’s intensified development of renewable and recycled energies. Europe’s biggest bio-refinery, the £300m Ensus bio-

ethanol plant at Wilton, Redcar, got back into production during 2012, turning out biofuel from homegrown wheat and oilseed rape. Started in 2009, it then closed for 15 months amid competition from cheaper, subsidised US imports. However, the market distortion was later removed by EU endeavour.

Sectors sustained Businesses throughout the UK made a £17.6bn investment In research and development last year – 8% up over 2010. No great advance perhaps, considering the commitment lagging for some years past. But it is a plus during difficult times. Computer programming and information services benefited most, with a 19% jump to £293m, while investment in automotives rose by 23% and the pharmaceutical sector’s 4% increase amounted to £169m. Defence also got high investment through a 10% increase driven mainly by Government contracts to develop aircraft and sea vessels. These are all sectors in which North East firms are active, and hopefully many will feel the benefit and develop new products in the region’s new economy.

Green energy services firm Sembcorp UK is partnering recycling and resource management company Sita to create a £200m power station that will convert household and office waste into electricity by 2015. Also on Teesside, CHP’s woodchip classification process at Wilton is producing renewable heat and energy without the troublesome liquid effluent accompanying. They are instead recycled. Backing for this comes from the Investment Finance for Business North East Proof of Concept Fund. A biomass power station planned between Blyth and Lynemouth, where anything up to 515 jobs are being lost through Alcan’s closure, would power 170,000 homes and create 50 longterm jobs but opposition from residents nearby is forcing an inquiry. Northumbrian Water, creator and longtime owner of England’s biggest hydroplant at Kielder Water, has now installed a £1.3m hydropower generator at Mosswood treatment works, near Consett, capable of powering 300 homes. Hong Kong owned now, the group is likely to research and develop aqua-fuel projects increasingly. It also generates electricity at Selset and Derwent reservoirs, and at treatment works in the Wear Valley and Darlington. It is leading the way in creating power from sludge left after

bq-magazine.co.uk overview

new economy

Coming up: Phase one of work on a Science Central District in the heart of Newcastle will begin in 2013. sewage treatment at massive anaerobic digesting plants on the Tees and the Tyne. Despite subsidy cuts for property owners who install solar PV to save simultaneously on their own energy bills while securing income also from feeding the national grid, the take-up continues to rise. And despite ongoing objections to nuclear power in some quarters, Hartlepool looks likely to get a new nuclear power station – sooner rather than later would cheer the region’s struggling construction industry. On Teesside, green gas is causing excitement. Air Products’ new syngas unit at Seals Sands, Billingham, is

showing potential to mass produce. It will require an infrastructure and supply chain, but it’s a key raw material for the future and a reducer of carbon footprint. Dr Stan Higgins, chief executive of North East Process Industries Cluster, says: “Air Products is showing Teesside can make significant amounts of syngas from bioresources. This follows an MGT Power announcement again signifying our capability for such projects.”

These advances - along with the opening of a Mitsubishi battery chemical plant, the Sita up-scaling project, the reopening of the SSI blast furnace, Epax Pharma Plant in commissioning, Lotte Chemicals reopening and expanding, and Cleveland Potash investing - indicate the extent of progress on Teesside. Digital and IT: Public investment cutbacks hurt the digital sector, which

There is clearly no shortage of ideas on how to take the regional economy further forward

bq-magazine.co.uk

new economy has lost its Codeworks excellence centre. Herb King, the New Yorker who built it over a decade and also introduced the internationally recognised Thinking Digital Conference held yearly in Gateshead, has diversified his initiatives. Connect, the networking arm of Codeworks, and The Hub, Gateshead’s digital creatives networks together, have married and are now Digital Union. It is speeding a new apprenticeship pilot and a graduates portal to support skill-seeking North East firms. Digital Union is bidding for Government cash initially and will then go after membership fees, sponsorships,

advertising revenue and other fees. It will also drive new opportunities. Herb Kim chairs the organisation and is also working with Newcastle University Business School to integrate IT advantages with general business practices. They are mounting next September a major Internal Innovation event, preceded by high level seminars in the coming months. In the region’s drive for high ground, Sunderland is getting a Software Centre, Teesside has a Digital City. They too have had funding cuts. However, a four year campaign by TIGA, the UK’s game trade association, has persuaded the Government to permit tax breaks

Something old, something new The region’s new economy does not rely wholly on new activities. A wine industry for example can be traced back 7,000 years. Much more recently entrepreneur Tony Cleary has seen his Lanchester Wine Group mature like a good claret to a point where, after three decades, he foresees revenues growing by more than 60% to £50m shortly. The firm, flourishing in a region once behoven to breweries with reputations in alcoholic achievement, has one of the UK’s biggest bottling plants supplying outlets nationwide. The Annfield Plain business is the UK’s fourth biggest wine bottler, a family firm with Cleary’s wife Veronica working alongside, as she has done from the start. And believe it or not, a coal revival in the region looks possible. While the North East’s coal tradition on the surface, so to speak, is perpetuated by opencast working, deep penetration could return. A “clean coal” lobby, backed by North East MPs, contends the record could play a key role in introducing environmentally friendly extraction devoid of the level of human tragedies seen in the past, yet creating thousands of new jobs. Five Quarter, a Newcastle University spinout led by Professor Paul Younger, has licences from the Coal Authority to exploit 2bn tonnes off the Northumberland coast. It is believed new techniques could yield an equivalent of 11bn barrels of oil from there. Another expert, Dr Eric Wade, suggests three major collieries closed latterly – Westoe, Wearmouth (on which stands Sunderland AFC’s Stadium of Light) and Easington – could still have been viable today using expertise such as gasifying the coal while it is still underground. There is no lack of ideas about progressing the economy further.

overview

for games production. This is re-attracting global investment, and reversing a trend that cut staff levels by 10% between 2008 and 2011. A number of firms, Ubisoft Reflections in Newcastle for example (a specialist in driver games, active since 1984), and Eutechnyx the Gateshead firm which over 25 years has become probably the world’s leading independent racing game developer (Big Mutha Truckers, Pimp My Ride) are expanding impressively. Sadly, the Newcastle based visual effects company Mere Mortals, though a contributor to box office cinema hits like Slumdog Millionaire, Sunshine, 28 Weeks Later and One Night in Turin, closed after its own 13 year run. Dr Richard Wilson, chief executive of TIGA the UK games industry’s trade association, advises that because of skills lost earlier, entrants to the industry now will have to be brought on faster, and company loyalty encouraged. Middlesbrough has been pinpointed as one of five main UK areas with potential to develop high growth companies, particularly digital. Its Digital City, born out of Teesside University, has been running for 12 years and continues to thrive under Mark Elliott’s leadership. Half of its Boho One building is taken by Double Eleven, set up by Lee Hutchinson and colleagues who, like him, had worked on the top selling Grand Theft Auto. Their egalitarian firm took off in a big way in 2011 with a lucrative contract to develop jointly Little Big Planet PS Vita, Sony’s puzzle platform video game. Medicine and health: The biomedical sector, with more than 1,000 firms generating £10.5bn a year - and employing 38,000 people – has also

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Quantum Pharmaceuticalâ&#x20AC;&#x2122;s Andrew Scaife.

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new economy

Industry influencer: Herb Kim, chair of a newly created digital sector organisation. metamorphosed. Deprived of funding that previously came from the now disbanded One North East, the life sciences sector agency CELS has merged with Bionow of Manchester and now covers right across the North. CELS had been formed in 1999, a year before Bionow, and the North East sector, which had been recognised as having one of the UK’s top three biotech clusters, had been growing over a decade when UK growth as a whole had been negative. The region is still vibrant and attracting relocations. QuantuMDx group has relocated from London to Newcastle bringing DNA diagnostic technology which, through a handheld device, speeds the defining of complex diseases to within 20 minutes, and

gauges drugs to prescribe. Chief operating officer Dr Sam Whitehouse found many suitable PhD students to recruit from within the region. Indeed, the universities have been good seedbeds throughout. Scientists at Durham University, for example, recently helped identify a gene to improve fertility treatment, and Newcastle University has spun out drug discoverer and developer E-therapeutics, which raised a net £16.7m from an equity placing in 2011. Among pharmaceutical firms, Quantum Pharmaceutical of Burnopfield, rated the UK’s 14th fastest growing company, has in eight years established six centres and a leading position as a “one stop” deliverer of specials to private customers, clinics and hospitals.

The North East has shown to be vibrant enough to continue attracting biomedical relocations

overview

The sight of contractors recently starting work on one of the country’s most ambitious regeneration projects is uplifting for Newcastle’s long-term ambitions to underline its role as a Science City. Phase one of building - a Science Central district in the heart of the city - will begin early in 2013. The Science City initiative, led by Newcastle University and the city council, builds on the city’s existing scientific expertise in areas such as stem cell and regenerative medicine at the International Centre for Life, and in ageing and healthcare at Newcastle University’s Campus for Ageing and Vitality. Its city centre district will have offices, shops and homes, and will also house some of Newcastle University’s sustainability research, and support science and technology start-ups. Electric vehicles: In the development of zero emission electric vehicles the North East is a pacesetter. In March 2013 the Nissan Leaf enters production. Already so many charging points are installed in the region that even now drivers are never more than 5km away from a charging point for 90% of driving time, and no more than 15km for 99% of the time anywhere in the region. Nissan is also introducing battery manufacture at Sunderland, and companies like Smith Electric Vehicles and Sevcon in Gateshead are already old hands in EV manufacture, the former founded in 1920 to become the world’s biggest manufacturer of commercial EVs. Among firms already using EVs extensively are an Ashington drinks firm, Polar Krush. Per head of population, North East England already has more EVs than any other part of the UK. n

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new economy company profile

Bright sparks using the power of poo! Award-winning national leaders

Advanced anaerobic digestion plants at Bran Sands, Teesport (above) and Howdon, North Tyneside (right). Northumbrian Water is the awardwinning national industry leader for generating green power from what comes naturally from all of us. It’s the first waste water company in the UK to use all the sludge remaining after sewage treatment to produce renewable electricity. Pioneering environmental plants have been built at Tees Port on the river’s south bank and at Howdon at the mouth of the Tyne. The £70m dual investment will annually save Northumbrian Water multi-millions of pounds in gas electricity operating costs and significantly cut its carbon footprint by 20%. The science uses a natural biological process. A new advanced anaerobic digestion (AAD) process called thermal hydrolysis has been developed, which involves pre-treating the sludge remaining after sewage treatment, heating it to 165 degrees Celsius under six bars of pressure – a bit like putting it in a pressure cooker. This destroys any pathogens and breaks down the cell structure, which makes it better to be fed to billions of bacteria in

giant digester tanks – and easier for them to eat. The two plants reduce two million cubic metres of sludge, resulting from the treatment of domestic sewage and biodegradable industrial effluent from a population equivalent of about four million, to about 150,000 cubic meters. The resulting methane released by the bacteria is collected in 11-metre diameter biogas storage bags before being burned in a gas engine to produce nearly 10 megawatts of electricity. Some of this is used in the process, making it self-sufficient, but there is enough excess to meet most of the whole sites total energy requirements. Waste heat and steam generated from the process are also captured and recycled for use elsewhere in the process. It also means less energy used for transportation of sludge leading to significant carbon savings. And what remains of the sludge afterwards is an excellent Class A biosolid fertiliser for farmers. Northumbrian Water now has two sites which will cut the company’s

annual £40m electricity bill by nearly 20% and brings the company significantly closer to having a fifth of its energy produced from selfgenerated renewable sources by 2015. Innovation is still at the forefront of this leading green initiative. Northumbrian Water is currently looking at further re-use of any remaining waste heat from the AAD process elsewhere on the treatment works sites. Further cleaning of the biogas is being investigated so that it can be injected directly into the national gas grid, alternative fuels to supplement the sludge feed for the process, including food waste, are under examination and continuous optimisation of the process to maximise operational performance is targeted. n

Northumbrian Water, Boldon House, Wheatlands Way, Pity Me, Durham, DH1 5FA. www.nwl.co.uk

manufacturing & offshore Niche expertise and a return to making consumer goods again are pointers to further success for our regionâ&#x20AC;&#x2122;s industries. But anxieties exist that the Government can help allay while it continues to keep the sun rising over the sea

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manufacturing & offshore

Something special brings results Specialisation and a return to some of our economic traditions are putting the North East at the white hot edge of industry, says Ian Dormer

In out, in out, and shake it all about. Recessions or Christmas party fun, it can apply to both. The business world experienced a roller coaster ride in 2012 but underneath the gloom and doom touted by so many there are many businesses that are quietly thriving. Specialisation is a growing trend in our region, with existing businesses choosing to focus on their unique skills, and new companies launching all the time to make the North East the home for niche expertise. From firms breaking new boundaries in satellite technology to others leading the world in underwater exploration vehicles, we are turning out products at the white hot edge of high skilled industry. There are also encouraging signs of a return to some of our economic traditions. Despite the national hobby of being negative about

large-scale manufacturing, North East car building is an encouraging success story. You wouldn’t know it from the headlines, but the region now makes more cars than the entirety of Italy. We should be extremely proud of that figure. We all know our industrial heritage, but we have got to stop thinking of it as something that lives only in the past. True, the mines and the shipyards are gone, but there are so many new products that we are turning out – and so many more that we could and should be producing. The figures from the car manufacturing sector are encouraging, but they are a foundation to build on, not a sign that we can sit back. If there was a magic formula for economic growth then every government would implement it, and the person who discovered it would retire to a private island to enjoy their vast fortune. There isn’t, and the real route to good times is the same as ever – hard work, innovative thinking, good infrastructure and an emphasis on skills. None of those ideas are new. Rather they are priorities that we must watch constantly, making sure that

every new planning decision, every new economic policy and every change in tax or spend goes to support them rather than get in their way. I regularly meet with business leaders in the region, and across the country, as part of my work with the IoD. Each of those meetings leaves me hugely encouraged. We are fortunate to have the world’s most experienced, most driven and most imaginative business community. Despite the really difficult times everyone has faced in recent years, I am convinced we have great times still ahead of us for the North East and the UK as a whole. What is required of us is that we must grab every chance with both hands, come up with answers to every new question and produce solutions to every problem that might present itself. The year 2012 may live in the history books as a tough one, economically – but below the surface there are signs of the good years to come. n Ian Dormer is national chairman of the Institute of Directors and managing director of Rosh Engineering at Birtley.

The real route to good times is the same as ever – hard work, innovative thinking, good infrastructure and an emphasis on skills

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manufacturing & offshore

opinion

Painting the sunrise Levels of state investment announced for future oil and gas production confirm its status as a sunrise industry sure to remain prominent in the UK economy, says George Rafferty The constant, sometimes vociferous debate ahead of the publishing of the Government’s Energy Bill reaffirmed how essential achieving a secure and balanced energy future is to the UK. The Bill sets out a roadmap enabling offshore renewables and new nuclear to truly take their place alongside the established and vital oil & gas sector, which will retain a key role in our future energy needs. Recently, the Government, through the taxation structure, has shown the continued importance of the oil and gas industry to the economy and the country’s future energy requirements. The introduction of the Brown Field Allowance to help increase lifespans of older North Sea fields is a major endorsement by the Government in the industry and acknowledges the sector’s significant contribution to the economy. It is a common misconception that oil and gas is a ‘sunset industry’ - partly because hydrocarbon resources are exhaustive. Not so, however. Oil and gas remains a sunrise industry and there are reserves in deep, difficult areas that can be exploited. Marginal field developments mean increased oil and gas recovery and new unexpected large discoveries never cease to amaze. New technologies provide access to remote reservoirs and reap rewards of extended field life. Indeed, this region’s

subsea industry will be a driving force in the discovery and recovery process of these resources. Established areas of the world, such as the North Sea, also still have plenty to offer. It is estimated the UK Continental Shelf holds as much oil as has already been extracted. While oil and gas will remain central to delivering the country a balanced energy future, activity is expected to increase in the emerging sectors. The planned £7.6bn government investment in Offshore Renewables infrastructure will inject much needed confidence in the sector. It will provide opportunities for supply chain companies that have diversified and tailored their skills, products and services to meet the challenges of constructing and maintaining offshore wind farms. Already the subsea sector, which has a tremendous

hub of companies operating out of the North East, is reaping benefits of diversification. Having served an infant offshore wind industry, it is now integral to future projects. Other businesses are following the lead of subsea firms to enhance their offerings and be able to serve multiple energy sectors, which will bear fruit in years to come. Oil and gas will continue to provide massive opportunities for many of these businesses for decades yet, but renewable energy can provide lucrative opportunities. NOF Energy will continue to work closely with its members to help them benefit from opportunities being created by the energy industry and Government policy across all resources. Our activities are driven by our proactive and industry-focused board, made up of 14 champions from the oil and gas, nuclear and offshore renewables sectors. These innovative and knowledgeable individuals include Graham Payne of Darchem Engineering (chairman of NOF Energy), Dennis Clark of OGN Group (honorary president), Dave Armstrong of Armstrong Consultancy Services, Neil Kirkbride of Bel Valves and Paul Charlton of PDL Solutions to name but a few. They have played a key role in developing NOF Energy’s five year strategy, which has enabled the organisation to be completely

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manufacturing & offshore

Touching base: Lord Andrew Adonis, who is heading a long-term study of the North East economy, has touched base with its offshore industry. He is seen here (front left) with Paul Woolston, chairman of North East LEP. Behind them are (l to r) Steven Harrison, Port of Tyne; Stephen Learney, Haskel Europe Ltd; Alex Lamb, British Engines; Neil Kirkbride, British Engines; George Rafferty NOF Energy; Jon Dale, IHC Engineering Business.

self-funded and business-focused. The board supports the executive team at NOF Energy (myself, Joanne Leng and Clare Weirs), which also works closely with two sub-groups, Subsea North East and North East England’s renewables group, Energi Coast. These groups are focused on highlighting the region’s capabilities and the quality of the companies operating in their sectors. All NOF’s activities centre on giving members relevant and effective business development services to help them exploit opportunities across the global industry. n George Rafferty is chief executive of NOF Energy.

Ford are an award winning, highly successful specialist in the precision machining and pressing of components for the aerospace, defence and commercial industries. 3, 4 and 5 axis machining Grinding & lapping CNC turning High/low volume presswork Thread rolling & cutting Laminated Shimstock

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manufacturing & offshore

opinion

Bridges still to cross Firms anxious about supply chain capacity, unable to find skills they need, or under strain from rising costs, must see Government action to improve the competitiveness of the UK’s business environment, says Andy Tüscher As we enter a new year, there is a mixed picture across the region and the UK as a whole. Overall our economy is still no larger than it was last year and business confidence remains fragile. We have also seen only halting progress towards more balanced growth where net trade and investment makes a greater contribution. Ultimately business, particularly manufacturing, will drive this better balanced growth. But plans are being held up by uncertainty, in some cases a lack of finance or the pull of more attractive locations outside the UK. Uncertainty has increased towards the end of the year and our latest survey shows a distinct turn for the worse. EEF has thus halved its growth forecasts for 2013 – positive, at least, compared with the no growth we have seen this year. However, this hides a mixed picture of a divergence in sector performance which we have seen for the last 18 months. Talk to anyone in the oil and gas, aerospace and in the main automotive sectors and they are enjoying healthy growth, especially if they are connected towards demand in developing markets or at the higher end of the market. Demand for capital goods in developing markets is also helping sectors such as mechanical engineering. But for others the picture is more difficult, especially given there is little if any sign of

improvement in the Eurozone situation. What North East manufacturers want to see is a clear growth strategy. Companies worried about supply chain capacity, unable to find the skills they need, or under strain from rising costs, need to see demonstrable action from all parts of Government to improve the competitiveness of the UK’s business environment. The starting point must be an overarching industrial strategy that sets out a limited number of ambitions for where the UK economy must go over the next five years. These ambitions must focus on raising our innovative performance, striving to promote our companies globally, dismantling the obstacles to investment and growth, and acting to attract and retain the best talent. All parts of Government need to work much closer together to achieve

these ambitions. They should also ensure that policies which undermine growth and competitiveness do not go forward. The Government should submit itself to a regular review of whether it is making sufficient progress on its growth ambitions in the same way as it does on its debt and deficit targets. Temporary interventions, such as Funding for Lending, should provide a limited fix for companies seeking new finance on the right terms. However, the Government also needs to deal with structural problems in the banking sector by increasing competition in that market. There are no quick fixes. But it should start by looking at what more it can do to make the UK open to new entrants and encourage more switching between banks. In terms of the development of our future workforce, a recent review by Doug Richard has set out bold ambitions in this area, and we need to see Government implement his recommendations as soon as possible. Looking forward we have much to be positive about in the North East and by working together with all the key stakeholders in our region we can make sustained progress towards balanced growth. I look forward to playing my part in this objective in 2013. n Andy Tüscher is regional director, North EEF Ltd.

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manufacturing & offshore

More things to make What’s this – Britain to build washing machines again? Why not, argues Pamela Petty. And while we’re at it what about a drive in electronics? And all things offshore? Brian Nicholls looks at the possibilities For sheer panache, Pamela Petty deserves an accolade. Having just overseen the launch of air-sourced heat pumps, a new line from Ebac where she’s managing director and finance director, she and members of her family have looked around to consider what else the Newton Aycliffe firm could turn to in this promising new dawn for manufacturing. The answer, it turns out, is to bring washing machine building back home and – perhaps later, fridge and freezer making. Pamela’s done the detail, including a study of the existing makes’ design deficits. She’s convinced there’s a market for British made white-goods appliances. “It’s long been there,” she told BQ. “Washing machine sales have hardly changed over 10 years. Some 3m will be sold in the UK this year, every one foreign made.” Italians make them mostly - “fantastic” products, she admits. “But they’re not a low cost base manufacturer,” she points out. “It costs £15 to ship a machine here – more than my projected labour cost. So it’s not that they can’t be made here. I’m confident.” Ebac has been to Italy and seen how highly automated the work is now, how much lower the labour cost than when washing machine manufacturing was priced out of Britain earlier.

The need: The Government must create certainty, says Dr Neil Bentley, CBI’s deputy director.

Ultimately, the importance of electronics to the industrial economy is comparable to that of the automotive, pharmaceutical and aerospace sectors and may be even greater Pamela believes Britain must be more self-sufficient to recover financially. “Making washing machines might have employed 1,000 people once. “Maybe now, with automation and innovation, it will employ 500. That’s still 500 cost effective jobs here,” she points out.

The firm her father John Elliott started in 1972 is a big brand name in water coolers and dehumidifiers. It employs 200 people, a figure Pamela obviously hopes to build on. State encouragement has come through a Regional Growth Fund award. There is a conviction elsewhere that

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manufacturing & offshore opportunities exist for manufacturing recovery in electronics. Two researchers, Stephen Clarke and Georgia Plank, feel the Government is ignoring the potential size and significance of electronics manufacturing. They argue in a report from the Institute for the Study of Civil Society, a politically unaffiliated policy think tank led by Dr David Green, a former Newcastle city councillor: “Ultimately, the importance of electronics to the industrial economy is comparable to that of the automotive, pharmaceutical and aerospace sectors and may be even greater. “Yet electronics have not figured widely in the Government’s plans for economic recovery. This could be partly because consumer electronics, along with well-

known brands, tend to be dominated by companies in the Far East. Britain, however, is a dominant force in more specialised higher-value electronics goods, especially for medical devices, power electronics and communication systems.” And these markets, they point out, are set to grow. Regional Growth funding is already going into energy infrastructure, not surprisingly since up to £330bn of investment will be needed to guarantee that Britain secures energy supply, meets carbon emissions reduction targets and protects the UK economy by 2030. That’s the price projected by London School of Economics and Political Science for something North East firms should surely have a big share in.

The revivalists: The Ebac executive team planning to revive white goods manufacturing in the UK.

Regional Growth funding has been going into energy infrastructure also, not surprisingly since up to £330bn of investment will be needed to guarantee that Britain secures energy supply

overview

The school’s report foresees three scenarios by 2030: Hitting the Target would need massive political cohesion and direction, supporting the record levels of investment stated above, and driving down carbon emissions. The goal is achievable with a recovering Eurozone and UK economy; more trade integration, specialisation; a focus on green growth and productivity gains; and recovered financial institutions. The EU remains a market leader on low-carbon technology. Gas is key: But short-term price gains by switching to gas power would be followed by environmental problems from missed carbon targets. The presence of gas-fired capacity slows needed structural change, and necessitates costly action when carbon constraints bite. This scenario depends less on events in the Eurozone and elsewhere abroad. But there would be less committed political action in Europe on carbon emissions reduction, fewer productivity gains as well as more fractured trade patterns. The Eurozone would eventually recover, but momentum is with Asia, which is catching up with Europe in productivity and growth. Austerity reigns: A dismal prospect. Confidence and investment would be low, but less would be needed due to ongoing Eurosclerosis and ongoing stagnation in the UK. The grid ages and upgrades are not driven by a need to accommodate renewable energy. Some technologies like carbon capture and storage (CCS) – in which the North East and the shale gas sector stand to gain - would fail technologically or otherwise not be delivered. Meanwhile Brazil, Russia, India and China would forge ahead.

bq-magazine.co.uk overview

manufacturing & offshore

Financing their future: Neville Baldry, Clive Owen & Co’s Regional Growth Fund specialist, with SSI production operators Josh Holmes and Matthew Brodrick, two of the younger workers to benefit from funding the steel firm secured.

Getting at the cash A firm of business advisors notable in helping North East bidders to access millions of pounds and create hundreds of jobs is Clive Owen & Co. Beating paths to the Regional Growth Fund, it has helped ensure the resurgence of steelmaking on Teesside, for example. The firm, operating from Darlington, Durham and York, worked on four of Teesside’s five successful Round 1 applications, including that for Thai-owned SSI (Sahaviriya Steel Industries). When Business Secretary Vince Cable visited SSI in May he announced a £1.4m award to fund training for more than 1,000 staff at its slab steel production plant in Redcar. This help enabled SSI to upskill faster. Among employees to benefit were production operators Josh Holmes, 22, from Skelton, and Matthew Brodrick, 25, of Coulby Newham.

The eventual outcome will affect every business and home in the UK. Many may agree with the emphasis Dr Neil Bentley, CBI’s deputy director, has also laid on the need for a firm Government lead in creating the certainty that will help investors boost growth and provide secure, lowcarbon power. Besides solving the nation’s energy crisis, it could benefit

confidence in all energy technologies and help the entire economy. Like many, he urges a mixed portfolio of generation. That means getting to like wind energy, provided turbines are placed sympathetically within the environment. “We are seeing UK energy policy get increasingly political. Are you for green or for growth? Are you for renewables or for gas? Fruitless

debates over these false choices can seem like they’re just noises off, but they really matter,” he declares. It’s ironic for our region, where plans for a £400m hub of research and development into offshore wind power are moving closer with the siting of a major structure three miles off Blyth’s shoreline. There the renewable energy centre Narec has installed an offshore research and anemometry platform to carry latest technologies for measuring wind resource, observing marine conditions and collecting marine life data. It stands close to the nearest shore array of the proposed Blyth Offshore Wind Demonstration Site of 100MW capacity. Positioned 103m above sea level, the new platform’s meteorological mast would be among the tallest planned for offshore wind in the UK. A decision on Narec’s application to run the proposed demonstration site is expected during 2013. Competitive tendering is underway to demonstrate turbines of up to 195m blade-tip height on the three proposed arrays. Private sector investment in the site of around £400m would see the first turbines operating in 2014. Andrew Miller, Narec’s chief executive, describes the installation as “a significant step in realising the demonstration project, designed to allow commercialisation of the next generation of offshore wind turbines and their associated structures and electrical network equipment.” The platform, designed for a 22year life, has had a 53m-high tripod foundation (of 535 tonnes), a 60-tonne platform and a 25-tonne weather mast built on the Tyne and assembled offshore. Such developments demonstrate further North East ability to shine in the new energy approach. n

The Sunderland Story Sunderland has always created new products and ideas. Proud of its hard-working industrial heritage, rooted in coal mining and shipbuilding, the city today actively encourages, nurtures and develops a diverse yet often inter-related range of businesses. The city’s comprehensive transport infrastructure, with a deep-sea port, two regional airports and easy access to the east coast’s principal northsouth road and rail routes, mean Sunderland is an easy, ‘go-to’ location for any business. Connectivity is key to effective businesses. Sunderland is the first UK city to offer blanket, super-fast broadband, and the City Council has also signed a deal with IBM to build a city-wide digital cloud - one of the first in Europe - which will bring massive benefits to growing businesses.

A smart and sustainable city Smart is a word that lies right at the heart of Sunderlandâ&#x20AC;&#x2122;s economic vision - a truly forwardthinking city that is not only making the most of its existing assets and strengths, but is creating a blueprint for sustainable growth by backing the industries of tomorrow. Proud of its roots and hard-working, enterprising culture, the city is reinventing its economy, replacing coal mining with cars, and shipbuilding with software. But by retaining its integrity and personality along the way, the city is playing to its strengths, making the most of the work ethic and adaptability of its people; capitalising on its river and seaside location; and building upon its track record of supporting enterprise to develop and succeed.

E info@makeitsunderland.com T +44(0)191 553 2100 W makeitsunderland.com

small business The North East has incubation facilities recognised as the best in the UK and is seeing record numbers of start-ups in some places. Opportunities exist now for SMEs to break into the burgeoning process industries sector. But some are struggling in recruitment

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small business

opinion

We are the champions Having helped 2,500-plus businesses to launch and survive at a rate that outstrips the national average, it’s little wonder the North East Business and Innovation Centre has been named incubation champion of the UK. Paul McEldon traces the background to success

It has been an outstanding year for the BIC. Being named National Business Incubation Champions by the UK Business Incubation for providing the right environment for start-up businesses and entrepreneurs to flourish in has been a fantastic achievement. I strongly believe that incubation is vital for regional growth and building a strong economy, quite apart from helping to put the North East on the map. The BIC is an enterprise agency with a difference. It has its own start-up team and over 1,000 people work on site, employed by both fledging and established businesses. It is a primary regional player in incubation, innovation and business support. Our range of business services on offer has increased year on year to adapt to

market demand. Based in Sunderland, we work in partnership with private and public sector alike to achieve our mission and build business success in the region. Many businesses begin in incubation offices at the BIC then progress to bigger space, for example Absolute Media North East. It produces media footage aiding business messages via the use of film. The company began with a virtual office, progressed to an incubator office and has now moved into even bigger office space while remaining at the BIC. It is rewarding to see businesses like John Hudson’s not just start out at the BIC but being able to grow and develop here too. It is admirable also to see start-up client Donna Petch shortlisted for the chance of her business, The North East HUB, to win mentoring support from Dragons’ Den-ner Deborah Meadon. Likewise multi-million pound turnover business Leighton Group had its first office at the BIC. We want businesses that are indigenous to the region, to start, grow and get size and scale here. It is great to see businesses grow,

creating new jobs and bringing in trade from outside the region and the rest of the world. It is vital we continue to create an environment which encourages enterprise and cherishes people who are in business. Having access to our experienced advisers helps hundreds of new businesses to start up each year by providing one-to-one business advice, mentoring and support, training courses, workshops and seminars. The BIC does not limit itself to working with one sector. Working with start-up and established businesses, I believe, is the key as it goes full circle; giving new start-up clients role models to aspire to. Since opening its doors in 1994 with just 22 units, the BIC to date has helped over 2,500 businesses to start up in the region and has achieved a survival rate which outstrips the national average. n Paul McEldon is chairman of the National Enterprise Network and chief executive of the North East Business and Innovation Centre at Sunderland.

I strongly believe that incubation is vital for regional growth and building a strong economy, quite apart from helping to put the North East on the map

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small business

overview

Sharpen up those skills In small business recruitment there are still too many young applicants lacking in key starter skills, firms complain Eight out of 10 small businesses believe many school leavers are not ready for a job and feel more should be done to help prepare them, the Federation of Small Businesses (FSB) says. Ted Salmon, the FSB’s North East regional chairman, says: “Firms in the North East are more than ready to invest time and money training staff in job-related skills. But they do expect them to come with at least the basics. “It is a concern that businesses repeatedly have to highlight numeracy, literacy and core workplace skills, such as communication, as major problems. These are the skills young people need to be equipped with to succeed in today’s tough jobs market.” The FSB wants to see schools give these skills a higher priority by embedding them in all teaching from an early stage. Salmon suggests: “All schools should be offering work experience and careers guidance to their pupils and engaging with local small businesses to ensure that young people are getting the work-related

learning that they need.” In an FSB survey, 59% of survey respondents who already employ 16 to 17-year-olds reported that their young employees had poor literacy skills. Numeracy was also judged to be poor by 55% and 56% said communication skills fell short. Unsurprisingly, two thirds of FSB members said that improving basic literacy and numeracy skills would better prepare young people for work in a small business. And, with so many young people still unable to find a job, the FSB is concerned that those lacking in the basic skills will find it tough to compete in today’s job market. Of the 2,774 survey respondents that

employ 16 to 17-year-olds, 77% also found that school leavers’ business awareness was generally poor. So extending the duty on schools to provide careers’ guidance to pupils as early as possible is key, in the FSB’s view. Early careers guidance and equipping young people with skills such as CV writing, time-keeping, problem solving and team working would not only help employers, but would give young people a better understanding of potential jobs and career paths, the FSB suggests. Small businesses have to contend with the reality that the brightest pupils may be snapped up by bigger firms but say many others would find job satisfaction working for a smaller and convivial set-up, such as a family business, where they can feel convinced they are a key member of the team. They still need a grasp of basics, though, the FSB says. n

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small business

Big firms bring opportunity Opportunities are here for SMEs to get a foothold in the £10bn sector in which North East enterprise excels The process industry – chemicals, pharma, biotech, energy and renewables - is already represented by more than 500 firms in the region. Representing 30% of the region’s industrial base, it brings in some £10bn in sales and continues to grow. And more and more SMEs are going all out to do business with the sector, supported by more than 80 mentors willing to guide aspiring SMEs forward. As part of a programme launched in 2012 by process industry cluster organisation NEPIC, a workshop was recently held at Wynyard Park. SME representatives there were told by mentors that “game changing, value adding” offers will be essential to make a breakthrough. Stephen Heath, UK procurement manager at Saudi Arabia’s major petrochemical manufacturer Sabic, advised delegates that, despite its many thousands of suppliers globally, establishing long term strategic relationships with each is vital to the business, which includes major operations at Wilton and North Tees. He described innovation, cost reduction and, vitally, environmental, health and safety as key to a “compelling game changing offer” that could take SMEs into the sector. Malcolm Knott, managing director of the highly successful SME ITS says SMES must also deliver a strong “value

Don’t try to be all things to all men – focus on your credibility

proposition” – “the key to survival not growth, is selling what companies want, not what we think they need”. Ian Stark, who had a successful career at chemical giant Dow before returning to his SME roots following a recent management buy-out, advises: “Don’t try to be all things to all men – focus on your credibility.” Stark, now chief executive at Chemoxy International, described his experiences and discussed the sector’s tendency to be risk averse. Mentors also stressed a need for SMEs to understand the criticality of “licence to operate” issues for the process

sector. The BASME programme, funded by the Regional Growth Fund until 2015, has engaged with more than 90 SMEs across the region already. This £1.5m industry matched programme will offer mentoring to 400 SMEs across the region, in supporting for the delivery of direct new sales in the North East, promotion of export opportunities in global supply chains, or improving innovation to bring new products and services to market faster. The three year programme is aimed to generate more than £40m of additional sales and create 1000 new jobs. n

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small business

overview

A doggone snip of a sale Inspiration for a start-up can be staring you right in the eye, as Mark Berriman has discovered Man’s best friend can be his motivator in small business too. Charlie the labrador proved that. Mark Berriman went into business for himself after finding difficulty in sourcing his dog Charlie’s favourite dish. A niche opportunity, he rightly thought. The petfood sales website he set up at Jarrow, within a year, had sales of half a million, leading eventually to a customer base covering 50 countries. Ten years later Berriman, still only 33, has sold Petsupermarket.co.uk to the London based firm Medicanimal. The business changed hands as a £10m-plus international brand, sold on a share purchase basis with Berriman retaining some of the intellectual property rights. Ivan Retzignac, chief executive of Medicanimal, described Mark’s business as fabulous, and Mark’s creative mind has now turned to other opportunities. Sara Davies proves remarkably how younger people can become talented creators of companies in the North East. Sara, 28, started her successful business during her final year at York University. She achieved a first class honours degree there, finished top of her class – and had her business set up as a limited company by the time she graduated. Her mail order crafts company, initially a project forming part of her course, is now seven years on a

sound commercial operation run from Coundon in County Durham. It employs around 40 staff, has a US operation in California, and a combined UK and US turnover of £7m a year. Sara’s prowess as a successful businesswoman,

Proud to be a cost cutter Proud by name, proud by nature – at least he has reason to be. For Mike Proud has demonstrated just how inexpensively a successful business can be created these days using IT expertise and other modern conveniences. From a shed in the back garden of his Tyneside home he set up Red Maple, a provider of managed IT services, solutions and resourcing. The six-year-old firm is growing rapidly supporting not only SMEs and young entrepreneurs at home but also businesses in Hong Kong, Dublin and London. BT uses it. His staff are home workers glad to be free of commuting and the company transport for on-site visits to clients is electric vehicles.

designing and manufacturing products for the crafts industry, is acknowledged by an array of awards that have come to her.

These include UK Emerging Entrepreneur of the Year at the Ernst and Young Entrepreneur Awards and the Santander SME of the Year award at the National Business Awards. She now heads the board of directors at the Craft Hobby Association UK, peer acknowledgement of her skills. Sunderland is noted now for its nurturing of small business, having had some catching up to do earlier. In 2010, It had the most start-ups in any UK region according to a Royal Mail survey, and in 2012 it reported a record number of start-ups again. Recent successes include award-winning digital technology firm Media Savvy and automotive coatings firm Interplas Coatings NE, with its workforce grown from one to 30 in a year. Finding suitable and supportive premises is one thing, staffing another. More than half of UK tradesmen (51%) now rely on TWAGs (tradesmen’s wives and girlfriends) to help run their company. Despite TWAGs working on average two days a week (one in four work three or more days a week), nearly a third of small-trade business owners pay a TWAG no money at all. Yet these TWAGs may have been helping their partners for over four and a half years, and many juggle that with other jobs. This finding by Direct Line for Business (DL4B) perhaps indicates the tight

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small business It’s a hard graft with more than half of UK tradesmen relying on wives and girlfriends to help run the business, often without pay

Flying start: Sara Davies in a few short years has turned her degree course project into a transatlantic business success.

bottom line that many little firms must walk these days. For firms that do have full-time staff the good news has been that the date from which they must start autoenrolling their employees in workplace pension schemes has been put back by more than a year. The Government wants more people to save for their retirement, not just rely on basic state pension. So under new rules, employees must be automatically enrolled into a workplace pension scheme – if they are not already in an equivalent scheme – and the employers must contribute to each individual’s pension fund. The scheme, being phased in over a few years, started in October. However, Tyneside accountants Robson Laidler LLP are advising that whereas businesses with fewer than 50 employees originally had to begin autoenrolment from April 2014 this date will now only apply to businesses with between 50 and 249 staff. Businesses of fewer than 50 staff will not have to start auto-enrolment until June 2015. Andrew Robson, a Robson Laidler associate, says: “This good news for many smaller businesses means they have more time to prepare for the change.” n

universities In association with

North East business benefits immensely from back-up it gets from five universities and more than 30 colleges on its doorstep. The universities provide not only rich offerings in recruitment but also ongoing development of talent, invaluable research and development support and joint venture opportunity

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universities

opinion

Open for business Here we throw open university and college doors to get insights into some of the facilities they offer North East businesses in a wide variety of ways NORTHUMBRIA UNIVERSITY by Lucy Winskell

Lucy Winskell: A vital flow of skilled staff ensured. Benefits are mounting for both sides Northumbria University has a proven track record of working with external organisations in the North East. We believe that by building partnerships with business, the value in our students, graduates, staff and facilities can be unlocked. Our strong relationships with business are vital for our students as they ensure our programmes are relevant and fit the needs of industry. In turn, we strive to ensure our graduates are highly employable and capable of making immediate valuable contributions at their place of work. Northumbria runs a range of initiatives to help business access academic expertise easily. Knowledge Transfer

Partnerships (KTPs) allow businesses to tap into the expertise of universities which, in turn, helps them to improve their competitiveness and productivity. The schemes are renowned for helping firms to increase their turnover and find new markets at very little cost. Each partnership employs an associate – a recently qualified graduate, supervised by an experienced academic – to work on a project which is core to the strategic development of the business. The partnerships are part-funded by a Government grant, which helps support the cost of employment, equipment, training and travel. As well as providing practical, researchbased solutions for companies, the schemes also offer recently-qualified graduates the opportunity to gain workbased knowledge, and many go on to further study as a direct result of such programmes – ensuring the vital flow of skilled staff for employers. As a result of two KTPs, Northumberland firm Renown Engineering introduced new processes which have enabled the rapid development and cost-effective manufacture of new products and also embedded a more strategic approach to business management – developments which have seen the company’s sales and profits rise. Providing training for staff is also a key area in which Northumbria offers

support to businesses. One area which has grown significantly in recent years is work-related training. Through the development of a Work-Based Learning Framework we can offer bespoke programmes of study to organisations seeking to develop their workforce. Work related learning can have a huge impact on a business, as learners are expected to apply their new knowledge and skills to their workplace. Experience demonstrates that this very often results in effecting real change and improvement in work practices. One example of this is with Newcastle-based engineering group British Engines. The university worked in partnership with the group’s BEL Valves division to accredit their existing training programmes and developed modules based on live workplace projects. Some of the projects have led to direct improvements in efficiency and, in addition, the employees received credits to support future learning development. One employee has already used the credits to gain a place on a leadership and management degree at Newcastle Business School. Providing access to a pool of talented students is another way that we can help business. Students can share their expertise for a matter of a few days or up to a whole year through collaborative projects and student placements. In these difficult times, this

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universities is a key way of accessing knowledge and expertise while students benefit from hands-on, real experience in the workplace. By working with business, Northumbria University plays a pivotal role in ensuring the successful transfer of knowledge into the wider world. By working together we can drive the economic and intellectual development of the region and beyond. www.northumbria.ac.uk/business Lucy Winskell is pro vicechancellor, region, engagement and partnerships, at Northumbria University

NEWCASTLE UNIVERSITY BUSINESS SCHOOL by Dr Joanna Berry

Dr Joanna Berry: Collaboration is the key to success. Another year of inspiration (and perspiration!) At Newcastle University Business School our first academic year in our new home on Barrack Road has brought with it an ability to strengthen our engagement with companies of all sizes from across the region, and the globe. In times of rapid technological disruption and economic upheaval, collaboration is the key to ensuring we network effectively and efficiently.

opinion

We aim to create a forum for a meeting of “minds” and practice, allowing for the creation of good ideas, savvy investment, and above all, inspiration to do things differently supported by the latest critical thinking. Regional businesses are a huge part of the business school’s inspiration. We have a number of research projects that see our academics working with businesses to help inform their studies and make sound recommendations for future business management practice. The business school takes the university’s aim of being a “civic” university very seriously. Through our busy events schedule (over 60 were held in 2012, welcoming almost 2,300 visitors from business, policy and practice), executive education, and partnership working we can provide free advice, best practice and the latest academic thinking on business. The business school is constantly building on its regional and international links to bring the best into, and out of, the North East. Examples include: our business ethics series, run in partnership with the Bridge Club; hosting the first non-stop, 54-hour Start-up Weekend outside London; and attracting some of world’s brightest minds like the former Costa Rican Minister of Trade, to deliver a lesson on economics. We also work tirelessly to ensure that our student body is engaged with the regional business community. We create “work-ready” and employable graduates, not just qualified individuals: a generation of new talent set to contribute to our economy. We do this in a variety of ways, for example, through our Global Experience Opportunity programme. This allows students to take up work placements with companies from local SMEs to

New home: Newcastle University Business School. global corporate giants across the world. Also, many of our programmes contain “live” assignments as part of a degree. As a result we see many student start-ups continuing to trade long after the work is handed in. So much is happening, but there is also so much still to do. We are listening to the regional business community and we need your help and input to ensure we are providing the services and connections you need. We are looking forward to future engagement with regional businesses in 2013. We know what it will mean to us: inspiration – but a fair amount of perspiration too! www.newcastle.ac.uk Dr Joanna Berry is director of engagement, Newcastle University Business School.

DURHAM UNIVERSITY Partnerships are showing progress Durham University is ranked in the world’s top 100 universities by the Times Higher Education/QS 2012-13 survey, and in the top 50 in physical sciences. Its main objective in engaging with business and industry is to build long-term partnerships enabling coproduced research and collaborative education to be undertaken.

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large corporates with a regional base It works enthusiastically with North East such as Procter & Gamble. businesses with whom its objectives of In the case of P&G, the university’s excellence in research and education interactions with the company align. It has joint research projects are international. Indeed, Durham running presently with many regional University was named Global Business companies. These include spin-out Development University Partner of the companies such as Reinnervate, Kromek Year 2011 for its innovative approach and Durham Graphene Science – the to working with industry. latter won the 2012 Times Higher P&G at Longbenton and Durham Education Outstanding Contribution University are conducting joint research to Innovation and Technology award supported by the Regional Growth for the development of a clean and Fund. Durham University Business scaleable alternative for production School (DUBS) research into knowledge of grapheme, the “miracle” substance management and innovation has made of nanotechnology. a substantial impact on 100 regional Joint research projects are also running sub-sea technology organisations. with SMEs suchBQ as Cambridge Research 359_13 NUBS Ad 148 x 98 (v.1)_Layout 1 17/12/2012 16:29 Page 1 This has led to the creation of a North Biochemicals of Billingham, as well as

universities East subsea committee, resulting in improvements in management of knowledge, levels of innovation and productivity. Also Durham University, Business Durham and the Centre for Process Innovation are partners in a memorandum of understanding about development of the North East Technology Park (NETPark) at Sedgefield. As well as contributing to several spin-off companies based there, the university has an on-site presence through its NETPark Research Institute. The three partners have collaborated on developing a Business Innovation Gateway (www.bignetpark.co.uk),

Find out more about our MBA programmes visit:

ncl.ac.uk/nubs Find us on:

A New Perspective

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universities through which companies can access services provided by the individual partners. In the case of Durham University, these are mainly its consultancy and analytical services managed through its Durham Business and Innovation Service (www.dur.ac.uk/ business.gateway).

Advancing frontiers: Professor Stefan Przyborski of Durham University is also chief scientific officer with Reinnervate, a company founded 10 years ago as a spinout from the university. The firm develops technologies to aid cell-based research, particularly in the field of stem cell biology. It has more than 55 technical facilities available to business, ranging from Archaeological Services to X-ray Diffraction Analysis (contact analytical. services@durham.ac.uk). Knowledge Transfer Partnerships (KTPs) are particularly effective in engaging with regional firms, both in technical and commercial areas. Through a KTP with Durham University Business School, the long-established engineering firm Metal Spinners Group (MSG) was able to introduce accurate and sustainable business development procedures leading to a more effective operation in international markets.

opinion

A KTP project between DUBS and Eden Farm, distributor of ice cream and frozen food, enabled the company to achieve significant growth. Durham University offers businesses a wide range of options for accessing learning opportunities, either through bespoke short courses or existing approved modules within the postgraduate and undergraduate programmes. Its graduates are officially recognised as being highly employable – Durham University is ranked in the world top 20 for employer reputation (THE/QS 2012-13), and through its Careers, Employability and Enterprise Service, it facilitates recruitment by regional companies from its vast pool of outstanding talent (visit www.dur.ac.uk/ careers for more information). www.durham.ac.uk/bis www.durham.ac.uk/business

TEESSIDE UNIVERSITY Lighting the entrepreneurial flame Teesside University has been described as one of Britain’s best universities by Business Secretary Vince Cable. Its approach to working with business also commits to supporting the economy of the North East region. To date, 430 new businesses and 590 jobs have been created through the university’s graduate enterprise and Digital City Innovation initiatives. A report by the KSA Partnership shows Teesside’s DigitalCity Innovation is contributing £20m to Gross Value Added (GVA) in the North East. In October, graduate business Shutter Media received a visit from Deputy Prime Minister Nick Clegg, in recognition of its contribution to business growth and jobs in the area. The university provides North East

businesses with tailored support focused on improving business performance from bespoke consultancy to flexible graduate schemes that include expert academic input. Over the past three years, as part of a major workforce development initiative, the university has worked with employers to provide more than 8,000 employees with advanced skills and qualifications. A recent grant award of £1m from the Government’s Higher Education Funding Council for England (HEFCE) will help build on this skills base by supporting further employer partnerships. The money, the highest single amount available to an institution, will help employers enhance performance through delivery of higher education to people already in work. The university is lead partner in the Enterprise Europe Network North East, bringing a new dimension to business support. A partnership with the Centre for Process Innovation and Newcastle Science City, the network helps North East firms to develop new research and technology links and markets across Europe. In addition, the university’s mission to grow enterprise and develop talent in the digital sector was recently boosted by a £1.9m grant from the European Regional Development Fund. DigitalCity Innovation, the university initiative partnered with DigitalCity Business, is creating record numbers of high-growth businesses and jobs in the North East. It harnesses the ideas, graduate talent and academic expertise at the university to generate new digital businesses, connect business with research and address the digital challenges of the future. A key driver of DigitalCity Innovation is the DigitalCity Fellowship scheme, which supports talented graduates to

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universities

opinion

turn digital business ideas into reality. Former Fellow Anthony Roderick has grown his creative games development company from a start-up in 2010, taking on an extra four employees this year.

society as a whole is carried out with positive impact to real business issues in the real business world. Teesside University has been named the sole higher education partner for the North East Entrepreneurs’ Forum. As a corporate member, it now works alongside the likes of Brewin Dolphin investment management, Yorkshire Bank, PWC financial services, and Sage business software experts to support the forum’s work. It recently also put on events in support of a global entrepreneurship week. www.tees.ac.uk

UNIVERSITY of SUNDERLAND

For fun and profit: Anthony Roderick (left) and business partner Martin Coates are expanding their two-year-old creative games business. Landslide Studios expects to recruit 14 more people within nine months. New spinout company Dynamic Motion Detection (DMD) Ltd has been established on the back of research at the university’s Social Futures Institute. The DMD product harnesses photorealistic 3D computer games and sophisticated motion-capture technology, enabling players to train in a virtual gym, punch along to their favourite music or fight against an opponent. DMD aims to improve health through High-Intensity Interval Training (HIIT). Teesside University’s five research institutes underpin its work with business. They seek to ensure that research of value to industry, the public sector and

Impressive partners of choice A company launched by the University of Sunderland now pairs graduates with a wide variety of businesses on paid placements. Given that the university is already Nissan UK’s “university partner of choice”, enjoying strong partnerships also with Procter & Gamble, IBM, Intel and BT, the potential in recruitment there is notable. The placement firm, called Sunderland Intern Factory, takes in final-year students of the university as soon as they graduate, matching their skills to a suitable employer. They then spend three to 12 months with the organisation on a minimum pay of £14,859 a year pro-rata. This complements and runs parallel with the university’s graduate internship scheme. This also offers paid placements, but with small-to-medium private sector firms in the North East for a minimum of six months. More than 85% of 110 Interns recently checked out have gained full-time work or a contract extension.

Nickola Gray, university internship development manager, says: “Through the Intern Factory we can now work with any organisation no matter what size, public or private.” Tourism study at the University of Sunderland is ranked fourth best in the UK in the Guardian University Guide 2012. BSc (hons) modules include urban tourism, e-tourism, international hospitality management, mass tourism, strategic planning, ecotourism and many others. So there is no shortage of options. Through work placements and live projects, the BA (hons) events management gives students a chance to plan and manage events from year one onwards. This is combined with work experience. An MSc in tourism and hospitality includes the consideration of links between travel, tourism and hospitality in relation to organisation and management, which is also the nub of satisfying the consumer. The MSc in tourism and events focuses on tourism and events planning, monitoring and evaluation, drawing upon interrelations among tourism and arts, sports, cultural and business events. These courses have been developed closely with the tourism, hospitality and events industries here and on mainland Europe. Field trips take in the likes of Dublin, Prague, Barcelona and New York. Opportunities exist for work-based learning in the UK and the USA, and undergraduates can additionally study in Australia. Innovative courses, international research programmes and initiatives to engage businesses and organisations all hallmark the faculty of business and law at Sunderland, whose law department has been acclaimed in the Sunday Times

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universities university guide as “best in the UK for teaching excellence.” The LL.B gives students academic training for aspiring solicitors. Barrister ambitions are also met, and there is the opportunity to obtain licensed paralegal status. Significantly, too, a BA in business law (top-up) is available, as is a foundation degree in law and the chance to combine study of law with another subject. Modules introduced recently include space law and coroners’ law. Postgraduate courses include criminal law and procedure, and human rights. Masters’ programmes allow specialisation in a wide range of contemporary legal subjects. The law department also recently partnered the University of West England at Bristol and the National College of Legal Training to provide the legal practice course for would-be solicitors. Business and management degrees cover accounting and finance, marketing and human resource management. Postgraduate programmes are underpinned by accredited Peer Action Learning Sets (PALS). The university’s importance to business and the economy of Sunderland is seen in the city council’s Economic Masterplan. It places the university “at the heart of the city’s economic development”. The council sees new industries - low carbon, automotives, software - as key to the city’s prosperity, partly due to the university’s standing in these fields. The university is a core member of Sunderland’s Business Group. The region’s Software City project was a concept crafted and shaped at this university, and in 2012 Sunderland Software City has reached all its targets on new software enterprise creation. www.sunderland.ac.uk

opinion

tyne metropolitan college Partnership with business meets local needs North Tyneside Business Forum and Tyne Metropolitan College have formed a partnership helping to ensure that further education training in the borough can meet the needs of industry in local areas. Closer links between business and further education providers are being aimed at ensuring that future skills needs in the changing local economy can be identified and matched with learning and training provision. Victor Reid, the college’s director of business development, says: “Sharing a geographical catchment and with similar goals, it makes sense to work more closely together to help respond to the needs of local business.” The forum’s vice-chairman Peter Hedley feels the relationship will help ensure that business can recruit the right employees with the right skills to slot into the emerging industries on the north bank of the Tyne, and across

other growing sections of the business community. Tyne Metropolitan College’s results for 16-18 year old students on long courses ranks it above other colleges in Tyneside & Northumberland. www.tynemet.ac.uk

GATESHEAD college Honing construction skills Gateshead College, which opened a £7.5m extension to its construction skills academy in 2012, was among the first North East training providers to gain a share of a new £1m Government initiative to boost the skills of people who advise on making property more energy efficient. The college also operates the North of England’s first performance track, a 2.8km oval course providing for conventional and low carbon vehicle development, testing and trialling. The track, which is available for commercial hire, is the only publicly accessible track located in the North of England. www.gateshead.ac.uk n

Getting the knack

More companies are successfully spinning out of UK universities. Some 3,118 new businesses emerged from universities of the UK in 2011 – against 2,457 a year earlier – and North East universities contributed to the increase. These firms now have a combined turnover of around £2.5bn and employ more than 20,000 people. Emphasis has been on graduate start-ups. At venture capital firm MTI, a spokesman says the universities are getting better at identifying commercially viable innovation and supporting them on to commercial success.

New head for business school

Newcastle University Business School has a new director. Professor John Wilson recently joined from Liverpool University, where he was professor of strategy at the management school.

Setting a standard

Newcastle has twice been voted the best university city in the UK.

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universities company profile

The North East’s global business school Developing new perspectives in an ever-changing world Recent history A member of the elite Russell Group of universities, Newcastle University Business School is an ambitious, forward-thinking institution born out of one of the most reputable, research-intensive universities in the UK. The Business School has grown exponentially since its formal inception and is now home to 2,800 students. Today, students from over 80 countries are represented across a diverse suite of academic, industry-relevant programmes that make it more than ‘just another management school’. This growth has financed a £50m, state-of-the-art headquarters, opened in 2011. The Business School is proud to be able to offer the region, and the world, a world-class business education in the heart of Newcastle. Ambition Numerous professional and international accreditations have been achieved, alongside a renewed focus on international industry partnerships that connect students to employers, influence policy and practice, and ensure ‘real-world’ relevance to academia. The Business School believes in educating students at all levels as responsible leaders, building on sustainable research and teaching practices. Students are encouraged to challenge themselves, and one another, to think ethically as well as globally. In keeping with the University’s civic agenda, the Business School is committed to supporting the local community, and works proactively with schools, regional SMEs, and partners to share knowledge, broker new projects,

The Business School staff and student population represents over 80 countries. and stimulate commercial collaboration. Research-led teaching and learning The Business School offers a diverse range of programmes, from undergraduate degrees to MBAs. Its research-active faculty specialise in: • accounting and finance; • economics; • strategy, organisations and society; • human resource management; • innovation, enterprise and e-business; • operations management; and • marketing. As a member of EDAMBA (European Doctoral Association in Management and Business Administration), the Business School’s DBA is one of only 18 in the UK to have met exacting quality standards. The Business School’s dedicated research centre, KITE (knowledge, innovation, technology & enterprise), is currently developing its research, leading new perspectives in social enterprise, information sharing and governance, and entrepreneurship. Real-world focus Employability and entrepreneurship have been key elements within the Business School’s culture for many years;

as such its graduate employment rates are extremely high, as are the number of students wishing to establish their own companies. Many students get their first taste of running a business through degree programmes, with modules dedicated to setting up and running a start-up enterprise. As well as one of the best university careers services in the UK, the Business School has developed successful models for global work placements and internships that benefit both employers and students, and ensure that the student experience has international opportunity at its core. Ninety-eight per cent of 2012’s graduates who did a 12-month placement achieved a 2.1 or above. Visiting professorships, such as the David Goldman Visiting Professorship, provide external figures in industry the opportunity to work with students and faculty, applying theory to industry practice. They also open up valuable ‘real-life’ projects that take the student experience further beyond the classroom. The Business School benefits from an astute panel of international advisers, who meet bi-annually to monitor and feed back on progress being made across a number of imperatives, including the student experience, recruitment, retention, and employability. n

Laura Foster Head of Communications laura.foster@ncl.ac.uk 0191 208 1500

voluntary sector While â&#x20AC;&#x2DC;going cannyâ&#x20AC;&#x2122; is understandable, another town has launched a volunteer programme. It all suggests pride, loyalty, and recognition that Government cuts should not be allowed to decimate our community groups

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voluntary sector

Why we just had to do this Andy Preston, back in his home town Middlesbrough after a career in international finance, building businesses for banks and running a large hedge fund, tells why he has felt compelled to get involved in community support

We felt duty bound to create something new which united businesses and individuals who wanted to stand up and do something good for their home town

In my 46 years I’ve done a lot of things. And because I keep busy and don’t lack confidence - some of the stuff I’ve done has been unusual and interesting. But one of the best things I’ve ever done is to help an incredible group called Middlesbrough Powerchair Football Club.

To see this remarkable team of individuals doing what they love competing at sport and representing their home town - is more gratifying than I can describe here. The £4,000 we gave them meant they could get more people like Owen to join in and experience the pride and passion of

competitive sport. It also means they can represent our town in the Championship Division, National League. We (myself and Tanya Garland of PR and marketing firm Cool Blue) invented the Middlesbrough and Teesside Philanthropic Foundation in 2010 - just

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voluntary sector

Beyond words: The sight of this incredible football side doing what they love competing at sport and representing their home town - is more gratifying than entrepreneur Andy Preston can describe. as Government cuts were starting and the sudden lack of money was killing vital community groups. We felt duty bound to create something new which united businesses and individuals who wanted to stand up and do something good for their home town. The Powerchair Football Club is just one of many groups we’ve identified as being of huge value to our community. We feel an obligation to do what we can to support groups like this with our money, which comes from local businesses and affluent individuals who voluntarily chip in between £3,000£15,000 to our pot to help make Teesside a better place in which to live, work and do business. Right now we have about 29 of these generous and brave financial backers we call them patrons. So far we’ve raised about £400,000 from our patrons and spent about £300,000 of that. The remaining £100,000 will be invested in community groups over

the coming months. Our overheads are tiny - nearly all of our money goes direct to the groups we support. Work we’ve done so far is genuinely amazing and has attracted a lot of attention from local and national media - I’ve been told that we’re the most successful group of our kind in the UK – and I put this down to a special

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sense of pride and loyalty which people from Middlesbrough and the whole of Teesside share. A good example of the Teesside pride we’re tapping into was embodied in a phone call I took while on holiday recently from a guy called John Cheesebrough who lives in France. John had read about our work and wanted to make a meaningful financial contribution. He wasn’t looking for publicity or anything - only to do something to help his home town. So far we’ve achieved a lot and we’re thrilled to have helped so many groups and, in particular, we’re delighted to have created and funded more than 35 apprenticeship places for local youngsters, many of whom are desperate for their first start. I believe that 2013 will be an exciting year for our young charity, and that we can do even more great work by using the wealth of our backers to support our very best community groups and show solidarity across the whole of Teesside. If we stay positive, work hard and stick together I believe we can make things even better. n

Three more to tackle Things have gone well for our new charity so far. But what do we do next...? Well, we’re going to be busy. Firstly, we’re working hard to launch a new charity event, the UK’s biggest art competition. This will be done in partnership with Middlesbrough Institute of Modern Art – it will be a huge deal and raise the profile of our area. Secondly, I am working with two groups to create a major fundraising event during National Homelessness Week; a Big Tees Sleepout will see hundreds of folk sleeping out and raising money for local homeless causes. Thirdly, I’m developing a plan to approach some larger donors/foundations that can write much bigger cheques than we currently receive. When this is happening we can start to extend the reach of our work. Currently we’re often unable to help some great local groups due to lack of resources. I hope that will change soon.

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voluntary sector

Kind hearts still abound While most people recognise the need to ‘go canny’ with their cash at this time, donors from all walks clearly still believe in giving generously in money or time if others can benefit. Rob Williamson relates here some of the good that can result Charitable giving has been hitting the headlines again. Recent research has prompted angst and soul searching because, it has been argued, younger people are giving less and, as a whole, charitable giving in the UK has dropped. At the Community Foundation, where our job is to build philanthropy that benefits Tyne and Wear and Northumberland, we treat these “sky falling in” stories with a little caution. Certainly there is greater need than ever for people and businesses to support their localities, given the reduced role of public bodies in funding community groups. But there is also plenty of evidence that donors from all walks of life remain willing to give generously, assuming they can do so in ways that reflect both their means and their interests. I can illustrate that with three examples from our work in 2012. In October, Port of Tyne pledged to increase its charitable commitment by donating 1% of its pre-tax profit every year through the fund it has at the Community Foundation. This followed work we did for the port to identify local needs and assets in communities that could drive change, since the port was keen to align its activity and growth directly with what it

Most of the causes helped cannot command headlines or pay for fundraisers

put back into the area. A panel of its employees will advise on grants from the port’s Community Action Fund, focusing on job opportunities for young people, environmental improvements and involvement in the community. The annual donation of 1% of pre-tax profits will make the port one of our largest corporate donors, and its continuing commitment will make a difference to people and communities for years to come. The importance of making donations that reflect how the business connects to its area was also key for Capital Shopping Centres. The company took up the opportunity to have donations to us matched through a Government scheme. Gifts of £1,000 each to our Give2 Gateshead and Give2 Newcastle Funds, the locations of the Metrocentre and Eldon Square, have been stepped up 50% at no extra cost. These funds, which make up part of our endowment, will help support charitable causes in those areas for generations to come. But giving of time and expertise is just as valuable. CultureMatch, a scheme run by our Sponsors Club project, connects business people wanting development

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Plain sailing: Gillian Scott from Port of Tyne with members of the Port of Tyne Fund committee and students from Churchill Community College. opportunities with cultural bodies seeking business skills. The match ranges from simple advice, to pro-bono work, up to placing business people on organisationsâ&#x20AC;&#x2122; boards. This is a win-win-win situation, as the cultural organisation gets the skills, the individual has a valuable development experience and the business gives something back. Participants to date include Yorkshire Bank, Gentoo, Ward Hadaway, UBS and Ryder Architecture. At the Community Foundation, we are proud that so many people, families

and businesses trust us to support them in giving money, time and expertise. They tell us they do so because we are effective, efficient and because we ensure their generosity reaches people and voluntary organisations in most need. Mostly they are causes which cannot command headlines or pay for fundraisers. Our existing corporate supporters are hugely committed, but there is always room for more. The sky may not be falling in, but the time has never been better to give locally. n

An ongoing commitment will make a difference to people and communities for years to come

Rob Williamson is chief executive of Community Foundation Tyne & Wear and Northumberland.

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voluntary sector

overview

A town that cares BQ Yearbook reports on a hugely successful scheme in Darlington which taps into the vast reserves of good intentions held within the region’s workforce Businesses in Darlington are forming the town’s first dedicated employersupported programme of volunteering. Darlington Cares is employee volunteering, and working with local charities and community projects particularly in areas of disadvantage. Professor Cliff Hardcastle, who chairs Darlington Cares and is deputy vicechancellor (research and business engagement) for Teesside University, says: “We can match the combined resources of volunteering and skills of members to community projects where they will have highest impact.” Besides the university’s support, the group’s board has vice-chairing Alasdair MacConachie of Sherwoods Ltd and Anne Yare of DeepOcean Group, as well as representation from the Student Loans Company, Cummins, Marchday and Darlington Council. Darlington campus of Teesside University is hosting the initiative. Katie Blundell is working on the programme, which has already included a Secret Santa scheme for the borough’s looked-after children. Katie says: “The programme for 2013 will include annual schemes and team challenges that will make a real difference to the local community. They will also offer benefits for employers and their employees through skills development and team building.” n Contact: Katie Blundell, tel 01642 738970, k.blundell@tees.ac.uk

Doing the round: Kavli’s managing director Paul Lewney joins disabled rider Liz Gandy, a lecturer at University of Sunderland, on a tour of the new Kavli Stables at Washington Riding Centre following a £25,000 donation from the Gateshead cheesemaker.

A fine spread of cash The sort of change a considerate company can bring about for people that were previously strangers was demonstrated recently by Primula, maker of the squeezy cheese produced from Gateshead. Primula, through its owner the Kavli Trust, donated £25,000 to fully fund two blocks of new stables at Washington Riding Centre for Tyne and Wear Riding for the Disabled Association. The new livery stables, home to eight new horses, are enabling the centre to generate a sustainable and long-term source of income promising self-funded developments and upgrades to follow. Eileen Curley at the centre says: “By being able through this to introduce new horses we can also increase job prospects. It means benefits for our centre and benefits for those who ride with us.” Paul Lewney, Kavli UK’s managing director, said an employee of the firm, Maureen Brown, nominated the centre for the award. Opened in 1977 by the Princess Royal, the centre offers lessons and stable management training for children and adults with disabilities and difficulties. The Kavli Trust supports causes globally.

communication & transport While it is independently recognised as having some of the best seaport and airport facilities in the country, the North East both through its public and private sectors will have to stand its ground to get fair consideration in rail, road and aviation infrastructure. But at least it should have a good year in terms of the provision of broadband

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communication & transport

Vital connections Councils and businesses are mounting a powerful lobby to ensure that on road, rail and in the air, the North East will have a full role in future developments. Paul Watson explains the importance of the campaign

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communication & transport The economic and social benefits to the North East of an efficient transport system, linking to wider national and international markets, cannot be overstated for the growth and competitiveness of this part of the country. The Association of North East Councils has consistently made a strong case for national policy decisions on transport and connectivity to reflect the needs of this area of the country, and for investment in infrastructure to support our economic growth ambitions. We have made a strong submission to the Government on proposals for a future aviation policy - stressing the importance of regional airports and services to the economy - and have highlighted the need for continuing investment in the East Coast Main Line in response to the Inter City East Coast Franchise consultation. We look forward to hearing the Government’s response to both consultations early in 2013. Approaching the end of 2012, we welcome the commitment, announced in the Chancellor’s Autumn Statement, to bring the A1 between London and Newcastle up to motorway standard. There is, however, still a case to be strongly made for Government funding to advance incremental improvements to the A1 north of Morpeth to Scotland. This is a stretch of road which, following joint lobbying with the business community, has been redesignated a Route of Strategic National Importance. As for High Speed Rail, we also welcomed the announcement in the Autumn Statement to connect the east and west side of the country from London - Birmingham onwards to Leeds and Manchester. Connecting both sides of the country is positive, but we need to go faster and further.

It is critical that the North East is linked to HS2 right from the outset, so we will actively lobby for this in 2013 and seek to inform and influence the study the Transport Secretary has pledged to

Transport and connectivity are absolutely linked to economic prosperity and competitiveness of cities, there being many international examples of where this is so, particularly in regions of France and Spain progress early next year on extending high speed rail north of Leeds and Manchester. We believe high speed rail has the potential to fundamentally transform the economic geography of the United Kingdom. All 12 member authorities of the association have given cross-party support to make the strongest possible case for the North East of England to be connected. Consistently we have argued for a whole network approach that links

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major cities and economic areas, and have underlined the importance of the North East being linked right from the outset. We believe there are compelling economic arguments that underpin our position, with the most recent research forecasting a £3.1bn productivity benefit for the North East, through helping connect businesses to key markets, attracting inward investment, generating jobs and major tourism opportunities. As I know you will appreciate, a strong economy in the North East is essential to the UK meeting its objectives for balanced growth. And I know that transport and connectivity are absolutely linked to economic prosperity and competitiveness of cities, there being many international examples of where this is so, particularly in regions of France and Spain. Importance of linking centres of economic activity across the country was a view strongly expressed by Scotland’s First Minister, Alex Salmond, on a recent visit to the North East. I am keen to explore how we can work collaboratively with partners north of the border to realise a shared ambition for high speed rail. The Association of North East Councils will, during 2013, continue to stress that the economic case for being linked into HS2 is as strong as the arguments about higher speeds and increased capacity. We will be encouraging those involved in the debate, and who will make decisions on the future of high speed rail, to recognise the importance of transport investment as an enabler to economic competitiveness and economic resilience for areas such as the North East. n Cllr Paul Watson is chairman of the Association of North East Councils.

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communication & transport company profile

Living and Working at the Speed of Light Super-fast fibre broadband – Farooq Hakim, BT’s North East Regional Director tells us how BT is keeping the North East connected in more ways than one Super-fast fibre broadband has arrived and is helping to drive economic recovery across the North East. More than 600,000 homes and businesses already have access to the high speed technology and more is still to come. The ever increasing availability of fibre broadband will certainly help drive economic growth, attract business to the region and give established businesses a level playing field and more opportunities to compete in the global marketplace. Download speeds of up to 80Mbps and upload speeds of up to 20Mbps* means whatever you’re doing online, you can do it better and faster with fibre. By Spring 2013, Openreach, BT’s local network business, aims to make speeds of 330Mbps* commercially available where fibre broadband has been deployed which is even better news for business. The new network is available on an equal basis to communications providers in the UK bringing choice and competition, which helps keep prices low. BT-sponsored research* revealed that fibre broadband will help performance in home based, full-time, part-time or just now and again businesses, enable new businesses to emerge, encourage flexible working, boost sales and provide better communications with customers – all benefits on the top of every company’s agenda. • instant access to shared documents

Farooq Hakim, BT Regional Director, North East. stored centrally • improved business performance & business creation as a result of cloud computing • faster sending and receiving of media – heavy files • ability to host lots of people – colleagues, clients or partners – on real-time video calls • the capability to be able to thrash out solutions much more quickly and build better relationships with everyone • a reduction in time spent on travelling and the associated costs • a better work-life balance BT is investing in its existing network too - BT’s enhanced copper broadband is already available to more than 830,000 homes and premises in the North East, with coverage expected to reach 91% of the region by Spring 2013. And once again this network is

available on an open, wholesale basis. We’re also expanding our Ethernet services which enable medium-sized businesses and organisations to opt for a guaranteed broadband speed up to 10Gbps. The North East is well served with Ethernet with more than 40 nodes already giving good coverage across the region. Together, these technologies and faster broadband speeds will provide a huge boost for businesses and growth in the North East economy. The communications revolution is having a major impact on our everyday lives and changing for the better the way we live. Communities are better able to make use of on-line educational and entertainment tools available. But there is still much work to be done and we want to work with the public sector and other organisations to find solutions to improve broadband speeds for communities in even the most challenging locations. n

*Superfast Broadband and BT’s wider economic impact in the UK -Social Study 2012 report are both available online at http://www.btsocialstudy.co.uk *These are the top wholesale speeds available from Openreach to all service providers; speeds offered by service providers may vary.

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communication & transport

overview

Quick off the mark A major reason why Newcastle and, shortly other parts of the North East, is getting faster broadband is simple. The enthusiasm for it was there The eagerness of Newcastle firms to be up front in broadband advances has been rewarded. A superfast 4G mobile service, a multi-million pound investment for the North East, was introduced to the city in December and will spread through the region. And 4GEE to follow will offer Newcastle businesses and residents mobile speeds typically five times faster than 3G, as well as new Fibre Broadband services. Newcastle was picked as part of a second wave of cities to benefit from the new superfast mobile technology and is first in the North East to get 4G. Research beforehand had shown Newcastle to be where the highest proportion of businesses indicated that they will introduce 4G when available (85%). And 89% of local businesses now expect they will be enabled to increase mobile working. EE (Everything, Everywhere) which did the installing is the first company in the UK to provide 4G mobile services, as well as Fibre Broadband. It runs the

Orange and T-Mobile brands in the UK, as too the new superfast 4G EE brand. Altogether, EE is investing £3.2m in its network in Newcastle, with all five Orange and T-Mobile outlets undergoing full refurbishments to become EE stores, offering services from Orange, T-Mobile and EE. The spread across the North during 2013 could benefit people in rural areas currently underserved by broadband. Mick Wilson, EE’s regional manager in Newcastle, says: “Everyone from large organisations and SMEs to householders is set to benefit.” An early convert is Alan Foster, who runs Design 365, a web marketing company in Newton Aycliffe. He plans to open an additional office in Newcastle using 4G. He says: “Being able to work remotely and host video conferencing quickly and easily is a huge benefit. It could save a lot of money in unnecessary travel costs. Availability of 4G has played a big part in our decision to open a Newcastle office.” Last March some research had suggested more than 20% of all businesses in Newcastle were falling offline once a month on average through broadband failures and a lack of back-up services which, internet service provider Gradwell estimated, amounted to losses of up to £1.2m a day. EE now provides mobile and fixed line services to 27m customers and in

October became the first firm in the UK to provide 4G mobile services alongside fixed-line fibre. Its 4G will probably enter 2013 covering a third of the population, and its fibre service 50%. Its mobile service covers 99% of the population with 2G and 98% with 3G. When Culture Secretary Jeremy Hunt suggested recently that speed is more important than coverage he little knew that 57% of 1,500 small businesses were separately complaining that the “poor” quality of their internet access then was impeding their businesses. The nationwide sampling found 65% of small businesses convinced an ongoing rural/urban internet divide deprives many rural firms of new business opportunities on the internet. And 65% believe that if the Government continues to rate speed over coverage many rural businesses will suffer. But a fairer coverage should emerge now. Cornwall for some time had been the only council rolling out superfast broadband, but funding bids are now being prepared to bring the final 10% of rural Northumberland into superfast broadband range. Berwick and other towns will benefit in the coming year. Durham County is sharing procurement with Gateshead, Sunderland and five Tees Valley councils. The 4G generation is supposed to deliver services four to 10 times faster than 3G. But actual speed will depend on where you are

bq-magazine.co.uk overview

communication & transport

working, how many others round about are using the service, and other factors. Independent tests have shown a 4G variation of 8 to 20Mbps (megabytes per second), but sometimes topping more than 50Mbps. Ofcom says average UK broadband speed is now 9Mbps, driven by the move to new “superfast” services. But Mark Wynn, managing director of satellite broadband provider Avonline, thinks averages are increasing because the digitally well off are becoming even better off, through top-end increases.

“Meanwhile the digitally excluded get left further behind. Ofcom’s report concedes that in rural areas the average download speed is just 3.5Mbps,” he says. Sunderland meanwhile has plugged into a major network of cities, universities, and venture capital networks through £300,000 of funding from technology giant Cisco UK. The money is linking Sunderland into a national virtual incubator, a virtual technology network to stimulate entrepreneurship – start-ups and SMEs particularly - by connecting physical sites

...and after SMS, what? It’s 20 years since the first SMS was sent over Vodafone UK’s network. The messaging service has taken the world by storm since. Offered free at first to early mobile phone carriers who were oblivious to its potential, it is now prompting a question: What next? Trevor Connell, managing director of Siemens Enterprise Communications marvels: “In the midst of all the advances in telecommunication technologies that we have seen in the last 40 years, it has been the one that offers the least personalised service that has caught on so fast. Having the sender’s face appear next to the SMS message received has, after all, only been advanced in the last six years. ”Advancements in mobile in these last six years have had similarly large impacts. MMS (multimedia messaging service) and mobile internet in the form of 3G in particular have gone beyond simple text. Another advancement that has generated much discussion during this time is video conferencing and videotelephony. “These technologies were being demonstrated back in the 1960s but have yet to become as ubiquitous as SMS, though they are being more commonly used now. However, they require you to make an appointment, whereas phone calls and texts from a mobile are ad-hoc more often than not, which has made them so successful. But Connell points out: “Today’s work colleague or family member can be many miles away - rich multi-media technology, including video, seems set to bridge that gap and offer a personal approach, in a way a simple SMS cannot. With all this wizardry, can desk phones survive the infiltration into offices of tablets and smartphones. Virgin Media Business reckons almost two thirds of senior IT executives believe desk telephones the likeliest office technology to become obsolete within five years. However, Russell Lux, commercial director of services provider Teliqo believes: “Businesses will still rely on desk phone services to present a consistent and professional corporate identity to clients, and to protect employee privacy, by displaying only ‘company’ numbers rather than private contact details from a personal mobile device,” he said.

through IT infrastructure. Chancellor George Osborne has committed to making the world’s fastest digital speeds – ultrafast - available in UK cities, with £100m invested in 10 initially. Ultrafast reportedly gives a minimum download speed of about 80Mbps. Superfast is 24 Mbps. Basic broadband, which the Government aims as absolute minimum, is 2Mbps. UK K3 Managed Services, a leading supplier of Microsoft-based business solutions for the supply chain, warns that many UK companies are wasting thousands of pounds by not streamlining their IT. Half of them waste money adding more to their IT systems than necessary, UK K3 suggests. For many users the issue now is whether to opt for Cloud computing. You pay only for what you need and expensive thresholds are eliminated. Moving to Cloud, for which 4G is eminently suitable, means some or all of a company’s data applications are stored remotely in a giant network of data centres to be shot back via internet. Firms can buy extra storage and applications and access services from anywhere. It outsources the complexity, leaving an organisation free to get on with core business. But, Greenpeace warns, it doesn’t stop the rise in total energy demand. Cloud, if it was a country, would now have the world’s fifth largest consumption of electricity. It certainly pleases contact centres, though, which report cost benefits and better opportunities to innovate while in contact with customers. n

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overview

Admirable but tested Nowhere in the UK, it seems widely agreed, will you find better service at a port or airport. But the honour doesn’t come easily, as Brian Nicholls records The most admired airport and seaport are both in the North East, apparently. Port of Tyne was named the UK’s best port of call during industry awards in 2011 and Newcastle Airport, for the fourth year running, has been named the UK’s best by the British Air Transport Association for its standards of service to passengers and airline customers. Both port and airport are thriving, though the airport would prosper more without the Government’s air passenger duty. This is imposed on airlines purportedly to reduce carbon emissions although everyone knows road traffic is a worse offender. The fatuous duty, a revenue raiser for the Government, mops up the airport’s entire turnover almost, impoverishing many airports besides this one at a level more than 8.5 times the European average – and without giving the nation, in return, a central airport fit for purpose to feed into. Port of Tyne has been delivering its best volumes ever and its best financial performance on the back of major investment. It is estimated now to contribute £500m to the regional economy, and to support 10,000 jobs directly and indirectly. Its £13.7m jump in revenue, taking it to £59.2m has enabled it to shoot up 26 places to 103 in the North East list of Top 200 Companies. It is expected to announce a third year running of record results.

Both North East airports urgently need to see the crisis of London’s inadequate hub provision rapidly solved Success stems partly from record business in car shipments. Its combined car volumes through three car terminals nears 700,000 now, making it the UK’s number one port for car exporting, and number five in Europe. Coal and wood trade is a big earner, and tourism brings now about 80,000 cruise passengers – up 80% in a year – contributing maybe £45m to the regional economy. Include the ferry passengers between North Shields

and Amsterdam, and the figure nears 600,000. A new terminal now deals with cargo pertaining to the Far East, Scandinavia and the Baltic Region. Liverpool is chiselling hard to prise away many cruise passengers who presently visit the Tyne, and sustaining resistance will be one of the North East port’s biggest challenges of 2013. Successful though it is, Port of Tyne remains second to Teesport in income, its ascendant £113.4m taking it to 57th place in the latest North East Top 200. PD Ports, owner of Teesport, is playing a big part in - and rightly deriving benefit from - Teesside’s steel revival, embodied in SSI UK’s rescue of Redcar’s massive plant. Within five months of its restart, 1m tonnes of steel slab had been sent abroad via Teesport. Teesport, one of the UK’s top three ports, has grown in logistics stature, the nation’s green policies now guiding more goods in and out of there from abroad, rather than handlings in the South of England with roadhauls up and down the country, exhaust fumes and all. Major retailers Asda and Tesco have set up large logistics and distributive operations within Teesport, and Teesport’s importance as a distribution point for the North East, North West and Southern Scotland will grow. Newcastle Airport handles between 4.5m and 6m passengers a year,

bq-magazine.co.uk overview

communication & transport

While the North East has had less than its fair share of the UK’s infrastructure spend of late it can now expect a new road bridge across the Wear at Sunderland

supports 3,200 jobs on site and perhaps 4,600 more across the region. Its export business is worth £173.6m, of which a staggering £150m is aboard aircrafts of Emirates airline. The airline serves particularly the automotives, pharmaceutical and energy industries. The decision by Emirates to use Newcastle daily has had a remarkable effect on the North East’s export business, and it has paid off for the airline too. From September Emirates introduced daily to Newcastle one of the world’s largest airliners, a Boeing 777. It has 428 seats compared with 278 seats on the Airbuses that were used previously, and has almost double the freight capacity. Emirates opens doors not only to Dubai but also Bangkok, Sydney, Perth, Beijing, Hong Kong, Tokyo and Mauritius. Performances of the airport partly owned by seven local authorities has been less impressive at boardroom level, as a High Court hearing verified recently when it criticised a refinancing deal that cost millions unnecessarily. The mismanagement that unfolded

was staggering. A former stakeholder, Copenhagen Airports, also drew fire but was no longer by then associated. It has since proved possible to cover £100m of debt by having AMP Capital take a 49% stake made available through Copenhagen’s departure. Taxpayers were still expected to shoulder a £68m burden via six of the seven local authorities – all but North Tyneside having agreed a debt restructure. But a further £68m investment committed is expected to reduce debt and support long term growth and development. Services to and from France are being ended but life goes on and a new link with Copenhagen begins on February 4. Boardroom challenges at Durham Tees Valley Airport near Darlington are quite different: how to get a once flourishing airport profitable again? In 2006 more than 900,000 passengers used it. In 2010 the figure plumbed a 35-year low, and in 2011 the figure was down to 192,410, a mere 527 passengers a day. Uncertainties had grown last year when a £1.6m loss

prompted previous owners Peel Airports to sell out. Fortunately, Peel Investments (DTVA) - a wholly owned subsidiary of Peel Group – bought in and now holds a 75% stake. The six local authorities hold the remaining 25%. Durham Tees Valley Airport, which some believe would do better by reverting to its original name of Teesside Airport (albeit Durham County Council is a shareholder) is now getting new capital injections from Peel Investments and all the local authorities holding a financial stake. Owner Peel Holdings has been trying to turn fortunes round with a six figure marketing campaign and a six figure Regional Growth Fund bid that may yet be successful. A survey that BQ detailed at the time showed most regional airports handling fewer passengers, some having lost even bigger percentages than Teesside. Because actual numbers were fewer there, the loss was more acutely felt. Traffic collapse there escalated when British Midland, which had linked Teesside and London for 40 years, abandoned its daily services in 2009;

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communication & transport Lufthansa had bought it and, as per the current sad situation, the German airline seemed keener on gaining Heathrow landing slots than sustaining another nation’s lossmaking internal service. No other airline stepped in. This year IAG – British Airways and Iberia – got permission to purchase what in effect was the British Midland subsidiary from Lufthansa. Having rejected Teesside overtures before, there seems little prospect BA would restore a London link now. But KLM has used Teesside extensively since 1974, regarding it as an important feeder into its international hub of Amsterdam, providing revenues that would otherwise go to other airlines using London airports. It proves daily that Teesside serves a purpose. Efforts are being made to lease hangar space and develop space near the runway. The terminal is also being spruced up and a controversial £6 a head levy on passengers directly – to try stemming losses – may be rescinded as public relations are built up within the airport’s core area. The best prospect for the airport’s future, the development of a freight centre creating perhaps 1,500 jobs, has arisen with news that the Chancellor George Osborne is financing another round of the Regional Growth Fund. A bid airport bosses made for £5.9m last October was rejected. The terminal, which would take 10 years to complete, is being seen as the airport’s lifeline in the wake of falling passenger numbers. A new RGF round of bids is expected to be considered in March, and plans for the freight facility are expected to be refined. A freight terminal had been proposed before the crisis but was defeated by, among other things, Nimby objections from villagers nearby. Such a development would

not be to the exclusion of passenger services as the now disbanded regional development agency One North East once suggested. Both North East airports urgently need to see the crisis of London’s inadequate hub provision rapidly solved. Already £3.6bn of North East exports rely on air travel, 96% via a hub airport, and greater back-up will be needed in future. Consensus in our region seems to prefer the option of a third runway at Heathrow – faster and cheaper to bring about, albeit with a displacement of homes. Meanwhile stronger bonds with Scandinavia beckon. Regular flights between Newcastle and Copenhagen start on February 4. Eastern Airlines recently stepped up services between

overview

Newcastle and Norway, and a restored ferry between the same two points, an ambition at both ends, would largely recover trade lost when the service ceased in 2008. Port of Tyne and Teesport, both investing heavily over the past decade, aim to grow business through renewable and offshore energies. Other North East ports, such as Seaham and Hartlepool, are doing nicely too. Blyth is well experienced now in handling turbine components and hosts a growing renewables cluster. Port of Sunderland, breathing better under the city’s current master plan, is fancied to revive its trade further with the possibility of being asked to handle some of the new car models shortly to be exported by Nissan. n

Benefits are evident While the North East has had less than its fair share of the UK’s infrastructure spend of late, it has benefited from the £260m enlargement of the sub-Tyne road tunnel – and can now look forward to both a new road bridge crossing the Wear at Sunderland, and a motorway that will stretch from Newcastle to London. More than half of the businesses that researchers of Newcastle University spoke to in a survey about the tunnel said they had gained financially. More than 70% said the double route through completed a year ago had cut their transport costs. As a single tunnel it had been considered the UK’s fourth worst traffic congestion blackspot. Nearly 71% of businesses thought reduced travel time to work now had improved employee morale, punctuality and productivity, while 68.2% said travel time reliability had a positive impact on their company. Councillor Paul Wood, chairman of the Tyne & Wear Integrated Transport Authority, says: “The single tunnel became a major barrier to business and economic development along the A19 corridor in Tyne & Wear. I am confident that benefits felt now will continue to multiply.” North Tyneside Council is promoting the adjacent Tyne Tunnel Trading Estate with encouraging results. Now businesses in Sunderland look forward to a pick-me-up when the city centre gets its new road crossing over the river. The 180m high bridge, England’s tallest, will bring the north and south sides of Sunderland closer for road travel, and give easier access to the city centre and key regeneration sites along the Sunderland Strategic Transport Corridor. It will benefit particularly the industrial areas of Washington suburb. The 336m long bridge, which the Government agreed to support in the run-up to Christmas 2011, will link Castletown on the north side with Pallion on the south.

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communication & transport company profile

Opening up the A19 strategic corridor with Two Tyne Tunnels It’s not often that a road is described as ‘life changing’. However, this is exactly the phrase used by North East motorists for the new, improved, award-winning Tyne Tunnels, which have transformed opportunities for businesses on Tyneside. The potential benefits of the tunnels are only just beginning to be realised The £260M New Tyne Crossing was realised in November 2011, when a second vehicular Tyne Tunnel opened. The project, delivered by Concessionaire TT2 Limited, involved construction of the new vehicle tunnel and a major overhaul of the original, 1967-built tunnel, as well as new road junctions either side of the Tyne. Upon completion, traffic jams disappeared instantly at what had been the fourth most congested route in the country. A year later, traffic volumes have grown by more than 20%, and yet the tunnels remain free flowing, even during peak hours. Rachel Turnbull, CEO at TT2, is delighted with the benefits the tunnels are bringing to the region. “The reliability of the Tyne Tunnels has seen thousands of commuters change their daily habits,” she explains. “The tunnels provide a dependable route into the booming industries along the A19 strategic corridor. Local businesses have experienced an average 70% reduction in their journey times since both tunnels came into use, which has transformed productivity and market opportunity.” During 2012 approximately 3120 hours are estimated to have been saved every week day by Tyne and Wear businesses using the Tyne Tunnels. The benefits of such time savings to

Rachel Turnbull, TT2’s CEO, watches progress at the Tyne Tunnels, which have opened up business and tourism opportunities since both tunnels came into use in November 2011. the North East economy are profound. Rachel, who started out as Financial Controller at TT2 in 2007, is a Chartered Accountant with wide ranging industrial experience. She is determined to see the Tyne Tunnels continue to play a key role in the economic growth of the region. “To maximise the potential opportunities for A19 industries into the future, the Highways Agency will upgrade the Silverlink junction north of the Tyne Tunnels from 2015, and it’s hoped that funding can be found to improve Testos to the south. “With advantageous links to the region’s busiest airport, and direct links

into the vibrant east coast seaports, the A19 looks set to become the main artery of the North East. With the Tyne Tunnels at its heart, the route is guaranteed to keep flowing.” n

TT2, Tyne Tunnels 2, Wallsend, Tyne & Wear, NE28 0PD tel: 0191 262 4451 fax: 0191 259 8193 email: tt2limited@tt2.co.uk www.tt2.co.uk

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whoâ&#x20AC;&#x2122;s who Silvie Adams

Dame Margaret Barbour

Hospital Director main Business: Hospital

Chairman main Business: manufacturer of Casual Clothing

Spire Washington Hospital, Picktree Lane, Rickleton, Washington, NE38 9JZ 0191 415 1272 info@spirewashington.com www.spirewashington.com

J Barbour & Sons Ltd, Simonside, South Shields, Tyne & Wear, NE34 9PD 0191 455 4444 info@barbour.com www.barbour.com

John Anderson CBE

Guy Berruyer

Chairman main Business: Business space and Consultancy services

Chief exeCutive main Business: Business software and solutions

North East Business and Innovation Centre (BIC), Wearfield, Enterprise Park East, Sunderland, SR5 2TA 0191 516 6200 john.anderson@bicne.co.uk www.ne-bic.co.uk

The Sage Group plc, North Park, Newcastle upon Tyne, NE13 9AA 0191 294 3000 www.sage.com

Sandy Anderson

Dr Joanna Berry

Chairman main Business: Public and private sector Local enterprise Partnership for Tees Valley

Director of engagement main Business: education Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne, NE1 4SE 0191 208 1500 joanna.berry@ncl.ac.uk www.ncl.ac.uk/nubs

Tees Valley Unlimited, Cavendish House, Teesdale Business Park, Stockton on Tees, Tees Valley, TS17 6QY 01642 524 400 www.teesvalleyunlimited.gov.uk

David Armstrong

Richard Blackett

Director main Business: commercial management consultancy

Director main Business: independent Financial advisers

Armstrong Consultancy Services (ACSL) Ltd, Wellington House, Westminster Business Centre, Wynyard Business Park, Wynyard, Teesside, TS22 5TB +44(0) 1740 665 010 / +44(0) 793 902 8044 dave@armstrongcsl.co.uk www.armstrongcsl.co.uk

Blackett Walker Ltd, Gosforth Park Avenue, Newcastle upon Tyne, NE12 8EG 0191 653 1025 richard.blackett@blackett-walker.co.uk www.blackett-walker.co.uk

bq-magazine.co.uk

who’s who Jonathan Blair

Sean Bullick

Managing Partner Main Business: Law Firm

Chief exeCutive main Business: Business improvement District Company

Dickinson Dees LLP, St. Ann’s Wharf, 112 Quayside, Newcastle upon Tyne, NE1 3DX 0844 984 1500 law@dickinson-dees.com www.dickinson-dees.com

Newcastle NE1 Ltd, Suite D3a, Milburn House, Dean Street, Newcastle upon Tyne, NE1 1LE 0191 235 7094 sean.bullick@newcastlene1ltd.com www.newcastlene1ltd.com

Shawn Bone

Lesley Callaghan

Partner main Business: Corporate Finance

Director main Business: marketing & Pr consultancy, sports marketing & consultancy , event management

BTG Corporate Finance, 2 Collingwood Street, Newcastle upon Tyne, NE1 1JF 0191 269 9898 shawn.bone@btg-corporatefinance.com www.btg-corporatefinance.com

Callaghan Marketing, E-volve Centre, Rainton Bridge Business Park, Houghton le Spring, County Durham DH4 5QY 0191 305 5090 lesley.callaghan@callaghanmarketing.com www.callaghanmarketing.com

Gary Boon

Stephen Carmichael

MANAGING DIRECTOR MAIN BUSINESS: Mobile development, web and online marketing

Relationship DiRectoR main Business: provides corporate Banking services to trading businesses between £25m and £50m turnover

Shout Digital, Keel House, Garth Heads, Newcastle upon Tyne, NE1 2JE 0191 231 2377 gary@shoutdigital.com www.shoutdigital.com

Santander UK, Tyne & Wear Corporate Banking Centre, Level 9, Baltic Place, Gateshead, Tyne & Wear, NE8 3AE 07808 397625 Stephen.carmichael@santander.co.uk www.santander.co.uk

Mick Brophy

Stephen Catchpole

Managing Director of Business, innovation anD DevelopMent Main Business: education and training

Managing Director Main Business: Public and private sector Local enterprise Partnership for tees Valley

Gateshead College, Quarryfield Road, Baltic Business Quarter, Gateshead, NE8 3BE 0191 490 2201 mick.brophy@gateshead.ac.uk www.gateshead.ac.uk

Tees Valley Unlimited, Cavendish House, Teesdale Business Park, Stockton on Tees, Tees Valley, TS17 6QY 01642 524 400 www.teesvalleyunlimited.gov.uk

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whoâ&#x20AC;&#x2122;s who Dennis Clark

John Craggs

Chairman main Business: engineering, Procurement & Construction (ePC)

DEPUTY CHIEF EXECUTIVE maIn BUsInEss: Gentoo Group Gentoo Group, Emperor House, 2 Emperor Way, Doxford International Business Park, Sunderland, SR3 3XR 0191 525 5000 john.craggs@gentoogroup.com www.gentoogroup.com

OGN Group, OGN House, Amec Way, Wallsend, Tyne & Wear, NE28 6HL 0191 295 870 dennis.clark@ogn-group.com www.ogn-group.com

Nicki Clark

John Dance

Chief Operating OffiCer main Business: Business improvement, supply Chain Development, events & publishing

Chief investment OffiCer and CeO main Business: investment management Vertus Asset Management, Collingwood Buildings, 38 Collingwood Street, Newcastle Upon Tyne, NE1 1JF 0191 640 8061 johnd@vertusam.co.uk www.vertusassetmanagement.co.uk

BE Group, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT 0191 426 6179 nicki.clark@be-group.co.uk www.be-group.co.uk

Linda Conlon

Mark Davis

Chief exeCutive main Business: Public engagement in science and the support of world class science in the region

GROUP COMMERICAL DIRECTOR MAIn BUsInEss: Gentoo Group Gentoo Group, Emperor House, 2 Emperor Way, Doxford International Business Park, Sunderland, SR3 3XR 0191 525 5000 mark.davis@gentoogroup.com www.gentoogroup.com

Centre for Life, Times Square, Newcastle upon Tyne, NE1 4EP 0191 243 8200 linda.conlon@life.org.uk www.life.org.uk

David Coppock

Glyn Davison

Regional DiRectoR, UK tRaDe & investment main BUsiness: UK government

Managing Director Main Business: accounts, tax and Business advisory

UK Trade & Investment, Moongate House, 5th Avenue Business Park, Team Valley, Gateshead, NE11 0HF 0191 497 8575 david.coppock@ukti.gsi.gov.uk www.ukti.gov.uk

Harlands Accountants LLP, Prospect House, Prospect Business Park, Leadgate, Consett, Co Durham, DH8 7PW 01207 581 717 glyn.davison@harland.co.uk www.harland.co.uk

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whoâ&#x20AC;&#x2122;s who Pat Dellow

Samantha Doyle

AreA CommerCiAl DireCtor mAin Business: Commercial Banking

AreA SAleS MAnAger - nUFC/Tyne & WeAr MUSeUMS MAin BUSineSS: Conference & Banqueting Venues

HSBC Bank plc, Maingate, Kingsway North, Team Valley Trading Estate, Gateshead, NE11 0BE 07767 006 679 patdellow@hsbc.co.uk www.hsbc.com

Sodexo Prestige, NUFC, St. James Park, Newcastle upon Tyne, NE1 4ST 0191 201 8525 samantha.doyle@sodexo.com www.nufc.co.uk www.twmuseums.co.uk

Graeme Dentith

Saskia Droz

PrinciPal dentist main Business: cosmetic & Family dentistry

General ManaGer Main Business: Hotel

Durham City Smiles, The Crossgate Centre, Durham City, DH1 4HF 0191 384 4447 info@durhamcitysmiles.co.uk www.durhamcitysmiles.co.uk

Hotel du Vin & Bistro Newcastle, Allan House, City Road, Newcastle Upon Tyne, NE1 2BE 0191 229 2200 reception.newcastle@hotelduvin.com www.hotelduvin.com

John Dickson

David Dunn

Group Chairman main Business: Civil engineering Construction Contractor

Chief Operating OffiCer main Business: Driving and supporting the growth of the north east software industry

Owen Pugh Group, Dudley, Cramlington, Northumberland, NE23 7PR 0191 250 0315 enquires@owenpugh.com www.owenpugh.com

Sunderland Software City, eVolve Business Centre, Rainton Bridge, Tyne and Wear, DH4 5QY 0845 872 8575 david.dunn@sunderlandsoftwarecity.com www.sunderlandsoftwarecity.com

Chris Dixon

Linda Edworthy

Manager - Corporate Business Main Business: relationship Banking for small and medium sized businesses and professionals

Director of Policy anD Strategy main BuSineSS: Public and private sector local enterprise Partnership for tees Valley

Allied Irish Bank (GB), 9-17 Collingwood Street, Newcastle upon Tyne, NE1 1HE 0191 230 3000 christopher.j.dixon@aib.ie www.aibgb.co.uk

Tees Valley Unlimited, Cavendish House, Teesdale Business Park, Stockton on Tees, Tees Valley, TS17 6QY 01642 524 400 www.teesvalleyunlimited.gov.uk

bq-magazine.co.uk

who’s who Catherine Ellington

Mark Fahy

Regional Managing DiRectoR Main Business: commercial Radio stations

Head of UK Small & mid-Cap CompanieS main BUSineSS: financial Services

Metro Radio, 55 Degrees North, Pilgrim Street, Newcastle, NE1 6BF 0191 230 6100 cath.ellington@bauermedia.co.uk www.tfmradio.com/www.metroradio.co.uk www.cfmradio.com

London Stock Exchange plc, 10 Paternoster Square, London, EC4M 7LS 07795 257 517 mfahy@londonstockexchange.com www.londonstockexchange.com

Anne Elliott

Alan Fletcher

Solicitor & Marketing Partner Main BuSineSS: legal Services

Managing Partner Main Business: Law firm/professional services

Latimer Hinks Solicitors, 5-8 Priestgate, Darlington, DL1 1NL 01325 341 500 aee@latimerhinks.co.uk www.latimerhinks.co.uk

Square One Law LLP, Anson House, The Fleming Business Centre, Burdon Terrace, Jesmond, NE2 3AE 0843 224 7900 alan.fletcher@squareonelaw.com www.squareonelaw.com

Dominic Elsworth

Andrew Fletcher

Patent attorney, Head of Practice main Business: intellectual property law

General ManaGer Main Business: Hotel

Hargreaves Elsworth, Cooper’s Studios, 14-18 Westgate Road, Newcastle-upon-Tyne, NE1 3NN 0191 269 5477 office@heip.co.uk www.heip.co.uk

Newcastle Marriott Hotel Gosforth Park, High Gosforth Park, Newcastle upon Tyne, NE3 5HN 0191 236 4111 Andrew.fletcher@marriotthotels.com www.NewcastleMarriottGosforthPark.com

Tim Evans

Sharon Fletcher - Howey

PARTNER MAIN BUSINESS: Leading Real Estate Consultants

Head of Corporate SaleS main BuSineSS: premier league football Club

Knight Frank, St Ann’s Quay, 118 Quayside, Newcastle upon Tyne, NE1 3BB 0191 221 2211 tim.evans@knightfrank.com www.knightfrank.co.uk

Newcastle United Football Club, St James’ Park, Newcastle upon Tyne, NE1 4ST 0844 372 1892 sharon.fletcher@nufc.co.uk www.nufc.co.uk

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whoâ&#x20AC;&#x2122;s who Geoff Ford MBE

Neville Gaukroger

ChairMaN MaiN BusiNess: Precision machining and pressing of components and assemblies for a range of industries

Strategic Development Director main BuSineSS: motor retailer Benfield Motor Group, Asama Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YD 0191 2981400 neville.gaukroger@benfieldmotorgroup.com www.drivebenfield.com

Ford Aerospace Limited & Ford Component Manufacturing Limited, East Side, Tyne Dock, South Shields, Tyne & Wear, NE33 5ST 0191 454 0141 geoff.ford@ford-aerospace.com www.ford-aerospace.com

Brian Foreman

Ian Gilthorpe

Corporate DireCtor main Business: Corporate Banking

SENIOR PARTNER MAIN BUSINESS: Law Firm/Professional Services

Barclays, 71 Grey Street, Newcastle upon Tyne, NE99 1JP 07500 891071 brian.foreman@barclays.com www.barclays.com/corporatebanking

Square One Law LLP, Anson House, The Fleming Business Centre, Burdon Terrace, Jesmond, Newcastle upon Tyne, NE2 3AE 0843 224 7900 ian.gilthorpe@squareonelaw.com www.squareonelaw.com

David Foster

Jonathan Gold

Managing Director Main Business: asset and Motor Vehicle Finance

Director main Business: Venture capital : ne angel Fund

Anglo Scottish Asset Finance Ltd, Unit 2 Lumley Court, Drum Industrial Estate, Chester Le Street, Durham, DH2 1AN 0845 1111 070 david@angloscottishfinance.co.uk www.angloscottishfinance.co.uk

Rivers Capital Partners, 2 Collingwood Street, Newcastle upon Tyne, NE1 1JF 0191 230 6370 info@riverscap.com www.riverscap.com

Andy Foulds

Tim Goodill

CommerCial DireCtor main Business: airport/aviation

Creative DireCtor main Business: advertising and media Production

Durham Tees Valley Airport, Darlington, Tees Valley, DL2 1LU 01325 331 003 afoulds@dtva.co.uk www.dtva.co.uk

Northern Design Centre, Abbots Hill, Baltic Business Quarter, Gateshead, NE8 3DF 0191 499 8351 info@aliusmedia.co.uk www.aliusmedia.co.uk

bq-magazine.co.uk

whoâ&#x20AC;&#x2122;s who Alan Gowling

Sarah Hall

Director - tyne anD Wear main Business: Business Banking

Managing Director Main Business: Pr and Marketing

Natwest, 1 Trinity Gardens, 2nd Floor, Broadchare, Quayside, Newcastle upon Tyne, NE1 2HF 07788 567 340 alan.gowling@rbs.co.uk www.natwest.com/ahead

Sarah Hall Consulting, 11 Arcot Avenue, Whitley Bay, Tyne & Wear, NE25 9DX 07702 162 704 / 0191 289 5834 sarah@sarahhallconsulting.co.uk www.sarahhallconsulting.co.uk

Martin Greenwood

Derrick Halliwell

Director main Business: corporate Banking

Group ManaGinG Director Main Business: security solutions, systems and services

Royal Bank of Scotland, 31 Grey Street, Newcastle Upon Tyne, NE1 6ES 07770 823 671 martin.greenwood@rbs.co.uk www.rbs.co.uk

The Protector Group Limited, Protector House, Station Approach, Team Valley Trading Estate, Gateshead, NE11 0ZF 0800 316 1144 derrick.halliwell@protectorsecurity.co.uk protectorsecurity.co.uk

Alasdair Greig

Prof Cliff Hardcastle

Director main Business: Venture capital

DEPUTY VICE CHANCELLOR (RESEARCH & BUSINESS ENGAGEMENT) MAIN BUSINESS: Higher education, research and business engagement

Northstar Ventures, 5th Floor, Maybrook House, 27-35 Grainger Street, Newcastle upon Tyne, NE1 5JE 0191 229 2770 Alasdair.greig@northstarventures.co.uk www.northstarventures.co.uk

Teesside University, Middlesbrough, TS1 3BA 01642 342 008 c.hardcastle@tees.ac.uk www.tees.ac.uk

Farooq Hakim

Prof Graham Henderson CBE DL

BT Regional DiRecToR, noRTh easT main Business: communications

Vice-chancellor & chief executiVe main Business: higher education

BT, pp 3.14, 1 Harton Quay, South Shields, NE33 1JN 077101 05730 Farooq.hakim@bt.com www.btplc.com

Teesside University, Middlesbrough, TS1 3BA 01642 342 002 graham.henderson@tees.ac.uk www.tees.ac.uk

bq-magazine.co.uk

whoâ&#x20AC;&#x2122;s who Dr Colin Herron

Gary Hutchinson

Managing Director Main Business: Low carbon Vehicles/automotive

CommerCial DireCtor main Business: Football, Conference and events Venue

Zero Carbon Futures, Skills Academy for Sustainable Manufacturing and Innovation, Washington Road, Sunderland, SR5 3HE 0191 490 2382 colin.herron@gateshead.ac.uk www.zerocarbonfutures.co.uk

Sunderland Association Football Club Stadium of Light, Sunderland, SR5 1SU 0871 911 1261 gary.hutchinson@safc.com www.safc.com

Jason Hopper

Craig Iley

Director main Business: Branding, Design, Digital, strategic marketing

Regional DiRectoR main Business: corporate Banking Santander, Baltic Quays, South Shore Rd, Gateshead, Tyne & Wear, NE8 3AE 0551 147 7310 craig.iley@santander.co.uk www.santander.co.uk

Surreal Creative, E-volve Business Centre, Cygnet Way, Rainton Bridge Business Park, DH4 5QY 0191 3055068 jason@surrealcreative.com www.surrealcreative.com

Matthew Hunt

Anne Isherwood

Port Director main Business: Port and marine services

PrinciPal/chief executive main Business: education

Port of Sunderland, Capstan House, Greenwells Quay, South Docks, Sunderland, SR1 2BU 0191 553 2131 matthew.hunt@sunderland.gov.uk www.MAKEitSunderland.com

Sunderland College, Shiney Row Campus, Houghton-le-Spring, DH4 4TL 0191 511 6001 anne.isherwood@sunderlandcollege.ac.uk www.sunderlandcollege.ac.uk

Louise Hunter

Martin Johnson

Corporate affairs DireCtor main Business: Water and Waste Water treatment

Partner main Business: accountancy, tax and business advice

Northumbrian Water, Boldon House, Wheatlands Way, Pity Me, Durham, DH1 1FA 0191 301 6679 louise.hunter@nwl.co.uk www.nwl.co.uk

UHY Torgersens, Somerford Buildings, Norfolk Street, Sunderland, Tyne and Wear, SR1 1EE 0191 567 8611 m.johnson@uhy-torgersens.com www.uhy-uk.com

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whoâ&#x20AC;&#x2122;s who Simon Johnson

Joanne Leng MBE

Senior inveStment executive main BuSineSS: Fund management

Deputy Chief exeCutive main Business: Building a supply chain community for the energy sector

NEL Fund Managers Limited, City Quadrant, 11 Waterloo Square, Newcastle Upon Tyne, NE1 4DP 0845 111 1850 enquiries@nel.co.uk www.nel.co.uk

1st Floor, Thames House, Mandale Business Park, Belmont Industrial Estate Durham, DH1 1TH 0191 384 6464 jleng@nofenergy.co.uk www.nofenergy.co.uk

Neil Kenley

Glenn Levison

Director of Business investment main Business: Public and private sector Local enterprise Partnership for tees valley

CHARTERED SuRvEyoR mAin BuSinESS: Property Auctions Pugh & Company,117 The Headrow, Leeds, LS1 5JW 07815 610 804 Glenn@pugh-auctions.com www.pugh-auctions.com

Tees Valley Unlimited, Cavendish House, Teesdale Business Park, Stockton on Tees, Tees Valley, TS17 6QY 01642 524 400 www.teesvalleyunlimited.gov.uk

Zara Lane

Therese Liddle

AssociAte Director mAin Business: corporate finance

Managing Director Main Business: recruitment

Grant Thornton UK LLP, 75-85 Grey Street, Newcastle upon Tyne, NE1 6EF 0191 203 7793 zara.lane@uk.gt.com www.grant-thornton.co.uk

NRG, Lloyds Court, 56 Grey Street, Newcastle upon Tyne, NE1 6AH 0191 232 1222 thereseliddle@nrgplc.com www.nrgplc.com

David Laws

Chris Lines

Chief exeCutive main Business: aviation services

Owner/DirectOr main Business: Pr, strategic communications, social media

Newcastle International Airport, Woolsington, Newcastle upon Tyne, NE13 8BZ 0191 214 3330 dlaws@newcastleinternational.co.uk www.newcastleairport.com

Right Lines Communications Ltd, The Manor House, West End, Sedgefield, County Durham, TS21 2BW 07971 868329 chris@rightlines.info www.rightlines.info

bq-magazine.co.uk

whoâ&#x20AC;&#x2122;s who Catriona Lingwood

Bill Lynn

Chief exeCutive main Business: Construction Business support

Director main Business: commercial Property consultants

Constructing Excellence in the North East, Allergate House, Belmont Business Park, Belmont, Co. Durham, DH1 1TW 0191 374 0233 Catriona@cene.org.uk www.cene.org.uk

Storeys Edward Symmons, Higham House, New Bridge Street West, Newcastle upon Tyne, NE1 8AU 0191 206 8703 bill.lynn@storeys-es.com www.storeys-es.com

Duncan Lowery

Alastair MacColl

Senior inveStment manager main BuSineSS: management of Finance for Business north east technology Fund

Chief exeCutive main Business: Business improvement, supply Chain Development, events & Publishing BE Group, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT 0191 426 6404 Alastair.MacColl@be-group.co.uk www.be-group.co.uk

IP Group plc, Floor 7, West One, Forth Banks, Newcastle upon Tyne, NE1 3PA 0845 519 4112 duncan.lowery@ipgroupplc.com www.thenortheasttechnologyfund.com

Katharine Lowthian

Grahame Maddison

PrinciPal main Business: Divorce and Family law Firm

AreA CommerCiAl DireCtor mAin Business: Commercial Banking

Lowthian Gray Family Law, 20 Portland Terrace, Jesmond, NE2 1QQ 0191 2810082 kl@lowthiangray.co.uk www.lowthiangray.co.uk

HSBC Bank plc, Tees Valley and The Dales Commercial Centre, 60 Albert Road, Middlesbrough, TS1 1RS 07717 484 075 grahamemaddison@hsbc.com www.hsbc.com

Lowthian Gray Family Law

Daryl Lynch

Brian Manning

Managing Director Main Business: subsea engineering contractor, installation and trenching services

Chief exeCutive main Business: Construction & Property services

Reef Subsea Power & Umbilical, GAC House, Sabatier Close, Thornaby, Stockton-On-Tees, TS17 6EW 01642 704 400 enquiries-pu@reefsubsea.com www.reefsubsea.com

Esh Group, Esh House, Bowburn North Industrial Estate, Bowburn, Durham, DH6 5PF 0191 377 4570 enquiries@esh.uk.com www.esh.uk.com

bq-magazine.co.uk

who’s who John Marshall

Paul McEldon

Senior Partner main BuSineSS: Law Firm

Chief exeCutive main Business: Business space and Consultancy services

Dickinson Dees LLP, St. Ann’s Wharf, 112 Quayside, Newcastle upon Tyne, NE1 3DX 0844 984 1500 law@dickinson-dees.com www.dickinson-dees.com

North East Business and Innovation Centre (BIC), Wearfield, Enterprise Park East, Sunderland, SR5 2TA 0191 516 6200 paul.mceldon@ne-bic.co.uk www.ne-offices.co.uk

Ian Massey

Joe McLean

Relationship DiRectoR main Business: education, health & communities

Partner main Business: advisory

Santander Corporate Banking, Level 9 Baltic Place, South Shore Road, Gateshead Quayside, Tyne & Wear, NE8 3AE 07809 493091 ian.massey@santander.co.uk www.santandercb.co.uk

Grant Thornton UK LLP, 75-85 Grey Street, Newcastle upon Tyne, NE1 6EF 0191 203 7790 joe.mclean@uk.gt.com www.grant-thornton.co.uk

Mike Matthews

Nigel McMinn

Managing Director & european operations officer Main Business: Manufacturing, automotive industry

Chief exeCutive main Business: motor Retailer

Nifco UK Limited, Durham Lane, Eaglescliffe, Stockton-on-Tees, TS16 0PS 01642 672 299 matthewsm@nifcoeu.com www.nifcoeu.com, www.nifco.com

Benfield Motor Group, Asama Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YD 0191 2981400 nigel.mcminn@benfieldmotorgroup.com www.drivebenfield.com

Maxine Mayhew

Craig McNaughton

Group CommerCial DireCtor main Business: Water and Waste Water treatment

AreA Director commerciAl – Ne & cumbriA mAiN busiNess: banking

Northumbrian Water, Boldon House, Wheatlands Way, Pity Me, Durham, DH1 1FA 0191 301 6679 maxine.mayhew@nwl.co.uk www.nwl.co.uk

Lloyds Banking Group, 4th Floor, 102 Grey Street, Newcastle upon Tyne, NE1 6AG 07970 586261 craig_mcnaughton@bankofscotland.co.uk www.lloydsbusiness.com

bq-magazine.co.uk

whoâ&#x20AC;&#x2122;s who Andrew Mitchell

Gerard Murray

Chief exeCutive main Business: venture Capital holding fund manager

Group Finance Director main Business: motor retailer

North East Finance, St Jamesâ&#x20AC;&#x2122; Gate, Newcastle upon Tyne, NE1 4AD 0191 211 2300 enquiries@northeastfinance.org www.northeastfinance.org

Benfield Motor Group, Asama Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YD 0191 2981400 gerard.murray@benfieldmotorgroup.com www.drivebenfield.com

Andrew Moffat

Philip Murray

Chief exeCutive OffiCer main Business: Conventional & bulk cargo, car terminals, estates, cruise & ferries, logistics

Corporate FinanCe and Business advisor main Business: accounts, tax and Business advisory Harlands Accountants LLP, Prospect House, Prospect Business Park, Leadgate, Consett, Co Durham, DH8 7PW 01207 581 717 philip.murray@harland.co.uk www.harland.co.uk

Port of Tyne, Maritime House, Tyne Dock, South Shields, Tyne & Wear, NE34 9PT 0191 455 2671 andrew.moffat@portoftyne.co.uk www.portoftyne.co.uk

Heidi Mottram

Chris Musgrave

Chief exeCutive OffiCer main Business: Water and Waste Water treatment

Chief exeCutive main Business: Commercial Property Development Company

Northumbrian Water, Boldon House, Wheatlands Way, Pity Me, Durham, DH1 1FA 0191 301 6367 heidi.mottram@nwl.co.uk www.nwl.co.uk

Wynyard Park Limited, Wynyard Park House, Wynyard Ave, Wynyard, Billingham, Cleveland, TS22 5TB 01740 661 000 enquiries@wynyardpark.com www.wynyardpark.com

Mike Mullaney

Gordon Nelson

Head of midmarkets main Business: Corporate Banking

General ManaGer Main Business: lexus Dealer

Lloyds Bank Corporate Markets, 1st Floor Black Horse House, 91 Sandyford Road, Newcastle upon Tyne, NE1 8HQ 0191 255 1558 mike.mullaney@lloydsbanking.com www.lloydstsbcorporatemarkets.co.uk

Lexus Newcastle, 22 Benton Road, Newcastle upon Tyne, NE7 7EG 0191 215 0404 gordon.nelson@jardinemotors.co.uk www.newcastle.lexus.co.uk

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whoâ&#x20AC;&#x2122;s who Paul Newbold

Bernard John Ord

Partner main Business: accountancy, tax and business advice

Chairman main Business: machine Tool Consultant & Valuer

UHY Torgersens, Somerford Buildings, Norfolk Street, Sunderland, Tyne and Wear, SR1 1EE 0191 567 8611 p.newbold@uhy-torgersens.com www.uhy-uk.com

Fairfield Industries Ltd, North Ormesby Road, Middlesbrough, TS4 2AG 01642 22 1100 bjord@fairfieldindustries.co.uk www.fairfieldindustries.co.uk

Bob Nicholson

James Pain

CHAIRMAN MAIN BUSINESS: Motor Dealer

Director main Business: commercial agents and Property consultants specialising within ne industrial market

Mill Volvo, Scotswood Road, Newcastle upon Tyne, NE15 6BZ 0191 274 8200 www.millvolvo.co.uk

Frew Pain & Partners, Collingwood Buildings, 38 Collingwood Street, Newcastle upon Tyne, NE1 1JF 0191 229 9517 / 07841 871 710 james.pain@frewpain.co.uk www.frewpain.co.uk

Joseph Olabode

Jarrett Palmer

Managing Director Main Business: it solutions & services

SITE LEADER MAIN BUSINESS: Pharmaceutical Contract Manufacturing

PCI Services Ltd, e-volve Business Centre, Rainton Bridge South Business Park, Tyne & Wear, DH4 5QY 0845 1433000 joe.olabode@pciservices.co.uk www.pciservices.co.uk

Piramal Pharma Solutions, Whalton Road, Morpeth, Northumberland, NE61 3YA 01670 562 400 jarrett.palmer@piramal.com www.piramalpharmasolutions.com

Gordon Ollivere MBE

Graham Payne

Chief exeCutive main Business: innovation & technology Consultants

Managing Director Main Business: Manufacturing and engineering for the aerospace, energy, naval and Marine Markets

RTC North, Hylton Park, Wessington Way, Sunderland, Tyne & Wear, SR5 3HD 0191 5164400 enquiries@rtcnorth.co.uk www.rtcnorth.co.uk

Darchem Engineering, Ironmasters Way, Stillington, Stockton on Tees, TS21 1LB 01740 630461 Graham.payne@esterline.com www.darchem.co.uk

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whoâ&#x20AC;&#x2122;s who Nigel J Perry FREng

Keith Proudfoot

CHIEF EXECUTIVE OFFICER MAIN BUSINESS: Product and process development

Regional DiRectoR, noRtheRn anD ScotlanD main BuSineSS: chartered accountancy membership organisation

CPI Head Office, Wilton Centre, Wilton, Redcar, TS10 4RF 01642 455 340 www.uk-cpi.com

ICAEW, PO Box 417, Newcastle upon Tyne, NE3 9AS 0191 300 0531 keith.proudfoot@icaew.com www.icaew.com/northern

Chris Petts

George Rafferty

Director main Business: advisory

Chief exeCutive main Business: Building a supply chain community for the energy sector

Grant Thornton UK LLP, 75-85 Grey Street, Newcastle upon Tyne, NE1 6EF 0191 203 7787 chris.petts@uk.gt.com www.grant-thornton.co.uk

1st Floor, Thames House, Mandale Business Park, Belmont Industrial Estate Durham, DH1 1TH 0191 384 6464 grafferty@nofenergy.co.uk www.nofenergy.co.uk

Joanne Pratt

Chris Rigg

Fund Manager Main Business: Fund manager and investment company providing growth capital to sMes

Corporate DireCtor main Business: Corporate Banking Barclays, 71 Grey Street, Newcastle upon Tyne, NE99 1JP 07881 816 032 chris.rigg@barclays.com www.barclays.com/corporatebanking

FW Capital, Cuthbert House, City Road, All Saints, Newcastle upon Tyne, NE1 2ET 0191 350 6310 joanne.pratt@fwcapital.co.uk www.fwcapital.co.uk/northeast

John Price

Pat Ritchie

SaleS Director main BuSineSS: leading provider of technology connecting the global offshore energy industry

Chief exeCutive main Business: Local authority

JDR, Maritime House, 7 Harbour Walk, Hartlepool, TS24 0UX 01429 851 890 uk@jdrcables.com www.jdrglobal.com

Newcastle City Council, Civic Centre, Barras Bridge, Newcastle upon Tyne, NE99 2BN 0191 211 5000 pat.ritchie@newcastle.gov.uk www.newcastle.gov.uk

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whoâ&#x20AC;&#x2122;s who Simon Roberson

Ralph Saelzer

Regional PaRtneRshiP DiRectoR main Business: communications

Managing Director Main Business: Manufacturer of ship and offshore cranes

BT, pp 1S BC, Bridge Court, Swingbridge House, Newcastle upon Tyne, NE1 3BA 0191 759 6258 simon.roberson@bt.com www.bt.com/btregions

Liebherr, Liebherr Sunderland Works Ltd, Ayres Quay, Deptford Terrace, Sunderland, SR4 6DD 0191 514 3001 ralph.saelzer@liebherr.com www.liebherr.com

Damon Roberts

Garry Sheriff

General ManaGer (Chairman of the North East Hotels Association) Main Business: Hotel industry, Tourism, Meetings and events

Managing Director Main Business: ict services and solutions Provider IT Professional Services Limited, Axwell House, Waterside Drive, Wellington Road, Gateshead, NE11 9HU 0191 442 8300 enquiries@it-ps.com www.it-ps.com

Thistle Hotel Middlesbrough, Fry Street, TS1 1JH 01642 232 000 damon.roberts@thistle.co.uk www.thistle.com/middlesbrough

David Robinson

David Simpson

GROUP CHIEF EXECUTIVE OFFICER MAIN BUSINESS: UK ports business with logistics operations

ExEcutivE DirEctor main BusinEss: Wealth management and Private Banking

PD Ports, 17-27 Queenâ&#x20AC;&#x2122;s Square, Middlesbrough, TS2 1AH 01642 877 200 david.robinson@pdports.co.uk www.pdports.co.uk

Coutts, 2nd Floor, 1 Trinity Gardens, Broad Chare, Quayside, Newcastle upon Tyne, NE1 2HF 0191 269 1388 david.simpson@coutts.com www.coutts.com/newcastle

Jean-Louis Rostaing

Amanda Skelton

Managing Director Main Business: subsea umbilical systems

Chief exeCutive main Business: Local Government

Duco Ltd, Nelson Road, Walker Riverside, Newcastle Upon Tyne, NE6 3NL 0191 296 7286 jlrostaing@ducoltd.com www.technip.com

Redcar & Cleveland Borough Council, Redcar & Cleveland House, Kirkleatham Street, Redcar, TS10 1RT 01642 444 003 amanda.skelton@redcar-cleveland.gov.uk www.redcar-cleveland.gov.uk/regeneration

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whoâ&#x20AC;&#x2122;s who Andrew Skelton

Mark Squires

Director main Business: sales, supply and service of office equipment

ExEcutivE chairman main BusinEss: motor retailer Benfield Motor Group, Asama Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YD 0191 2981400 mark.squires@benfieldmotorgroup.com www.drivebenfield.com

SOS Group, 356a Dukesway Court, Team Valley Trading Estate, Gateshead, Tyne & Wear, NE11 0BH 0845 230 8080 andrew.skelton@sosgroup-ltd.co.uk www.sosgroup-ltd.co.uk

Peter Slee

Phil Steele

Managing Director Main Business: ecommerce order Fulfilment and contact centre services

General ManaGer Main Business: eldon square shopping Centre Eldon Square, Centre Management Offices, Eldon Court, Percy Street, Newcastle upon Tyne, NE1 7JB 0191 261 1891 phil-steele@capshop.co.uk www.eldon-square.co.uk

Spark Response, Follingsby Park, Gateshead, Tyne and Wear, NE10 8HQ 0191 495 9999 peter.slee@sparkresponse.com www.sparkresponse.com

Alan J Smith OBE, DL

Scott Stevenson

Chairman main Business: architecture

Centre PrinCiPal main Business: Porsche Dealer

Red Box Design Group Ltd, St Nicholas Chare, Newcastle upon Tyne, NE1 1RJ 0191 245 5555 ajs@redboxdesign.com www.redboxdesign.com

Porsche Centre Newcastle, Silverlink Park, Newcastle upon Tyne, NE28 9ND 0191 2951234 / 07535 935222 scott.stevenson@porschenewcastle.co.uk www.porsche.co.uk/newcastle

NEWCASTLE

Ian P. Smith

Sarah Stewart

Managing Director Main Business: Branding, Design, Digital, strategic Marketing

Chief exeCutive main Business: Destination management and marketing agency

Surreal Creative, E-volve Business Centre, Cygnet Way, Rainton Bridge Business Park, DH4 5QY 0191 3055068 ian@surrealcreative.com www.surrealcreative.com

NewcastleGateshead Initiative, 9th Floor, Baltic Place East, South Shore Road, Gateshead, NE8 3AE 0191 440 5720 info@ngi.org.uk www.NewcastleGateshead.com

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whoâ&#x20AC;&#x2122;s who Jeff Tabb

Julian Thomson

OPERATIONS DIRECTOR MAIN BUSINESS: Motor Dealer

Director main Business: Fine art auctioneers and Valuers. Valuations for sale, probate and insurance.

Mill Volvo, Avro Close, Preston Farm Business Park, Stockton, TS18 3SG 01642 673 251 jefftabb@millvolvo.co.uk www.millvolvo.co.uk

Anderson and Garland Ltd, Anderson House, Crispin Court, Newbiggin Lane, Westerhope, Newcastle upon Tyne, NE5 1BF 0191 430 3000 j.thomson@andersonandgarland.com www.andersonandgarland.com

Eugene Taylor

Richard Thorold

Director main Business: commerical Banking newcastle and tees Valley

PrinciPal and cEO main BusinEss: Education and Training Gateshead College, Quarryfield Road, Baltic Business Quarter, Gateshead, NE8 3BE 0191 490 2201 richard.thorold@gateshead.ac.uk www.gateshead.ac.uk

NatWest, 2nd Floor 1 Trinity Gardens, Quayside, Newcastle upon Tyne, NE1 2HF 0191 269 8700 eugene.taylor@natwest.com www.natwest.com/ahead

Caroline Theobald

Dave Townsley

MD BriDge CluB ltD - Honorary Consul for Sweden,

ExEcutivE DirEctor NDi uK LtD maiN BusiNEss: specialist supply chain sourcing & development

Chairman North East Chapter of the Swedish Chamber of Commerce

Main Business: a B2B networking Company

service for the defence, space, aerospace & security sectors

Bridge Club, Aydon Castle Farm, Corbridge, NE45 5PJ 0191 406 9081 / 0797 641 4643 c.theobald@bridgeclubnorth.com www.bridgeclubltd.com

NDI, BE Group, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT 0191 426 6376 David.Townsley@ndi.org.uk www.ndi.org.uk

Ian Thompson

Rachel Turnbull

Corporate DireCtor (Regeneration & Economic Development) main Business: regeneration & economic Development

Chief exeCutive OffiCer main Business: tyne tunnel Concessionaire

Durham County Council, County Hall, Durham, DH1 5UQ 03000 267 331 ian_thompson@durham.gov.uk www.durham.gov.uk

TT2 Limited, Tyne Tunnels 2, Wallsend Tyne & Wear, NE28 0PD 0191 262 4451 r.turnbull@tt2.co.uk www.tt2.co.uk

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whoâ&#x20AC;&#x2122;s who Martin Vinsome

Joanne Warren

Chartered Patent attorney/Partner main Business: Patent and trademark attorneys

Director of tax main Business: accounts, tax and Business advisory

Urquhart-Dykes & Lord LLP, Cale Cross House, Pilgrim Street, Newcastle upon Tyne, NE1 6SU 0191 261 8573 rmv@udl.co.uk www.udl.co.uk

Harlands Accountants LLP, Prospect House, Prospect Business Park, Leadgate, Consett, Co Durham, DH8 7PW 01207 581 717 joanne.warren@harland.co.uk www.harland.co.uk

Kevin Walker

Prof Andrew Wathey

Director main Business: independent Financial advisers

Vice-chancellor & chief executiVe main Business: education

Blackett Walker Ltd, Gosforth Park Avenue, Newcastle upon Tyne, NE12 8EG 0191 653 1025 kevin.walker@blackett-walker.co.uk www.blackett-walker.co.uk

Northumbria University, Ellison Building, Ellison Place, Newcastle upon Tyne, NE1 8ST 0191 227 4002 andrew.wathey@northumbria.ac.uk www.northumbria.ac.uk

Peter Walls

Stewart Watkins

GROUP CHIEF EXECUTIVE maIn BUsInEss: Gentoo Group

Managing Director Main Business: Business support

Gentoo Group, Emperor House, 2 Emperor Way, Doxford International Business Park, Sunderland, SR3 3XR 0191 525 5000 peter.walls@gentoogroup.com www.gentoogroup.com

Business Durham, Northumbria House, Aykley Heads, Durham, DH1 5TS 03000 265 510 stewart.watkins@durham.gov.uk www.businessdurham.co.uk

Bill Ward

Clare Weirs

MANAGING DIRECTOR MAIN BUSINESS: Motor Dealer

Director Business services main Business: Building a supply chain community for the energy sector

Mill Volvo, Scotswood Road, Newcastle upon Tyne, NE15 6BZ 0191 274 8200 billward@millvolvo.co.uk www.millvolvo.co.uk

1st Floor, Thames House, Mandale Business Park, Belmont Industrial Estate Durham, DH1 1TH 0191 384 6464 cweirs@nofenergy.co.uk www.nofenergy.co.uk

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whoâ&#x20AC;&#x2122;s who Jennifer Welch

Professor John Wilson

Director, ricS North & MiDlaNDS MaiN BuSiNeSS: royal institution of chartered Surveyors

Director main Business: education

RICS North East, c/o Northumbria University, Room 116/117, 1st Floor, Ellison Building, Ellison Place, Newcastle upon Tyne, NE1 8ST 01429 835 223 jwelch@rics.org www.rics.org/northeast

Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne, NE1 4SE 0191 208 1500 john.wilson4@ncl.ac.uk www.ncl.ac.uk/nubs

Jonathan Willett

Lucy Winskell

Director main Business: commercial insurance Broker

Pro Vice-chancellor main Business: region, engagement and Partnerships

Henderson Insurance Brokers Ltd, MAP House, 3 George Stephenson Court, Westland Way, Stockton On Tees, TS18 3FB 01642 659300 jonathan.willett@hibl.co.uk www.hibl.co.uk

Northumbria University, Ellison Building, Ellison Place, Newcastle upon Tyne, NE1 8ST 0191 243 7200 lucy.winskell@northumbria.ac.uk www.northumbria.ac.uk

Ian Williams

Geoff Woodcock

Director of Business investment main Business: Business investment

Managing Director Main Business: Land and Development

Sunderland City Council, Sunderland Software Centre, Tavistock Place, Sunderland, SR1 1PB 0191 561 1507 ian.williams@sunderland.gov.uk www.MAKEitSunderland.com

Esh Developments, Esh House, Bowburn North Industrial Estate, Bowburn, Durham, DH6 5PF 0191 377 4570 enquiries@esh.uk.com www.esh.uk.com

Jill Williamson

Paul Woolston

GENERAL MANAGER MAIN BUSINESS: Horse Racing/Event & Venue Hire/ Wedding Venue

SENIOR PARTNER MAIN BUSINESS: Professional services, assurance and regulatory reporting, taxation & advisory

Sedgefield Racecourse, Sedgefield, Stockton-on-Tees, TS21 2HW 01740 621 925 jwilliamson@sedgefield-racecourse.co.uk www.sedgefield-racecourse.co.uk

PWC, 89 Sandyford Road, Newcastle upon Tyne, NE1 8HW 0191 269 4205 paul.woolston@uk.pwc.com www.pwc.co.uk/north

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money markets Cash flow concerns have been mounting just as funding for growth may be seeming elusive. But support is out there if you take a few tips. Banks, for example, are often unexpectedly finding firms that they want to support. And more than two years still remain in which to pitch for part of a ÂŁ125m pot

bq-magazine.co.uk opinion

money markets

Your key to the maze Funding is available for SMEs in the region â&#x20AC;&#x201C; but tracking it down may sometimes be quite a challenge. Geoff Hodgson though has some advice to guide small businesses through the finance maze There is undoubtedly a feeling among SMEs in our region that the environment around finance and support is complicated and finding suitable, high-quality support is an arduous task. This is borne out by research commissioned by North East Access to Finance (NEA2F), which

uncovered as many as 106 finance initiatives and 37 support interventions offered to SMEs in the region by a range of public, private and third sector organisations. We owe it to North East businesses and to the future economic prosperity of the region to provide clarity, transparency and

simplicity in sources of finance and support; opportunities for appropriate mentoring and investor readiness training and to find a way to overcome the perception among SMEs that these initiatives are â&#x20AC;&#x153;disjointedâ&#x20AC;?. As well as working to develop new sources of public investment funding

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money markets for the region’s SMEs when the current programmes end, NEA2F is committed to improving the experience of businesses and their advisers as they seek to navigate the funding and support landscape here in the North East. Our North East Access to Finance Guide, sponsored by Ward Hadaway, is now in its third year of publication and we are currently preparing the 2013 edition. No other English region has produced such a wealth of information so indispensable to the region’s businesses and their advisers. Access to up-to-date information regarding the latest sources of finance and support is crucial to businesses, and the current pace of change makes providing this information even more important to us. For this reason we have commissioned work to provide a digital version of the guide. Utilising the latest responsive technology - the guide will be available to businesses and their advisers on their mobile phones, tablets and PCs - we will ensure that up to date information is only a few clicks or swipes away. This year has seen the launch of a range of Government measures introduced to support start-ups and growing SMEs. These include a campaign to inspire people to realise their business ambitions, and to highlight the range of support available for start-ups and growing businesses, along with measures to ensure SMEs can access the finance they need and to encourage entrepreneurialism. We in this region are also fortunate to have access to public sector investment funds in the shape of the

In financial terms: NEA2F chairman Geoff Hodgson and chief executive Stephen Lightley with Lord Adonis (centre) at an Access to Finance event when he was consulting the financial community for the North East Commission considering the region’s way forward. £125m Finance for Business North East programme. This groundbreaking suite of seven investment funds is designed to drive future economic growth in North East England. The programme provides debt and equity finance to SMEs based in, or relocating to, the North East of England, with the aim of helping them start up, develop or grow. To be eligible for support, a business must be a SME and operating in an ERDF eligible sector. To date more than 470 companies have benefited from the programme, which shows how valuable a role public funds play in meeting the funding gap. In addition, the funds have helped to stimulate the market and bring in additional private sector cash to the tune of £65m. Business Secretary Vince Cable, said “as businesses are continuing to struggle to get credit from their

This year has seen the launch of a range of measures to support start-ups and growing SMEs across the UK

opinion

banks, developing alternative lending channels is essential, so firms are less reliant on banks”. Many of the national initiatives discussed earlier address these alternatives. But SMEs need to be open to other sources of finance, and business “angels” and venture capital firms have their role to play. But these do not fully serve the needs of smaller businesses, many of which depend heavily on bank lending to meet their investment needs. In recent months an explosion of peer-to-peer lending sites and crowd funding sites has emerged to fill this gap. So, even in a climate of continued austerity, it is not all doom and gloom. However, SMEs must approach fund-raising strategically to be successful. They must research where to look for sources of relevant finance, and they must learn how to make a winning pitch. It is up to appropriate providers in the region to address their specific needs to ensure they are investor ready. n Geoff Hodgson is chairman of North East Access to Finance.

bq-magazine.co.uk opinion

money markets

Success is where you find it Fast growth in North East companies is not confined to the technology industry and some of the highest growth is found in the most unexpected places, says Craig Iley

Just 5% of small businesses in the North East play an extraordinary role in boosting the local economy, research by Santander Corporate Banking shows. These 219 fast growth, or growth champion, businesses have a significantly higher economic impact than the rest of the region’s SME population. Additionally, these companies proved to be exceptionally resilient during the recent recession creating 5,177 jobs between 2007 – 2010. A Breakthrough Growth Champions Report, which examined growth patterns among businesses with turnovers between £500,000 and £10m, revealed that these growth champions are found across a wide range of industry sectors, including social work (14.7%), complementary medicine and physiotherapy (11.4%), architectural and engineering activities

(7.7%). In making their extraordinary contribution to the local economy, growth champions demonstrate a fantastic ability to excel against the backdrop of difficult trading circumstances, delivering significant growth in both jobs and net worth. And contrary to popular thinking, these firms operate across a wide range of industry sectors, proving that fast growth is not confined to the technology industry. Banks have a responsibility to support businesses, to speed growth at all stages of their lifecycle. Using the common characteristics exhibited by growth champions, we can identify fast-growth businesses of the future and provide the support they need to help them fulfil their potential. Using the above research, Santander designed its Breakthrough programme to support these firms specifically in early stages of their growth cycle, and to help speed their growth trajectory. Breakthrough is just one way in which Santander is increasing its support for small and medium sized businesses. As well as Breakthrough, Santander has focussed on growing its core corporate and commercial banking business. In so doing, Santander increased its lending to SMEs in the North East by 24% in the last year. In the year to the end of September the

bank lent £110m to SMEs, and during the period has expanded its corporate business centres in Newcastle and Tees Valley as part of a £7m investment programme to help expand its UK presence. This lending to SMEs has been supported by the Government’s Funding for Lending initiative, under which the Bank of England will lend money at below-market rates to the financial institutions. We are delighted to have been able to support even more businesses in the North East this year, particularly smaller businesses so vital for economic recovery and growth. There are some fantastic businesses in our region, and we are proud to be providing not only funding but, more importantly, a committed long-term banking partnership with more of our local strong and growing companies. Santander accessed the first tranche of £1bn, out of the £9.4bn it is eligible for, from the Funding for Lending scheme last July. That enabled it to continue its drive to increase lending to smaller firms and, by helping to free up capital markets, reduce rates across its range of business banking products. n Craig Iley is regional director for Santander Corporate Banking in the North East.

bq-magazine.co.uk

money markets

opinion

Locked on to targets Andrew Mitchell answers BQ Yearbook questions on the effects of the £125m Finance for Business North East Fund on ambitious companies in the region, and indeed the region’s economy too BQ: Three years into running the £125m Finance for Business North East Fund, how effective would you say it is in giving companies of the region, and the region’s economy, some uplift? Clearly, one programme can only achieve so much, and our focus is very much on the smaller end of the market, albeit with strong emphasis on companies with high growth potential. Even so, with some £60m from the FFB funds committed to regional businesses so far (in 30 months of operation) and some £65m brought in as private sector co-investment (much of it from regional business “angels”), we have seen approaching £150m already invested in some of our most exciting companies as a result of the JEREMIE programme. We are also on track to meet our targets in jobs created, not to mention the collateral benefits to our professional services community created by the boost to dealmaking in the region. BQ: How successful would you say the fund has been during 2012? We have already invested over £20m this year and expect a year-end number of around £25m – very much on a par with 2011. Overall, the FFB funds have continued to progress in line with targets set, at a time of continued economic uncertainty, reduced

100

business confidence and, not least, the continued absence of bank lending for many sectors within the SME space. BQ: Can you give some indication of the range of sectors benefiting? We have invested across the eligible range, with IT and software in front, closely followed by manufacturing (£20m so far). Companies in the health and creative sectors have also received substantial investment. BQ: How have enquiries changed since the launch? There was a strong ‘bow wave’ of deals in early 2010, when the FFB programme opened for business; however, we have been delighted to see a strong and sustained pipeline of high quality deals in the region and, overall, applications are up in 2012 versus 2011. BQ: What proportion of enquiries result in investment? That varies hugely across the suite of funds. The high end equity funds (such as IP Group’s Technology Fund and North Star’s Accelerator Fund) tend to receive many more propositions for each transaction they do (typically one completed deal for every 10 applications), because they are very much looking for deals with greatest potential (the next Sage if you like), whereas the micro-loan and Proof of Concept Funds, dealing with very early

stage businesses, where amounts for each investment are relatively modest, are looking for a broader spread of deals, so the ‘hit rate’ for applicants is around 1:3. BQ: Have you had a burst of Microloan Fund applications as a result of redundant public sector individuals wishing to set up businesses? Recent research has shown that over the next three years or so, the ratio of opportunity entrepreneurs to ‘necessity’ entrepreneurs, across the UK, will shift from around 60:40 to 30:70 and much of that change will be driven by job losses in the public sector. Many cuts announced in the North East have still to take effect so we certainly expect a continued rise in the number of ‘necessity’ entrepreneurs in the region. The micro-loan fund will do its best to support the best of these. BQ: Has the standard of business plan accompanying any such applications been high in the main, or has there been a need for many to review and resubmit? Again, there is a wide variation across the different funds. Entrepreneurs and businesses seeking larger amounts of money (into six figures) tend to have consulted professional advisers, so the business plans tend to be at a more advanced

bq-magazine.co.uk opinion

money markets We expect a continued rise in the number of necessity entrepreneurs and the micro-loan fund will do its best to support the best of these

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money markets stage. Certainly, we have seen no dropoff in the quality of deals, and those of our investment managers who operate across the UK for example (such as IP Group) confirm this. However, at the lower end (under £100k) our fund managers are routinely involved in working with applicants to enhance their strategies and refine their business models. It’s an integral part of the investment manager’s job in the SME sector. Sometimes, too, a business may just not be ready for external investment, with the responsibilities (as well as

for it at the outset? Absolutely on track. It is too early to tell what the long term investment returns to legacy will be, but in terms of putting the cash to use, we are right where we need to be as we move into the second half of the investment life of the programme. Getting there will take hard work by all concerned (not least by the region’s entrepreneurs who are the real point of all of this). BQ: What sectors do you think might particularly stand to succeed with bids during 2013? As ever, it is hard to forecast this

There are some tremendously innovative firms in the manufacturing and service sectors in this region and we are keen to talk to them opportunities) that come with the money. BQ: A key aim of the fund was to attract employers from outside the region into the North East. Is this being achieved? In 2010 definitely, yes. Some 20% of applications then came from outside our region. With the emergence of similar funds in the North West and Yorkshire, and the very activist stance of the Scottish Government north of the Border, that number has fallen back to around 10%. However, our fund managers remain keen to engage businesses from outside the North East that are willing to re-locate where that makes commercial sense for the business. I don’t doubt, either, that we have stemmed the flow of young entrepreneurs heading south to find intelligent investment capital. Now that is available here on our own doorstep. BQ: How firmly on track is the fund to achieve all the aims visualised

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with any accuracy, especially as the economic situation is so volatile. But I am confident firms working in some of the region’s manufacturing ‘hot spots’ will continue to do well. BQ: Are there any sectors or types of companies from which bids have been comparatively rare, but which you think should be making a pitch? Sometimes people assume our fund managers are only interested in high-tech businesses. That couldn’t be further from the truth. With one or two exceptions (where we have to follow the EU rules) we are interested in ambitious companies with growth potential from across the board. There are some tremendously innovative firms in the manufacturing and service sectors in this region and we are keen to talk to them. BQ: Are there any common mistakes made with initial applications which, by avoidance,

opinion

could lead to faster processing and perhaps greater chances of early and favourable consideration? Well, inevitably, whatever it is people want to do with the investment they need will take twice as long, and cost twice as much as they think! So, one of the key things is to be realistic on timeframes and cost, and to be honest about the risks of whatever development you have in mind. BQ: For how much longer does the fund run? The fund can invest right up to the end of December 2014, so just over two years remain for businesses in the region to bring forward their business plans and propositions for investment. Once the money has been invested, the managers will then be focussing on the equally important task of maximising returns on the investment through loan redemptions, trade sales and, hopefully, the odd IPO, and that will take us through to 2020. We need to pay back our own investors (the European Investment Bank in particular) then maximize the legacy returns for the region. BQ: What job satisfaction do you and your staff get in fielding applications? I think everyone involved with the FFB programme is an enthusiast with a real passion for investing in exciting young businesses and working with entrepreneurs from across the North East. Many of our investment managers could earn far more working in the private equity business, doing larger leveraged deals in established companies. But – like me – they want to work with early-stage companies. n Andrew Mitchell is chief executive of North East Finance (Holdco) Ltd.

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money markets

Cash flow concerns mount Recent reports show an epidemic of cash flow problems blighting the North East business community, but there are solutions out there in the market

Some 42% of SMEs in the North East currently have, or recently have had, cash flow concerns, research by Hitachi Capital Invoice Finance suggests. Of these, 33% are using secured loans, which can be a quite costly way to free up a balance sheet. All of 30% however have borrowed

from friends and family rather than ask their bank manager to fund cash flow. John Atkinson, head of commercial business at Hitachi Capital Invoice Finance, says: “Many firms don’t realise they have funds that can be utilised on their balance sheets.” Hence HCIF’s Inspired Cashflow product, aimed at helping just such a solution. Meanwhile, a £1.8m North East Business Support Fund, managed by enterprise agency NBSL, has fielded more than 800 applications in its first six months, with 90% (740 firms) winning backing. Businesses can apply for up to £1,400 in support for business improvements. But John King, North East business support manager at NBSL, says applicants must have a mainly businessto-business client base, and fewer than

If they can, others can Accomplished in business themselves, Andy Preston and Alastair Waite have launched Teesside Patriots, a £3m fund backing for up to three years a selection of Teesside firms promising further success. Waite, a director of Stockton technology group Onyx, is also a recognised promoter of the sector on Teesside with projects such as DigitalCity which led to the creation of Boho One, Teesside’s digital hub commercially. Preston, grew up in Middlesbrough and after a career in international finance, building businesses for banks and running a large hedge fund, returned to set up Green Lane Capital in his home town with his brother Chris, investing in property and taking strategic stakes in companies. They have already backed Sound Training for Reading, with £100,000 to raise literacy levels within schools.

Coaching too Business backer Entrust supports firms not only with funding but also coaching and support. Its flagship projects, Business Angel Network and Investor Forum have been operating for more than a decade.

Face to face While 15% of SME bosses in the region use the internet to pick out financial information, a vast majority of 97% still prefer to discuss their financial matters face to face – a conclusion of research by Bibby Financial Services.

250 full time employees. It is still worth checking with banks though. They have access now to a Funding for Lending scheme whereby the Bank of England makes low-cost funds available to them in a bid to tackle rising borrowing costs and increase lending. Banks can initially borrow a 5% equivalent of what they currently lend, and the more they lend, the more they can borrow. There is no upper limit on their borrowing either. Building societies can also participate, in turn helping to bring down mortgage costs. n

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money markets company profile

The Story so far… “If it aint broke, don’t fix it” goes the saying, and by continuing on the same trajectory, the JEREMIE fund continues to make a major and significant contribution to the growth of the North East Economy. Steady consistent growth is the underlying message, and another programme, launched by the innovative Ignite 100 network, provided a reach seam of technology investments. Not only does the programme hothouse some of the brightest and best in technology innovation, it also brings together some very exciting and brilliant investees from around the region. 2013 should see a continuation of early stage businesses going on to access further funding from the funds set up for growth, and also those companies at a more advanced stage of development effectively “exiting” the programme by paying off their loans. If all goes to plan then this region must surely be on track for a healthy legacy fund – and several Happy New Year’s to come.

Angel Fund North East Angel Fund, Jonathan Gold, Rivers Capital The North East Angel Fund has had its busiest year yet with 50 investments in 32 businesses in total. The remarkable spirit of the Entrepreneurs in the region has shown through in these difficult and uncertain times which I fear will continue during 2013. One feature of 2012 for us has been the improvement in the quality of business propositions

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we see; people are putting more effort into business plans and their preparations. The climate is definitely more competitive for those seeking investment. We have seen several of our investee businesses start to trade and win orders and although it’s a bit unfair to pick out individuals, GrandScheme Bikes have had a great year and have my admiration having won their first orders to supply bikes schemes in other cities. In general, we expect another tough year but the demand for investment will grow here even if the overall UK economy doesn’t. Tel: 0191 230 6370 email: info@riverscap.com www.riverscap.com

Growth fund North East Growth Fund, Simon Johnson NELFM has been investing the NEGF since its official launch in January 2010 and we have experienced unprecedented levels of market demand. In what seems like a very swift first half of the 5 year investment window, we have now completed deals which take us to the point of half of our allocated £20M invested. We are delighted that many North East SME’s are involving themselves in funding their companies using risk capital and deprioritising themselves away from such heavy reliance on traditional debt methods. By employing a holistic approach those businesses

have taken a quantum leap and established relationships with the regions fund managers. No one knows what the New Year will bring and we as fund providers need to be prepared to implement further assistance to the small and medium business market. These companies continue to experience market failure which prevails across Europe and at our regional level translates into severely restricted access to the capital that is vital to fire the engines of growth. Tel: 0845 111 1850 email: enquiries@nel.co.uk www.nel.co.uk

Growth Plus Fund North East Growth Plus Fund, Joanne Pratt, FW Capital “It’s now three years since FW Capital opened its doors in the North East to manage the Growth Plus Fund and I’m pleased to have been with FW Capital from the start. What attracted me to FW Capital is its pragmatic approach because when it comes to investing in SMEs there’s rarely an off-the-shelf solution. We’ve invested in some excellent businesses since we launched the fund, but one size definitely doesn’t fit all in our market. That’s why we work hard to build relationships with businesses to understand exactly what they want to achieve. This helps us structure the right investment package to help them move to the next stage quickly. If this

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money markets company profile means a further round of investment then we have the appetite and the funds available. 2012 was an interesting year and we completed a number of deals, but 2013 is looking even more promising. Enquiries are up. We’re already in discussions with some great businesses and looking forward to working with them in the new year.” Tel: 0191 350 6310 email: comunications@ fwcapital.co.uk www.fwcapital.co.uk

technology fund North East Technology Fund, Duncan Lowery, IP Group plc The past twelve months at IP Group plc have brought some great highlights. A combination of demand in the marketplace and a consistent enquiry rate have kept activity on an even keel and we have been successful in building a portfolio of 40+ businesses with real potential in the engineering, manufacturing, digital and life science sectors. Our participation in the ignite100 accelerator programme has continued and it has been extremely rewarding to see some of the strongest teams to date benefit from the support provided. This year a number of our portfolio businesses exceeded their targets earlier than expected. Others earlier on in their life cycle also look set to deliver on their early promise, which is very positive for the future. The IP Group team will continue to provide appropriate support and resources to

assist in their development. The New Year brings a whole host of opportunities. Our focus is on deal flow and investments into revenue-generating businesses which need an injection of capital to fund a new phase of growth, whether this is via equity or another funding structure. We’re looking forward to making this happen. Tel: 0845 519 4112 email: netf@ipgroupplc.com www.thenortheasttechnologyfund.com

Proof of concept fund North East Proof of Concept Fund, Dr Richard Exley, Northstar Ventures “The bit of my job that gives me the most pleasure is when I find a dynamic young business and am able to persuade other people to put their hands in their pockets to support it. “With two-thirds of the £15m fund invested, we’ve helped around 90 companies – mainly of the classic high-growth, high-tech variety. But we have a varied portfolio and continue to see some great activity in Software as a Service and energy efficiency. “With just £5m left to invest, we tend to favour propositions that can immediately start servicing their debt and help meet the fund’s returns targets.” “But my message to anyone with a product-based business, and a competitive advantage, is that this is only the tip of the iceberg. We

have a range of angel investors and other VCs who know from experience that we can be very persuasive in getting them to co-invest with Northstar.”

Accelerator fund North East Accelerator Fund, Ian Richards, Northstar Ventures “I sometimes like to think of our investee companies as racehorses – once we find a good one with decent form we just can’t resist the temptation to keep on backing them! “Thanks to our strong presence in the market, deal-flow remains strong and we are happy to work with entrepreneurs at whatever stage they may be at. What’s important is that they are an early-stage business with high growth potential and a truly scaleable proposition. “We’ve now invested £14m from the Accelerator Fund across a good range of companies – many of which have turned out to be winners. In 2013 we see ourselves continuing to have a ‘flutter’ on some of the exciting new businesses that keep on emerging in this region, despite the general economic situation. But we will also be making second, third or even fourth rounds of investment in some of our dead certs.” Tel: 0191 229 2700 email: enquiries@ northstarventures.co.uk www.northstarventures.co.uk

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service sector In association with

Throughout the nation and abroad, firms benefit from expertise rooted in the North East. In retail, innovation should be the goal. In service generally only the highest standards will prevail, as lawyers may find amid stiffening competition. And an increasingly important service for all businesses could well be security

bq-magazine.co.uk opinion

service sector

MEETING THE CHALLENGE OF TOUGH CONDITIONS Alastair MacColl looks back on a year of rapid development for the BE Group and reinforces the organisation’s ambitions for itself and the thousands of businesses that it works with Many of us will never have experienced the degree of economic uncertainty and lack of visibility that we have seen over the last year. It seems like a bit of an understatement to describe it as a unique year. But despite that uncertainty the business community in the North East has demonstrated resilience, flair and a determination to maintain the kind of investment led growth that characterises some of our best businesses. Like so many other businesses the BE Group has continued to adapt, invest and grow over the last year. Revitalising some of the more established parts of our group and expanding our presence in a number of newer markets. Our companies specialise in business improvement, supply chain development and events and publishing. With a portfolio of market leading products and services, which have all been designed to help the thousands of businesses and organisations that we work with each year to succeed and grow. We now work across the UK through a growing network of established offices and over the last eighteen months we’ve worked in over 30 countries, helping companies to develop their export potential. But our roots remain firmly in the North East where our group is based.

Businesses in the region will know our group for some of the services we currently operate and the products that we have developed over the last year. These include the Investment for Growth programme, Business Generator and more recently the £30m Let’s Grow initiative which was secured by Trinity Mirror, UNW and the BE Group, supported by Teesside University and Northumbria University. But many businesses will also know us through our commercial events, our publishing portfolio and the recent announcement that we have secured a major contract to help maximise the impact of the next generation of broadband in North Yorkshire.

Our priority over the last twelve months has been to continue investing in our people, our technology and our infrastructure. To make sure that we offer all of our customers great levels of service and consistently exceptional results. Our customers expect us to be innovative, ambitious, uncomplicated and, bottom line, to deliver results day in and day out. And the talented and committed group of people that we have working in all areas of our business make that happen. That’s why our client list has continued to grow to include names like Hitachi, Heathrow Airport, Sydney Water, Scottish Development International, Skanska, Lockheed Martin, the Department of Business Innovation and Skills, British Land and thousands of other great businesses and organisations. Like so many other businesses in the North East we’re investing for growth, because our aim for the year ahead is quite simply to help even more businesses to continue succeeding and growing. n If you’d like to find out more about our group then contact Phone: 0191 426 6408 Email: enquiries@BE-Group.co.uk Website: BE-Group.co.uk Twitter: @B_EGroup

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opinion

An idea worth spreading For 15 years many firms have been destroying relations with customers, says Kevin Robson. He suggests that in a wilderness of poor or indifferent treatment of customers, and over-focus on serviceability, Service-Ability will be the next big thing We had Total Quality in the 1980s that believed product quality was the responsibility of everyone in the organisation if customer expectations were to be not only met but also exceeded. Then Business Process ReEngineering in the 1990s encouraged a rethink about how organisations functioned, so as to reduce costs and re-align the entire organisation toward the customer. The Balanced Scorecard at the turn of the millennium integrated non-financial measures such as customer value, internal processes and people’s learning and growth into measures of success. Yet, since the technological revolution burst upon us just 15 years ago, we have been recklessly destroying our relationship with our customers and our people. As important as it undoubtedly is, the indiscriminate application of new technology to our business transactions is sucking the life out of the customer relationship, reducing it to cold systems and processes, and all in the pursuit of efficiency and profit. Machines may be capable of delivering a service (what would we do without bank ATMs for example?), but they cannot deliver the service that customers need. How many of us have been the victim of decisions made by computers about

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Unlike coal, that raw material of the industrial era, our regional human warmth will never subside. It is the raw material of good customer service and it needs to find a new expression

our credit worthiness for example, yet have been left with the distinct impression that a properly trained, trusted and experienced human being could have made a more nuanced and better decision, not just in our interests, but those of the organisation itself? How many of us have experienced the ‘if-it-isn’t-on-the-screen-it-can’tbe-done’ syndrome when booking a holiday or trying to get a utility to fix a billing query? Customer service has become reduced to an industrialised commodity: at best something done by “customer services”, at worst by machines. In the process, the ability to serve customers in a way that satisfies both their basic needs and those of the customer-facing employee, is being lost. We seem only able to see the cost savings technology offers. But what about the cost of lost customer loyalty? The opportunity cost of not giving good service? It costs six times as much to find a new customer as it does to keep an existing one, yet companies are now experiencing up to 30% annual customer churn because of bad service, and this is matched by up to 20% employee turnover. The whole transactional process is becoming dysfunctional, and that is expensive! Today, companies of all types need to

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service sector

opinion

Question of conscience: Everyone looks for good service but do they always get it? become less concerned with efficiency and more with corporate personality. They need to turn again toward their customers, and they must do it through their people, equipping them and culturing them to be totally customercentric. If they don’t, their shareholders will lose out. We must become less concerned with process and more with personality, and restore the humanity of our business transactions, embracing again that old business axiom, that people do business with people. The technology is important, but it must become our servant, not our master. We need to become wiser about its application and not just apply it willy-nilly without thought to the consequences. We must become more mature in harnessing its enormous power and benefit. We must stop merely servicing customers and start serving them again. Also, we must learn again to reach out from the very heart of our organisations, to the loyal satisfied

customer, through the loyal satisfied employee; putting the technology and the thinking it induces behind our people, not between them and the customer as ultimate mediators of the transaction. We must start using the technology more intelligently and re-equip our businesses to become service-able through our people. Across the span of the Industrial Revolution, our regions produced great industrial genius, which, combined with skilled, hard-working people, made them an economic force to be reckoned with. Today we have an overwhelmingly service based economy (4/5ths of our GDP) where workers who would once have manned the machines of industry find work in call centres, dominated by technology and systemisation: used again as the slaves of the technology in that particularly modern version of the 19th Century sweat shop and failing completely to harness their inbuilt talent for warmth, friendliness and inventive initiative.

Unlike coal, that raw material of the industrial era, our regional human warmth will never subside. It is the raw material of good customer service and it needs to find a new expression. We should seek to re-ignite a new spark, a new regional spirit, and release that new source of fuel for our region’s industry and commerce. It is well known that a warm and friendly environment is a sturdy prop of economic regeneration. Our industrial regions could, once again, become distinctive for their human and social capital, becoming distinctive by their Service-Ability. This will take boldness and intelligence on the part of our business leaders, who need to wake up to what is happening and realise that a major opportunity exists for those companies that get it right. In what is now a wilderness of poor or indifferent treatment of customers and an overfocus on serviceability, Service-Ability will be the next big thing. It will be the key to sustainable competitive advantage in the early decades of the 21st Century, and it will regenerate our society. n Details of Kevin Robson’s new book, Service-Ability (£24.99 plus discount and available as an e-book) are on www.wiley.com. The former managing director of his own companies and chief executive of an international charity is now a business development and management consultant, working with diverse organisations and industries. He has lectured at four universities in the North East, holds a graduate diploma in marketing and an MBA from Durham Business School.

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overview

Lawyers scramble for clients Many lawyers, like everyone else, have been feeling the pinch and the competition for clients is intensifying Lawyers have gone through another tough year. PwC’s latest annual survey of the UK’s Top 100 law firms suggests the eco-uncertainty has brought a fairly flat performance to most. Also, the alternative business structure (ABS) legislation is starting to impact, whereby lawyers and non-lawyers can form legal partnerships and companies to provide reserved legal services under licensing and regulation. This way, new entrants are taking market share. Richard Lingwood, PwC director in Newcastle, sees a widening gap between best and worst performers. The big differentiator for the largest firms remains their higher chargeable hours, premium pricing and tightly managed fee-earner headcount. In mid-tier, clear strategic focus is required. Then firms giving quality niche service to clients can often do better than those offering full service. Performance levels are far below those of 2008. Firms of 11 to 25 equity partners have suffered most in falling profit per equity partner – an average of 31% - to £481,000. And there has been an average drop of 20% in equity partner headcount over the same four years. Average profit per equity partner reported by North East firms shows rises and falls. In this atmosphere the competition intensifies. Also DWF LLP has acquired Crutes in Newcastle and Stockton,

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Jonathan Blair: Sees growth. and DAC Beachcroft is growing in Newcastle, where it took root in 2008. DWF announced a 19th year of consecutive growth with its £102m turnover. It employs more than 1,500 people in Coventry, Birmingham, Leeds, Liverpool, London, Manchester and Preston, alongside its two operations in the North East. Beachcroft, a specialist in insurance and health care legal advice to businesses and the NHS in the North East and Cumbria, opened in Newcastle with 30 staff. It now has 70 and expects to take that up to 120 after relocating shortly to 11,300sq ft of offices at Wellbar Central in Gallowgate. The surprise of the year has been the merger of the North East’s largest law firm, Dickinson Dees, with Bond Pearce,

effective from next May 1. Both firms’ partners favoured it. Bond Dickinson, as will be, will have income of around £95m, 1,200 staff and operations in eight UK locations. Jonathan Blair, managing partner of Dickinson Dees, will be managing partner of Bond Dickinson and Nick Page, chairman of Bond Pearce, chairman. John Marshall (Dickinson Dees) and Victor Tettmar (Bond Pearce) will complete the senior management team. Blair says: “The merger will give us a strong base for further growth and lateral recruitment.” The firms’ London offices will merge under one roof in larger premises. Elsewhere, Bond Dickinson will be in Aberdeen, Bristol, Leeds, London, Newcastle, Plymouth, Southampton and Teesside. Aspirations are a place in the sector’s UK top 20 by 2020, with a good fit 125 partners and more than 450 lawyers. Dickinson Dees deals this year included a £1.6bn reorganisation of a chemical company, and work for a prime client, Grainger, on a £285m acquisition. One of the smaller firms, Muckle, has been recognised this year as best law firm outside London in independently assessed awards made by The Lawyer. Muckle was also named corporate law firm of the year for an unprecedented fifth year running at the North East Insider Dealmakers’ Awards. n

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service sector

Innovation the key to retail recovery Many familiar shop names are fading from the high street but initiatives are under way to retain customer interest and loyalty A recent average of 32 closures a week involving names as big as Comet, Blacks, Bonmarche, Peacocks and Stead & Simpson has taken the number of empty shops on UK high streets up to 11.3% now, the British Retail Consortium reckons. While the North East suffers as elsewhere, retail landmarks of the region, such as The Bridges shopping centre at Sunderland, the Metrocentre at Gateshead and Eldon Square in Newcastle, continue to progress, while Monument Mall, also in Newcastle is getting spruced up. At The Bridges Gerald Jennings, who is portfolio director of the North and responsible for The Bridges on behalf of owner Land Securities, says: “Retailers here have continued to trade well. We are able to attract brand new retailers into the centre, and existing retailers are looking for more space. The centre’s void rate stands at less than 2%.” Capital Shopping Centres, through Eldon Square and the Metrocentre, has two of Europe’s biggest shopping centres, and it is about to further improve both. The North East’s biggest regionally based department stores group, Fenwick, also commands 24th place in the region’s Top 200 Companies, despite a £5m slip in turnover to £291m. Strategic innovation is vital, say sector specialists at PwC in the North East.

Pedal power: Cycle hire is one of the city centre innovations brought in by NE1 in Newcastle. They reckon UK retail is now a mature market, its non-growth since 2002 making innovation even more critical. Jonathan Greenaway, partner at PwC in the North East, says: “Some retailers in the region have somewhat better growth prospects, due to focus on product, and channel innovations

such as a successful online strategy or international expansion. Here, use of higher profit multiples when making valuations may be justified.” Many high street managements, especially in smaller towns, await results of Mary Portas’s 28 initiatives which have been accepted by the Government, including dedicated “town teams” to manage high streets, a £10m high street innovation fund and a national markets day. Affordable town centre car parking and a towncentre-first approach to planning are proposed, also disincentives for landlords who leave shops empty. She has even taken a swipe at the Government itself, branding its delay of intended business rates revaluation as a high street tragedy. It has been put back two years to 2017, meaning retailers will continue to be taxed on rents at a pre-market crash 2008 level. Communities Secretary Eric Pickles has said the move was postponed to prevent small firms facing big hikes in bills, the logic of which many small businesses are still trying to work out. Amid other cries of anguish about the detrimental effect of website dealers, Natasha-Rachel Smith at TopCashBack, a websited cashback service, says: “While consumers will always be lured by online bargains they will continue to need the high street as the background canvas of their communities.”

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service sector The Government has recognised this by part-funding Business Improvement Districts, giving retailers and landlords a stronger role over improving their local areas. An Alive after Five campaign by NE1, Newcastle Business Improvement District, to boost the city centre’s early evening economy netted an extra £53.1m of business in six months, helping traders there to buck the national trend. Shops have stayed open until 8pm, benefiting from free parking in council-owned multi-storeys after 5pm. An extra 747,626 people visited Eldon Square and 194,042 used Northumberland Street shops, while around 14% of sales at participating

retailers were between 5pm and 8pm during the first six months. NE1’s other shopping lures include an open-air cinema, cycle hire, meal and drinks discounts - even a make-believe sandy beach complete with deckchairs and all, on the Quayside. Darlington is introducing a Business Improvement District. Businesses there will also pay an additional tax. Steve Cochrane, Middlesbrough’s fashion retailer extraordinaire, is bitterly disappointed he could not persuade other businesses to introduce such a district there. Kevan Carrick of JK Property Consultants, who chairs the RICS North East board, says: “Business

overview

Improvement Districts offer business communities the chance to work together as one to shape the development of their high street. It is essential, though, that any new measures do not create more mechanisms and red tape.” Newbiggin, Stockton and Amble are among towns getting around £100,000 each to stimulate retail innovation. Many stores harm themselves by not continuing to build up their own online services, and by not checking why some online shoppers abandon their “baskets” midway through an order, according to Aspect Software. Often it’s a problem with the online process that drives them to abort. n

company profile

Professional support There is a clear need for expert advice which helps SMEs and start-up businesses become the engines of growth which are key to the region’s economic recovery says Keith Proudfoot, ICAEW Regional Director

ICAEW chartered accountants can do so much more than prepare accounts and deal with the taxman.

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They have the professional experience and expert knowledge to examine business ideas, evaluate potential and advise for the best chance of success. Local businesses can find this out for themselves. ICAEW’s Business Advice Scheme (BAS) offers SMEs advice on how to overcome the challenges they face in today’s economic climate. There’s an initial free session of up to 2 hours with a qualified ICAEW member and no future obligation. Keith feels it’s not just government’s responsibility to help businesses survive and thrive. “As a profession that acts in the public interest, we recognise our responsibility to offer crucial guidance” n

www.businessadviceservice.com to find your nearest BAS participating chartered accountant.

ICAEW (the Institute of Chartered Accountants in England and Wales) is a professional membership organisation supporting over 140,000 chartered accountants around the world. For information please visit www.icaew.com

bq-magazine.co.uk overview

service sector

Company crime: the assassin within Now is the time that companies can least afford to be ripped off. Yet now is the very time when they are likely to fall victim, says Brian Nicholls Corporate crime bleeds too many firms – sometimes to death. While UK fraud by bosses and employees fell in the first half of 2012, it was not so in the North East. The value of large (£100k plus) frauds then more than doubled year on year to £13.5m – partly due to a large duty evasion case at Newcastle Crown Court. In another big hearing a group of nine, including a mortgage advisor from County Durham, were brought to court for stealing £2.2m from financial organisations through mortgage fraud. Sara Smith of KPMG’s Newcastle forensic practice says: “The extent and impact of fraud perpetrated from within businesses has historically been masked by a handful of exceptionally large cases coming to court. The fall in such ‘super’ cases even so shines a spotlight on a chronic threat to businesses in these austere times.” Two North East solicitors in three months were jailed at Newcastle Crown Court. One, 63 and from Durham City, had siphoned off more than £300,000 of clients’ money. On his admission of four counts of taking money by deception and five counts of fraud, he was jailed for two years. Before that, the same court heard that a 64-year-old solicitor from Longhoughton in Northumberland had taken lump sums of £20,000 and £40,000 from clients’ accounts -

£1m-plus in all - and spent a lot of it on holidays abroad and cars. He was jailed for four years and his business partner for two. UK fraud has been running at £3.5bn a year, KPMG reckons. Financial institutions and commercial firms

Martin Tyeley: Wants businesses in the North East to arm themselves better against online criminals. between them lost £1.7bn of that. David Arthur, managing partner at accountants Tait Walker in Newcastle, complains that politicians who could stiffen laws and sentences don’t seem to acknowledge that corporate crime is bigger perhaps than all other theft put together. Taxpayers have to make up the shortfall in part of revenues that don’t reach the Chancellor. Tim Thompson, a risk analyst with Deloitte says fraud happens where employers have the most lax controls

or where management attention drifts. The problem is so great now in the North East that Frank Nesbitt, a former detective who served with Northumbria Police for 30 years then became a forensic services manager at Tait Walker for six, has just set up his own company Quo Vadis Forensics in Washington, to investigate complex fraud for clients all around the country. Nesbitt says the likelihood of internal fraud increases in difficult times such as now, when even staff who normally contribute to security may be cut back. The largest group perpetrating fraud, by the way (by value), are management. They make up 55% of cases. Cybercrime has become the second most commonly reported economic crime hitting the financial services. Only asset misappropriation (the traditional way of defrauding an organisation) is more prevalent, PwC says. Cybercrime accounted for 38% of economic crimes compared to 16% for other industries in a survey. One in seven large organisations have been hacked in the last year. The average large organisation faces a significant outsider attack every week- small businesses one a month. Customer impersonation has tripled since 2008 – with financial services affected most. The number of large organisations being hacked into is at a record high. Overall cost of security breaches to UK plc now runs

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service sector House of reckoning: Some shocking cases of corporate crime have been disclosed in the law courts but too many instances escape exposure.

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overview

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to billions of pounds a year. Yet 20% of organisations spend less than 1% of their IT budget on information security. A tad under half of IT professionals in the UK are concerned that any potential threat to the intellectual property of their organisations would directly lead to the loss of their job, according to research by the Federation Against Software Theft (FAST). Martin Tyeley, a director in KPMG’s Northern risk consulting team, wants businesses in the North East to arm themselves better against online threats. He says: “The world of cyber security has been tilted on its axis over the past two years, from the actions of hacktivists and associated groups, through to state sponsored

service sector agencies with seemingly unlimited resources.” Petty theft is no small item either. Workers who “borrow” stuff from their offices are racking up costs of £2bn a year - and unwittingly leaving their employers open to security breaches with far-reaching implications.

includes: Post-it notes, adhesive tape, scissors, toilet roll, photocopy paper, USB memory sticks, notepads, pens, staplers, and highlighters. Little by little, it all adds up. Construction payroll firms cost the taxman nearly £2bn in lost revenue, Ucatt union has calculated

One in seven large organisations have been hacked in the last year Banner Business Services quotes a survey revealing that more than twothirds of people in office jobs have admitted taking stationery from work. UK business in fact is one of the hardest hit in Europe by office theft. Booty

in a report on false self-employment. It says the practice by such companies of keeping workers classified as selfemployed is spreading. The largest payroll company reportedly has more than 114,000 workers on its books. n

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business support In association with

Aspiring entrepreneurs will continue to clear the hurdles, which in 2012 will include changes to employment tribunals, consultation on ‘modern workforces’ and a complex new PAYE reporting system. They’ll be wise to stay in touch with the taxman too

bq-magazine.co.uk opinion

business support

Go on, you can do it Many barriers to success will appear or continue in 2013 but in the North East, a land of entrepreneurs, many self-starters will still find incentive, says Nigel Mills The North East is the most entrepreneurial region in the United Kingdom, says a survey by YouGov on behalf of Sage plc to discover the levels of entrepreneurial activity region by region. This survey found that over 25% of all people in work wanted to set up their own business. Reasons given were: â&#x20AC;˘ To do something they felt passionate about â&#x20AC;˘ To have greater control over their working lives and â&#x20AC;˘ To make money Of this 25%, 11% said they were actively intending to set up their businesses in the next two years in the North East - the highest percentage of anywhere in the UK. The three worst regions were Scotland, the North West and Northern Ireland. So why is the North East so ambitious? Entrepreneurs come from two different backgrounds. Some are born to be a business owner. Others, because of circumstances at work, find themselves

There are two key ingredients that all entrepreneurial activity needs to survive and grow

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business support facing the prospect of no job, or take their existing work model into private hands, and supply services to their customer base as an independent company. Regardless of the reasons for becoming an entrepreneur, there are two key ingredients that all entrepreneurial activity needs to survive and grow. The first is iconic figures to look up to, and to prompt the thought:

both ingredients available locally, either delivered by the Entrepreneurs’ Forum primarily or by other business organisations as part of their total business development strategy. Now, 2012 has seen very little growth for the UK economy as a whole. Indeed, it may end up a slight negative at the end of the year. However, Forum members paint a very different picture.

Airing his knowledge: Philip Meeson passes on to North East entrepreneurs the wisdom of his experience as chief executive of Jet2, at Fortune Favours the Brave, the autumn business conference of the Entrepreneurs’ Forum. “If they can, I can”. The second is someone to help guide you on the journey, a mentor. Market research has shown that 70% of companies that are mentored survive for up to five years. Why is this important? Because all net new jobs in the world are created by companies under five years old. The North East is fortunate to have

Through our quarterly business survey of entrepreneurs, we see businesses growing and expanding, with a very positive outlook for the future. So what has held back growth for the economy as a whole? It can be summed up in a number of reasons: • Lack of confidence, and people looking to consolidate their positions rather than risk growth

We see businesses growing and expanding, with a very positive outlook for the future

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opinion

• Getting to grips with information technology • Deciding how best to communicate and deliver your goods and services to a consumer that has changed their attitude to what they need, compared to five years ago • The challenge to live up to their quality and value expectations • A lack of relevant skills in the workforce pool - many businesses in the oil and gas industry are crying out for skilled engineers, the lack of which is holding back growth • Reluctance or inability to access traditional sources of finance and • Unwillingness to explore other options for fear of losing control. All these barriers to growth will continue into 2013 and beyond. However, those brave entrepreneurs who are willing to answer awkward questions about their business model, who go out and meet people, learn from others and improve their products or services to meet the pent up demand in the local, national and global economy, will grow their businesses to the benefit of themselves, their employees and the local economy in which they are based. That is why entrepreneurship is so important as a catalyst for growth, and why organisations such as the North East based Entrepreneurs’ Forum is so important to North East entrepreneurs and the local economy at large. n Nigel Mills is chairman of the Entrepreneurs’ Forum. To join the Entrepreneurs’ Forum, contact executive director Nicola Short on 0191 500 7780, or find out more at www.entrepreneursforum.net

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business support company profile

The first point of contact for businesses in County Durham Proactive support to the business community and the gateway to Durham County Council Business Durham, with the support of Durham County Council, promotes business growth and development, innovation and enterprise, and works closely with local businesses and partners to stimulate business activity in the County. Stewart Watkins, Managing Director of Business Durham, said: “County Durham is home to a large number of successful businesses from micro to multi-national global companies, with each playing an important role in strengthening the local economy. By working with partners in the private sector, Government, national and international agencies, Business Durham provides a focussed network that can make a significant difference to the business community and local economy.” Encouraging enterprise Business Durham works with partners to develop and promote enterprise and business start-ups in the County. It coordinates sector specific programmes such as ‘Developing Creative Industries’, a programme of workshops and mentoring to help creative businesses including designers, artists and media to start and grow, and the successful ‘Future Business Magnates’ enterprise competition. Open to all secondary schools in the County, each team is partnered with a local business to mentor and support them throughout the competition. Business Durham also runs a programme of innovation outreach activities that engages young people and local communities to promote science and technology.

High quality premises in County Durham. Developing businesses The team offers assistance to businesses by finding the right premises or land and helping to identify suppliers, customers and competitors. It connects local companies with local partners and works with NECC and UKT&I to promote international trade. Introductions can also be made to universities and research institutes. Business Durham provides services such as virtual offices, tender alerts and bespoke funding searches in addition to accessing County Council services such as planning, licensing and how to do business with the Council. Attracting investment and supporting innovation The North East Technology Park (NETPark) is a leading science park with a focus on electronics and applications in defence, medical and energy sectors. Companies on the Park can access support on market knowledge, facilities and technical equipment, funding opportunities and specialist events.

NETPark Net is a virtual innovation community which joins companies together through an on-line network and opens up the benefits of NETPark to every company in County Durham. NETPark is also home to the UK’s National Centre for Printable Electronics which is part of the UK High Value Manufacturing Catapult Centre. Providing business space Business Durham operates a number of the County’s business parks, industrial units and high-tech incubation units to support growing companies. By registering with www.businessdurham. co.uk you can access full details of all properties and development land on our database and receive updates when new properties become available. Business Durham has the right connections to ensure the smooth and trouble-free completion of any investment. Help and advice Business Durham has a team of professional and highly experienced staff with extensive networks and contacts. If you would like to find out how Business Durham can help your company please telephone 03000 261261 or e-mail enquiries@businessdurham.co.uk n

Keep up to date with all the latest business news by signing up to Business Durham’s daily newsletter at www.businessdurham.co.uk

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opinion

Give and take in employment law Frances Barker looks at the changes to employment tribunals ahead and the ongoing consultation on ‘modern workforces’ which companies will have to take in their stride Give and take seems to summarise the Coalition Government’s focus for 2013. Firstly, the Government intends to make settling employment claims easier and the employment tribunal process less attractive to claimants. Secondly, the trade-off for employees is that the Government wants to strengthen family friendly rights and flexible working. Tribunal reform: The stand-out reform is the introduction of fees for lodging employment tribunal claims. At present, there is no fee for bringing an employment tribunal claim, which many feel encourages spurious claims. From summer 2013, there will be fees for issuing a claim and for going to hearing. Relatively straightforward level 1 claims (e.g. for notice pay) will have a lower fee than more complicated level 2 claims (e.g. unfair dismissal). The fees are:

FEE TYPE

LEVEL 1 CLAIMS

LEVEL 2 CLAIMS

Issue Fee

£160

£250

Hearing Fee

£230

£950

Total

£490

£1200

In addition to the confirmed fees, the Enterprise and Regulatory Reform Bill 2012-13 (the Bill) is also going through Parliament. Although still in draft, this includes further proposals to change

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the tribunal process. For instance, a requirement on the employee to undertake pre-claim conciliation (through ACAS) before he/she can bring a formal claim. In addition to the Bill, the Government

should be extended to whenever an employer wants to discuss with an employee terminating employment. In hand with this, the Bill also introduces the concept of settlement agreements. These are a simplified

The Government intends to make settling employment claims easier and the employment tribunal process less attractive to claimants will launch separate consultation on a possible Rapid Resolution Scheme. This would involve quicker determination of low-value employment disputes on the papers only, determined by an independent person rather than a judge. Frank discussions and settlement: The Bill also proposes allowing protected discussions. The existing “without prejudice” rules protect certain discussions with employees, so that they cannot be used as evidence in a subsequent hearing. However, the existing protection is limited to when parties are already in dispute. So, often, employers fear being accused of forcing an employee out by starting discussions early when a dispute may not have arisen. The Bill proposes that the protection

version of the current compromise agreement. Family friendly rights and other developments: Separate from the Bill, there has also been consultation on ‘modern workforces’. This proposes a new system of flexible parental leave allowing parents to share between them 50 weeks of leave after a baby is born or adopted. The idea is that the parents will be able to choose how to divide leave, which could see parents off at the same time, subject to agreement with their employers. The combined amount of leave won’t exceed the total amount of maternity leave currently available. There is also a proposal to extend the right to request flexible working to all employees with 26 weeks’ continuous employment.

bq-magazine.co.uk opinion

business support

Other potential employer-friendly changes to watch out for are: (i) Simplification of service provision changes under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE); (ii) Reduction of the 90 day minimum consultation period for collective redundancy of 100 or more employees; and... (iii) Narrowing of protected disclosures under whistleblowing legislation, so that they only cover disclosures in the public interest. Give and take? Most employers are likely to welcome the reforms to the tribunal procedure, the concept of protected discussions and simpler settlements. However, the devil is in the detail and the extension of family friendly rights is likely to increase the burden on employers. From our experience, what most employers want is certainty. The wind of change is arguably blowing in the employerâ&#x20AC;&#x2122;s favour. But 2013 is likely to be less certain than previous years, given the extent of the changes proposed. n Frances Barker is employment solicitor at Muckle LLP.

What employers want is certainty. The wind of change is arguably blowing in the employerâ&#x20AC;&#x2122;s favour. But 2013 is likely to be less certain than previous years

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business support

opinion

Mission impossible Chartered accountants are saying that among the complexities of new financial rules ahead the new PAYE reporting system being introduced by HMRC is the one ‘impossible’ as Nick Lambert explains

Accountants are particularly concerned about the impact that the new requirements, known as Real Time Information (RTI), will have on smaller businesses. As a profession, we feel the proposals are at best unrealistic and, at worst, impossible. They create a new burden on businesses - and this despite HMRC publishing proposals to explain when employers will be allowed extra time to send in information to HMRC. PAYE is the system that HM Revenue & Customs (HMRC) uses to collect income tax and national insurance contributions (NICs). Currently, employers must deduct this from their employees’ wages and pay HMRC either monthly or quarterly. Under RTI, an electronic return will have to be made to HMRC “on or before” a payment is made to an employee. If the return is not made on time then the employer is potentially

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liable to penalties. While complying with the RTI requirements may be relatively straightforward for larger businesses, many smaller businesses will find it difficult and sometimes impossible to cope with. For example: • Firms employing low paid workers that have to receive advances of salary before payday to live. Under RTI the employer will have to submit an RTI return within seven days of an advance of salary payment. • A pub landlord calling in some extra help as he has a busy night ahead. Currently many such employers would only run their payrolls monthly. Under RTI they will have to do so within seven days of such payments being made. This is a significant increase in reporting obligations. The above examples show that the “on or before” requirement – even with the relaxation to “within seven days” - will not work for many businesses. It’s not yet clear what HRMC will do if faced with widespread non-compliance by employers. Will they apply penalties or turn a blind eye? Either way, the requirement could inflict serious damage to the credibility of the UK tax system. HMRC is now proposing extra time for employers in some cases. But this would only be an extra seven days. ICAEW (the Institute of Chartered

To help you further For more information or to find a local chartered accountant please visit www.icaew.com/northern. Start-ups and small/medium-sized businesses can also find help through the ICAEW’s Business Advice Service (BAS), which enables businesses to receive an initial consultation at no charge from an ICAEW Chartered Accountant: visit www.businessadviceservice.com

Accountants in England and Wales) has called for employers to be required to file monthly. The “on or before” rule, even as amended completely, ignores how the real world works. It will add significantly to compliance costs and burdens for many small and medium sized businesses. Even if all employers complied with the “on or before” requirement, it is difficult to see how HMRC could reconcile easily all the information it would receive. So we propose a single RTI return on the 19th of the month following the month of payment – this is the same as the normal PAYE due date, and will be familiar to all employers. n Nick Lambert is president of the Northern Society of Chartered Accountants.

bq-magazine.co.uk overview

business support

Do you really want to meet the taxman? New measures mean small businesses are becoming an increasingly easy target for HMRC, but fortunately help is at hand and there are breaks to be had for the region’s army of entrepreneurs Business costs are still rising ahead of inflation, albeit more slowly than in 2011. Energy costs are a major factor, and the Forum of Private Business reports about one in three business owners as being unable to pass rising costs onto customers, forcing them to cut their own costs to keep prices static. Call in the accountant – and especially as small businesses need urgently to check that their company records are in order if they don’t want to risk a face to face with the taxman. HM Revenue & Customs has resumed a campaign focusing on standards firms must adhere to in managing their business and financial information. The process was put on hold earlier this year due to concerns expressed across the finance industry about its fitness for purpose. John Richards, a tax specialist at North East accountants and business advisors RMT, points out that it has now been revised and relaunched. HMRC will now hold telephone interviews with a number of managers about their business record keeping, and will use the responses to assess whether a faceto-face follow-up is required. HMRC collected 40% more revenue in tax and fines from smaller businesses in the last tax year, as it intensifies its clampdown on tax evasion. Graham Purvis, partner at Robson

Tim Mallon: ‘Anyone can gain.’

Shirley Watson: Has insights.

There is generous tax relief for any business that can simply show they have introduced some form of innovation in their products and services Laidler LLP, another accountancy firm in the region, says: “Many smaller businesses just don’t have enough resources to deal with a tax investigation so demands for extra tax go unchallenged, making SMEs easier targets for HMRC than larger firms.” The good news though is that firms of all kinds can benefit from up to 225% tax relief. They don’t have to be

deeply into research and development. Tim Mallon, tax partner at Ryecroft Glenton, says: “There is generous tax relief for any business that can simply show they have introduced some form of innovation in their products or services.“ Bidding with Shirley A former bid manager who helped

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business support businesses in Northumberland to win over £30m worth of public sector contracts in three years now has her own new venture offering her expertise to businesses all over the region. The Tender Coach has been set up by specialist bid-manager Shirley Watson to guide SMEs and other private sector firms in applying for the many public sector contracts now available. She has more than 16 years’ experience of working in-house as well as with external businesses. For many years she worked on a BT bid team, latterly as a senior bid manager, then joined enterprise agency Tedco as in-house bid manager. One firm she advised secured eight out of 10 tenders it submitted. Businesses she has helped include marketing agencies, cleaning companies and taxi firms. No need to feel lonely Self-starter Jayne Graham is nurturing a small business that encourages other small businesses. From Washington, she promotes an online venue directory, SpaceonTap, that enables small businesses or lone workers to find office space when they need it occasionally. She says from experience that while running a business from home has many advantages, it can sometimes become a lonely environment. Many home based businesses never quite reach their full potential as a result, she believes. So she also runs occasional events enabling people to do their own work in the company of others similarly placed. This gives opportunities to network too. Jobs are spared A recent court case has shown the courts are prepared to issue substantial fines to companies found guilty of

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Phil Morrison: Sees a moral.

Corporate manslaughter carries a heavy fine and this should reinforce to companies the importance of Health and Safety in the workplace

corporate manslaughter – but not to the extent of jeopardising the jobs of the company’s employees. Phil Morrison, a specialist in construction law with Samuel Phillips Law Firm in Newcastle says: “In the case concerned, the fines reflected the individual company’s ability to pay without risking the jobs of those employed there.”

overview

A number of charges had been brought, combining corporate offences, and individual offences against the firm’s directors. Charges against the directors were eventually dropped and the company admitted the corporate manslaughter charge. Whereas the Sentencing Advisory Panel had recommended that fines for corporate manslaughter should represent between 2.5 and 10% of a company’s annual turnover, the court here imposed a lesser fine in light of the guilty plea, and also so as not to adversely affect the company’s business and the employment of its staff. Morrison says though: “It is now clear that corporate manslaughter carries a heavy fine. This should reinforce to companies the importance of Health and Safety in the workplace.” Measurable Management returns Robin Byrne has returned to his native North East to relaunch his management programme that has transformed leadership in the USA. Byrne, from Darlington, has entered a partnership with personal development business High Force Training, to roll out here Measurable Management, which was nominated for a United Nations peace award. He ran operations for Xerox in the North East before developing Measurable Management and implementing it with Arriva, NSK Bearings, Tarmac and Darlington & Durham Fire and Rescue. An invitation from the University of South Dakota in 2002 took him to the USA, where it was taken up by the US Air Force, then American Airlines and Toshiba America. With High Force he is now running seminars in the North East again. n

Providing dynamic and proactive support to businesses in County Durham.

● Encouraging enterprise ● Developing businesses ● Attracting investment ● Supporting innovation ● Providing business space To ﬁnd out more about Business Durham and opportunities for business growth and investment, please visit the website or contact us: Northumbria House, Aykley Heads, Durham, DH1 5TS

+44 (0) 3000 261 261 www.businessdurham.co.uk enquiries@businessdurham.co.uk @_BusinessDurham

exporting In association with

Businesses generate around 30% growth on average after exporting for two years, according to one bankâ&#x20AC;&#x2122;s research. For many firms that must suggest a worthwhile pointer, surely, especially given the North Eastâ&#x20AC;&#x2122;s prowess in overseas trading, and the fact that a major programme of guided visits is being prepared for the coming months

bq-magazine.co.uk opinion

exporting

£14bn bandwagon ready for boarding It’s been another bumper year in exporting for North East businesses. And there’s a battery of advisers and opportunities at hand to guide many more companies regardless of size or activity to consider aboard the successful bandwagon. David Coppock explains

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exporting

opinion

Virtually any company can export its products and services – from single-owner operations to large corporations employing hundreds – and there are many opportunities for North East businesses The past year has been full of challenges for our region’s companies but, despite a dip in export figures during the quarter ending June 2012, the North East has still enjoyed another excellent export performance for the year as a whole. A record £14bn worth of goods and services have been exported around the world. While, over all, our overseas performance is strong, the number of companies involved in international trade is still relatively small. So we cannot be complacent. As part of the National Export Challenge our aim is to help create 500 new exporters in the region by 2015. Yes, 500. This will enable us to build on our achievements so far and will help

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companies grow, become stronger and more resilient. UKTI has a dedicated team of international trade advisers (ITAs) to offer expert help and access to a wide range of services that help firms reach new markets. And we have two new mid-sized business (MSB) ITAs who will be working exclusively with companies that have an annual turnover between £25m and £500m, to help push them to the next level of international success. In November, UKTI organised Export Week, a national initiative that provided hundreds of events across the country. We were delighted to welcome many new and budding exporters keen to find out how we can help them. More events and workshops are planned for 2013, covering everything from how to take your first steps into a

new market to more specialised events focusing on a particular market or industry sector. Our Market Visits programme also gives companies a chance to join a delegation of like-minded people, as they explore a market and meet potential clients face to face. During 2012 we also launched a programme of Export Insight Visits, giving new and novice exporters the chance to take part in a visit to one of 12 European countries for just £99. Here in the North East we’ll be organising an Export Insight Visit to Sweden in March. Others to follow will include Belgium, Czech Republic, Denmark, France, Germany, Italy, Poland, Ireland and Spain. Virtually any company can export its products and services – from single-owner operations to large corporations employing hundreds – and there are many opportunities for North East businesses. Last year more than 600 North East companies took advantage of the wide range of support services available through UKTI, and I would urge companies to take up the ‘export for growth’ challenge and contact UKTI to find out how we can help. n To learn more about the wide range of support services available through UK Trade & Investment to help your company succeed overseas call the North East International Trade Hotline on 0845 05 05 054 or email: enquiries@uktinortheast.org.uk. You can also follow on Twitter at twitter.com/UKTINorthEast. David Coppock is regional director for UK Trade & Investment (North East).

â&#x20AC;&#x153;Good design speaks any languageâ&#x20AC;?

Over the last 3 years our business has really taken off, developing brands for international clients in Europe and beyond.

We are now ready to share our expertise here in the North East, helping develop your business for home and abroad.

To see how we could help your business call: +44(0)191 305 5068 email: hello@surrealcreative.com or visit: www.surrealcreative.com Houghton le Spring - Tyne and Wear

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exporting

overview

Rich rewards of stepping out

Businesses generate an average growth of 30% after exporting for just two years, a Barclays check suggests. In the North East, exports can be as big as part of an oil platform or as small as a pair of socks. Capricorn of Kirkharle Courtyard in mid Northumberland was ticking along with a staff of three selling its mohair socks to 50 or so retailers. But now the Japanese have stepped in and owner John Monks has been overwhelmed and delighted by the

The North East’s export-hungry business community has much to thank Laurie Berriman, Emirates UK vice president, who is part of a team that has helped to forge a flourishing air link between the region and the UAE, which is the gateway to a number of lucrative markets across the Gulf.

growing demand from the Far East. The firm sources its mohair from angora goats raised locally. To help other firms avail of opportunities abroad, and at the same time take the North East’s export performance even further ahead, three of the region’s leading business support bodies are working together as a consortium. The trio sharing a £3.6m contract awarded by UKTI comprise North East Chamber of Commerce, RTC North and

the North East Process Industry Cluster (Nepic). Since last April they have been delivering export services across the region. UKTI is also working with Barclays to help small businesses right across Britain grow, with the benefit of export advice. The two are delivering a co-ordinated approach in helping businesses to trade abroad – from securing their first international customer to setting up an overseas operation. n

Businesses generate an average growth of 30% after exporting, stats show, while a new consortium is playing its part in boosting trade from the region

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exporting company profile

“GOOD DESIGN SPEAKS ANY LANGUAGE” How one North marketing firm has grown into a brand champion the world over Surreal Creative are branding experts based in the north east but with an increasingly international client base and perspective. We understand the potential of an idea and the work needed to turn that small note, into your big success story. If you looked at our own business five years ago it had a distinctly local feel, but for the last three years after a little Blue Ocean thinking, our business has really taken off and our outlook is now very much international. The UK has a fantastic reputation for creativity and we wanted to build on this to re-focus and grow our business by broadening our horizons and looking further afield. Now over 60% of our turnover comes from international clients based in the Eurozone and North America, and in the last 12 months we’ve improved GP by 10% and increased our head count by 40% as a result. We work with blue chip companies in global markets such as Sonae Industria, one of the world’s largest wood panel manufacturers based in Portugal, pharmaceutical and consumer health giant Johnson and Johnson across Europe, and Stryker one of the world’s leading medical technology companies based in North America. The number of companies successfully exporting from the north east is at record levels and exports remain vital for the recovery and future prosperity of our region. We understand how to break into new international markets and

The launch of innovus at Marta Herford, Contemporary Art Gallery, Herford, Germany. have a strong track record in communicating creatively and selling in different countries. We know from experience that exporting is not about simply translating a company brochure. It’s about local knowledge, understanding distinctive cultural variations, customs and subtle contrasts in different markets. We’ve designed exhibitions for use at trade fairs from Berlin to China, launched major new brands in Canada and North America and work with market and brand leaders across Europe. We can help you to successfully expand your business by broadening your horizons and reaching out to new and emerging markets. Our air miles and international credentials don’t mean we aren’t just as keen to do business at home though. We’ve expanded our team so we can do just that.

From creating new brands for the micro-brewery, Sonnet 43 Brew House in Coxhoe and scrumptious food emporium Mrs Mustard in Durham we’re just as keen to help communicate your message in the freshest and most prolific way to the largest possible audience. Kindest regards - Cordiales salutations - Melhores cumprimentos - Cordiales saludos - Mit freundlichem Gruß as they say? n

To see how we can help your business at home or further afield visit www.surrealcreative.com, give us a tinkle on +44 191 3055068 or why not pop in for a coffee.

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built environment In association with

There are vital issues over commercial property and the built environment in the North East. Need of a central structure that can pitch more cohesively for inward investment, ongoing flaws in infrastructure despite the Autumn Statement, housing famine, and a rates revaluation hurtful to the region if it goes ahead. Challenging times indeed

bq-magazine.co.uk opinion

built environment

Inward investment hunt hobbled The weakness of the North East’s commercial property offering threatens its strength to compete with other parts of the country for inward investment. As experts warn, it also shows urgent need for a central contact point, absent since the demise of One North East G9 Group of commercial chartered surveyors, formed out of anxiety for the North East’s future capabilities in bidding for inward investment, says that in a vacuum left by the abolition of One North East regional development agency (ONE) a positive start has been made by its successors but there is still some way to go. Enquiries by possible inward investors could now be fielded by a number of bodies including North East Local Enterprise Partnership, Tees Valley Unlimited, NewcastleGateshead Initiative, local authorities and organisations formerly recognised as ONE’s sub-regional partners. ONE was scrapped by the Coalition Government immediately after it came to power. Now G9 gives an assessment rate of 35% for the region’s performance during the past year, against a possible 100% excellent. G9 comprises top representatives from: BNP Paribas Real Estate, DTZ, Gavin Black & Partners, GVA, Jones Lang

There is much still to do as we adjust to the changed marketing approach for inward investment in the absence of One North East, and the acknowledgement that the region needs to attract inward investment LaSalle, Knight Frank, Lambert Smith Hampton, Naylors Chartered Surveyors, Sanderson Weatherall, Storeys Edward Symmons and J K Property Consultants. The group has sought to engage with a number of the bodies now responsible for inward investment, including the North East LEP, Newcastle Gateshead Initiative, Tyne and Wear Development Company (Twedco), Business Durham, and the councils of Sunderland, Newcastle, County Durham and South Tyneside. They conclude that a unified approach is lacking, compared to set-ups in some other parts of England and in Scotland. For the region, they

say, enhanced financial inducements available elsewhere amount to a serious issue. With the public sector led inward investment process scoring just 35%, a fragmenting response is perceived, also a lack of expertise and co-ordination with the private sector, represented by the region’s chartered surveyors. The absence of the unified approach evident in Scotland, the North West and powerful city regions such as Leeds and Manchester, all of which are “well ahead of the North East in terms of marketing profile”, is particularly troubling. Gavin Black, chairman of G9 and a partner at Gavin Black & Partners, says the first year of G9 proactively sought to engage with the many now involved in inward investment and job creation, to assist in attracting businesses to the region. “We have addressed the issues in depth,” he said. “There is much still to do as we adjust to the changed marketing approach for inward

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built environment investment in the absence of One North East, and the acknowledgement that the region needs to attract inward investment. G9 members have pledged support through expertise, especially on identifying strategic sites, and delivering property advice to those engaged in the regional economy. But the closure of ONE highlights the need for a co-ordinated approach by both the public and private sectors, working together through the local authorities and NELEP, to restore our position on the global inward investment stage.” He sees several strengths that the North East can major on including our manufacturing base, good demographics, cost-effectiveness and lifestyle. Working against that G9 sees a number of issues, including: A need to retain information and data assembled by ONE and Twedco A need for a full schedule of available sites and buildings to aid inward investment enquiries Concern over funding issues related to speculative development in the region of both offices and industrial premises During 2013 industrials are expected to be the strongest segment of the North East’s market. The commercial chartered surveyors point out that manufacturing and engineering businesses here are already strong, and that the region is the only net exporter in the UK. This performance is driving demand for space with shortage of stock likely in some areas, they warn. Nissan continuing to stoke supplier

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demand, along with the imminent start of Hitachi Rail Europe’s coachbuilding at Newton Aycliffe, will combine with the oil, gas and renewable sectors to guarantee estate business, in their view. But their overall sentiment rating for commercial property in 2013 is a cautious 52% - a reflection of ongoing funding issues, developer inertia, falling values, low occupier demand and general market fragility. Too many elements of the “perfect storm” of 2007/08 remain, they say, with the Eurozone still dampening shortterm confidence. So they expect offices and retail to remain challenged, though there is little Grade A space in either sector overhanging the market, which could offer opportunity for refurbishments and renovations. G9 say barriers to development centre on low occupier demand, falling rental levels and shorter lease lengths making it hard to source the money from investors in support of new development other than by pre-let. For occupiers there is lack of confidence

opinion

Our role in 2013 is to emphasise the need for strategic sites and premises data to be assembled and made available, and to continue to talk with our colleagues for the betterment of the region based on their own cost pressures, uncertainty about the UK economy, increasing occupational costs on the back of rising energy and fuel costs, high business rates, and a shortage of bank lending. So it looks as if development will remain a slow process centred on the bespoke. This would inevitably lead to a scarcity of high quality new supply and thus reduced options for occupiers - including new to the region inward investment vital for the regional economy. Black concludes: “Our role in 2013 is to emphasise the need for strategic sites and premises data to be assembled and made available, and to continue to talk with our colleagues for the betterment of the region.” n

bq-magazine.co.uk opinion

built environment

All in this together Still unconnected to the nation’s motorway system, and so far largely unconsidered in ultimate rail plans, the North East must make its voice heard and is doing so, says John Jeffrey

John Jeffrey: We will continue to speak up for the region. Ours is the only region without motorway links to other parts of the country, and plans for the new HS2 rail network see us once more out on something of a limb. We do have a number of significant strengths, with ports and airports, the new Tyne crossing and, despite the lack of a high speed rail plan, the East Coast Main Line and our position on the Trans Pennine route. However, with the potential economic gains to be had from improving our connectivity with the rest of the UK, it is worth risking a sore throat to continue raising our voice and keeping our region’s infrastructure needs aired. And indeed the need for improved infrastructure in the North

East - and its potential value to the regional economy – has been a key issue upon which the Institution of Civil Engineers has directed its campaigning in recent years. In 2012, we decided it was time to amplify our voice further, and we entered an infrastructure coalition with regional colleagues at the Association for Consultancy and Engineering (ACE) and the Civil Engineering Contractors’ Association (CECA). As well as launching our joint report on infrastructure in February to influencers including MPs and the region’s Local Enterprise Partnerships, effectively announcing the working relationship, we have held combined events and shouted our message from the rooftops. The strength in numbers and additional weight behind the voice has been noted. So far, the regional media has picked up our joint message, enabling it to reach a wide audience, while two MPs spoke at the partnership’s recent conference on the subject. We further bolstered the case with our ICE regional publication Growing It Alone: Supporting Economic Recovery through Transport Infrastructure. North East civil engineering firms employ 50,000 people, with a strong focus placed upon skills development, not only of the existing workforce, but also within

schools, colleges and universities. We are excellently placed to grow this workforce, meet the region’s needs and boost the economy on a number of fronts. But this cannot be done without drive from regional and national decision makers. A regional policy document on transport is also being developed for launch in 2013, which aims to ensure the region gets the transport infrastructure that it really needs to support economic recovery. When this is ready for publication, you can be sure that we will once more make ourselves hoarse getting that message out. We will continue to shout and we speak not only for civil engineers, but for what our industry and infrastructure mean to this region. And we will continue to strive to find new ways to work within the new political landscape across the North East in this post-RDA era. As the Growing It Alone report concludes: “Those regions that show the courage to prioritise and the conviction to deliver will be the areas that benefit from the current position and really start to deliver the infrastructure necessary to support economic recovery.” n John Jeffrey is chairman of the Institution of Civil Engineers (ICE) North East.

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Working hard, getting lucky Times may be tough for developers but North East-based Esh Group continues to unearth new opportunities as it moves into 2013 It’s difficult to find new words to describe current trading conditions; perhaps best just to say ‘we’ve known better’..! Yet at Esh Group we try to make sure we stay realistic and optimistic. It’s a good combination. We know what we’re good at, we try not to leave anything to chance and we work hard to find new opportunities to do more of what we are good at, wherever and whenever we can. Throughout last year we constantly looked out for suitable opportunities whilst keeping a ‘firm hand on the tiller’. In 2012 we’ll be sticking to the same strategy - it’s a good plan that’s delivering results. We’re finding work further afield than our traditional North East base and we now have significant operations in both Yorkshire and Cumbria. From our Durham headquarters we work closely with our teams based in our offices in Leeds and Kendal where we are making excellent inroads with our Esh Construction brand. As we enter 2013 we’re building on some great successes achieved across the business. Esh Property Services operates in the social housing sector where fundamental change is taking place. This has created an environment where it is being said ‘only the best will survive’. So when we were confirmed the first private sector partner in the

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Wat-er success: Steve Wilkie (left) managing director and Ross Markwell (right) business development manager, with the North East Project of the Year Award that Lumsden & Carroll has won for its unique and empathetic building of a marina within Seaham’s 184-year-old harbour. country by the Homes and Communities Agency we were very proud. The £10.4m grant awarded under the Government’s Affordable Homes Programme 2011-15, was the first and largest of its type to be ratified nationally; representing almost 6% of the total funding allocated to the North. As a result we’re delivering over £61m of contracts, building 541 affordable homes with our partners Northumberland, Tees Valley, Durham and Cumbria. Lumsden & Carroll Construction’s team is striding into 2013 with a spring in its step on the back of winning Project of the Year at the Civil Engineering Contractors Awards for its unique project at historic Seaham Harbour. This scheme showcased the wide range of expertise in this business in a really challenging environment. Delivering civil engineering services throughout Yorkshire, the North East and Cumbria, Lumsden & Carroll holds framework contracts with Northumbrian Water, Yorkshire Water and the Environment Agency. Through Lumsden & Carroll we’ve seen a recent slight upturn in demand for our house building infrastructure services – hopefully a good sign for 2013. 2013 will see our commercial build company, Esh Build, complete a £5.5m contract to design and build a new construction skills training centre at

Lakes College, near Workington continuing an educational theme as the team finished Dame Allan’s new school in Newcastle upon Tyne in time for students to start in the current academic year. High-street retailer, Boots, Northumberland County Council, Northumbria Police, South Tyneside College and both Leeds Metropolitan

suppliers and people in the communities local to our work; that’s the Esh Group way. We are also expanding our engagement schemes within education, communities and with disadvantaged people for which we are renowned, bringing them into Cumbria and Yorkshire as well as the North East. So, we’ve got a great base to build on

2013 will see our commercial build company, Esh Build, complete a £5.5m contract to design and build a new construction skills training centre and Leeds Universities now look to Esh Facility Solutions for planned and reactive maintenance support. And we’re expecting to see a significant upswing in demand for our renewables technology expertise in 2013. Running alongside all of our businesses, everywhere we’re appointed, are our business policies and activities which underpin our culture; employing

and we’re cautiously optimistic for 2013. We’re sticking to what we know and we’re working hard, not leaving anything to chance. We’ll keep working to stay ‘on top of our game’, mindful of the famous words of the great Gary Player, ‘the harder I work, the luckier I get’. They seem like wise words to take us into the New Year. n

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Squeezed till the pips squeak Commercial property players are still reacting to a surprising Government announcement around business, rates which they believe could have a major impact on the North East in the next two years An unexpected announcement by the Government that the next English Business Rates Revaluation will be deferred has surprised commercial property circles, especially because of its implications for the North East. The proposal, within The Growth and Infrastructure Bill, will heavily impact on the level of business rates from 2015. While nationally some commercial property occupiers and owners will benefit from the delay in using updated values subsequent to 2008, many will remain at levels unrepresentative of market value changes. With regional values in some property sectors undergoing significant downward price adjustments in recent years, the basis of an annual rates charge continuing until 2017 using 2008 values will be unwelcome compared to the intended 2015 revaluation using 2013 values. The postponement now is aimed at preventing unexpected hikes in business rate bills by providing certainty of business rates linked to inflation until 2017, and a greater ability to provide certainty for businesses to plan and invest. Property experts cite in reply a failure to mention it will also prevent potential business rate falls from 2015. This, they feel, conflicts with a revaluations purpose of redistributing business rate levels to reflect more up-to-date rental market changes. While total revenue generated

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Paul Davinson: Effect will be significant. following a revaluation may not change, the realignment to updated values ensures that business rates more closely correlate with property value changes. Many regional firms were likely to be major beneficiaries of the next revaluation as their rents will have fallen further in relative terms than the average falls across the wider economy. For those paying business rates in areas of falling value, there will be little comfort to those effectively subsidising those properties in increased value areas. Every five yearly revaluation over the last 20 years has ensured that in areas of declining property values, annual business rate costs for many have reduced. Given the movement in property values from 2008 onwards, deferring the revaluation prohibits

any opportunity for business rates to readjust to market values for an additional two years. Paul Davinson, head of Jones Lang LaSalle’s business rates team in the North East, believes that regionally the effect will be significant. North East office and retail values in many areas have decreased significantly in recent years, he points out, with many expecting business rate levels to reflect this from 2015. He says: “From a development perspective, anyone intending to bring new supply to the area in coming years will have to budget for business rates at a level that could affect prospective rental income levels, landlord’s vacant rate liabilities and development feasibility. So, for the very businesses that should have benefited from revaluation, the result will be two more years of hardship. “As ever, the need for occupiers and landlords to consider levels of business rates and any opportunities to minimise this cost is paramount. This is particularly so with current assessments forming the basis of rate costs for up to seven years if the Government’s proposal is approved.” While the proposals are still subject to parliamentary approval, it is expected most of the regional commercial property industry will face a backward step in terms of reflecting the substantial market changes endured. n

Leading the way In constructing communities Esh Construction is the multi-disciplined “one stop shop” construction division of Esh Group. We have delivery arms for building, refurbishment, historic restoration, housing & regeneration, civil engineering and facility solutions. Our vision is clear. We see construction as dynamic, exciting and rewarding. Our business directly employs around 1,000 people and Esh Group’s turnover in 2011 exceeded £170m. We have regional offices in Durham, Leeds, Northumberland and Kendal. The communities in which we work are supported through our ‘Added Value’ approach. Our people are our strength; we succeed and achieve through their experience, commitment and training. In short, Esh Construcion delivers. To find out more please visit: www.eshconstruction.co.uk

training & recruitment Itâ&#x20AC;&#x2122;s the North East that seems to be leading the jobs recovery this time. Manufacturing and offshore hirings set the pace. Some of the highest pay rises are in smithy and forge work, and in the market for psychologists. Apprentices deserve their place in the scheme of things too

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Some pick-up looks likely With the region currently showing the highest increase in employment there may be reasons to feel more cheerful, says Mark Simpson

Generally 2012 has been a tough year for the region, with market conditions remaining uncertain. In recent weeks, however, there have been some positive signs of change. The latest ONS Regional Labour Market Statistics report confirmed the region experienced the largest increase in employment in October. Manufacturing and the offshore fabrication sectors, in particular, are intrinsic to the gradual turnaround of the regionâ&#x20AC;&#x2122;s fortunes. The services sector is also expected to start improving, as companies begin to invest in upskilling the workforce. Building on the 25 year foundation we have in the North East, this year our

company has reinforced long standing relationships with key businesses and industry sectors, while establishing new ones in emerging, growth industries. Regardless of tough trading conditions, we achieved record revenues during two separate months. This was due to the calibre of our teams, also by strengthening our market position in a number of disciplines and sectors, through some significant new hires. Some of the industries we shared continued success with this year have included subsea oil and gas, capital equipment, automotive and aerospace, as well as engineering, manufacturing, technology and social enterprise firms. The subsea oil and gas market is particularly buoyant and manufacturing SMEs have also enjoyed record export growth. As a trusted recruitment partner to the these sectors, we have supported businesses with executive leadership and management recruitment, as well as building the capability of those companies going through private equity management buy-outs and acquisitions. The third sector has also been an area of growth. We have worked with charities and social housing and higher education organisations, helping them to manage through a significant period of change and transformation. Our role has been at the chair, NED and executive board level, and this

is a service we expect to continue growing next year and beyond, across all sectors. The senior HR market for oil & gas and manufacturing, as well as FMCG and technology companies, has been fairly strong over the last 12 months, with businesses looking to drive improved performance through people strategies and by hiring HR professionals to guide them through restructures. In the main it has been technology businesses that have been recruiting IT staff, but a gradual escalation of software development projects, across a variety of sectors, has seen a slight increase in demand in other sectors. In terms of finance and accounting skills, the big demand is in manufacturing, for people with experience of working in the industrial sectors. Newly qualified accountants from the Big 4 are still coveted by businesses in the region, while the interim market remains fairly healthy, as firms look to bring in high quality people on a less permanent, lower cost basis. There is still a low demand for finance expertise in the retail and services sectors, but this is likely to pick up as we move into 2013. n Mark Simpson is group executive director of Nigel Wright Recruitment.

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Hang on to that talented team Today’s apprentices can be tomorrow’s titans of industry so that’s why they have to be nurtured, says Brian Nicholls Certain titans of North East industry have something in common: David Land, for example, and Steve Pearson. Land runs the Newton Aycliffe automotives firm Tallent outstandingly. Pearson has built at Billingham perhaps the fastest growing provider of services and solutions in managing information for offshore engineering. Both started out as apprentices. Pearson at 16 was the only instrument technician at ICI service works. His firm, Pearson-Harper Ltd, now thrives on Teesside and in Australia, due to “inertia” and an “unyielding” culture he found in giant corporations, which drove him to become his own boss. Land, 23 years an automotives man - since leaving school - has opened a fifth plant for Tallent at Newton Aycliffe despite the trough motor manufacturing suffered earlier. He also goes into local schools to sell the idea of apprenticeships. While accountancy and fast-track career schemes also have their place in nurturing future executives, the tested and proven path of apprenticeship will remain important, especially in industry, and especially since principles and programmes have been updated. However, Unionlearn – the learning and skills arm of the TUC – is concerned that not all apprentices have been paid a legal entitlement, and receive other obligations. The Government is onto

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this, though. A new apprentice pay survey in 2013 should show whether the situation has improved. An earlier check showed nearly one in five apprentices were not getting just dues, and 5% were not being paid at all. The Department for Business, Innovation and Skills has already called for urgent improvements to apprenticeships. An investigation into how extensively unpaid internships are misused as prolonged cheap labour sources might also be appropriate. Adrian Bailey MP, who chairs a BIS committee, believes many apprenticeships need closer scrutiny, monitoring or reform. “We have heard

evidence of excessive profits at public expense, of a Government paying out too much far too easily, and of a lack of genuine value for money in apprenticeship schemes. This is unacceptable,” he says. Instances have been reported in the North East of young people fulfilling pre-apprenticeship training courses satisfactorily only to learn no apprenticeship exists at the end. Workers at all levels are surely entitled to fair treatment. Understandably, then, the Government has rubbished Adrian Beecroft’s proposals on firing people. The multimillionaire venture capitalist and

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steam train geek wants to see no-fault dismissal, a policy that - one newspaper feels - coincides with his interests in Wonga, the moneylender whose charges are in the headlines, along with its impending sponsorship of Newcastle United. Business Secretary Vince Cable has instead announced alternative employment reforms that still promise improved flexibility in the labour market, and make it easier to dismiss unsatisfactory employees. This includes reduced compensation and voluntary agreements to avoid tribunals. However, the Chartered Institute of Personnel and Development - the world’s largest chartered HR and development professional body - warns that all this should not be used in such a way as to undermine mutual trust and confidence between employers and employees. It adds up ethically and economically, given the cost nowadays of training replacements. Poor performances can often be traced back to uninspiring management as well as unresponsive employees. Blyth engineers Tharsus, recently commissioned to design a custom-built frame enhancing a well known athlete’s performance, finds that stimulating projects motivate engineers more. It is up to managements to provide those projects. Some firms might evade such controversies by hiring suitable freelancers instead of staff. An NOP survey for Freelancer.co.uk, the world’s largest online outsourcing marketplace, found that among 1,600 small businesses 60% preferred to hire a freelancer, finding them more flexible and with key skills when the business needed them. Only 12% of respondents worried about the cost of dismissing new employees if things go wrong. Around 40% said that for the same money

training & recruitment We have heard evidence of excessive profits at public expense, of a government paying out too much far too easily, and of a lack of genuine value for money in apprenticeship schemes. This is unacceptable spent on one employee, they could hire a range of freelancers. But what about confidentiality? Freelancers could later help out the competition and pass on a previous client’s trade secrets. Perhaps one way to keep staff – and management – on their toes is to encourage online games in break times. This can benefit learning behaviours at work, and sharpen leadership skills, researchers at Newcastle University Business School and the University of Crete say. Ups and downs of salaries There are jobs to be had out there, and some even with salaries that have increased over the past year. Information from the Office of National Statistics (ONS) suggests that vacancies with rising rewards may be found in: Smiths and forge workers - up 35.9% (average pay £24,549). The biggest rise of all the career categories detailed in the research is psychologists - up 23.3% (average pay £40,276). Needed in the NHS, private healthcare, education, counselling, the armed forces, sport and in some businesses. But it takes, on average, seven years to qualify. Rail and rolling stock builders and repairers - up 15.6% (average pay £38,711). Hitachi may offer opportunities at Newton Aycliffe. Fishmongers and poultry dressers - up 13.9% (average pay £16,531). Chief and other senior executives 11.8% (average pay £85,223). Average for the ruling classes rose to more than treble the national average wage in a

year. There might be bonuses, share options and benefits on top. Nice work if you can get it. Jobs with diminished prospects are: Social and humanities scientists, wages down 21.4% to a below national average wage of £23,447. Advertising was down on average 18.8% to £32,458. It’s looking perkier in the North Good news along with the fact that unemployment is falling generally is that the growth of permanent placements, now at its highest for 19 months, is proving strongest in the North. A report by the Recruitment & Employment Confederation and KPMG shows strong demand from the private sector offset weaker demand in the public sector. Temporary job placements have also been rising, and at their fastest since March 2011. Demand was seen across most sectors in bar hotels and catering, which saw a small reduction in permanent placements. Engineering and construction sectors had the strongest offer in permanent jobs. Nursing and medical sectors continued to top the temporary posts. One for the pot A £150m pot of funding has been announced by Skills Minister Mathew Hancock for a second round of the Employer Ownership Pilot. This enables employers to create training schemes they need to grow their firms in partnership with their employees, agreeing together the skills solutions they require for their specific needs. n

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conferencing & hospitality Tyneside climbs the ranks as a conference centre. County Durham is mixing it with Cornwall and the Lakes. Northumberland cashes in on location. And Teesside is getting a four star hotel. Itâ&#x20AC;&#x2122;s an active, albeit hard pressed, industry at times

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We’re all in it together, then With big spending cuts taking effect, a commitment to working in partnership locally, regionally and nationally has never been more important to the success of tourism in the North East, says Sarah Stewart

Year 2012 has been one of contrasts - from the high of the London 2012 Olympics to the low of a recession that continues to affect business up and down the country. We have all had to tackle challenges head-on and grasp every opportunity. The Olympics created a buzz of enthusiasm and pride nationally. In Newcastle and Gateshead we welcomed the Games, like everything else, and saw images of our icons beamed to a global audience - Olympic

football at St James’s Park, Olympic Rings on the Tyne Bridge and Bear Grylls’ daring zip wire descent onto Gateshead Quays. All this gave the opportunity to celebrate on Tyneside, its sporting legacy and cultural attributes. For the conference industry, hosting the Games reinforced our credentials as a great venue for both business and leisure, since it provides a stunning backdrop, and since a professional approach to partnership working means the experience we deliver is second to

none. Our Convention Bureau works with NewcastleGateshead Initiative’s 170 private sector partners to attract large conferences and meetings to the North East. This collaboration, and hard work of the meetings industry locally, was recognised in May by the International Congress and Convention Association when it ranked NewcastleGateshead above Liverpool, Leeds and York as one of the UK’s top 10 destinations for holding international conferences.

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Getting around: When conference business is over, thousands of delegates who come to Newcastle and Gateshead yearly like to see what else the destination has to offer.

Looking ahead: Today’s plans when effected should enable Tyneside to hold even bigger national and international conferences. In attracting global conferences we welcome thousands of international delegates every year. Besides the business side, they explore all the destination has to offer – museums and galleries, castles and coastline, bars

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and restaurants. It’s important to attract increasing numbers of overnight visitors, for a large portion (86%) decide to return with friends and family. The number of new hotels opening

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in Newcastle and Gateshead (eight in two years) is a huge vote of confidence in the destination by developers and operators. Ramada Encore, Hotel Indigo and the apart-hotel Roomzzz all opened during 2012, adding to the variety of accommodation options on offer to visitors with differing budgets. Despite the number of new hotels (and more are coming, including the Crowne Plaza in the Stephenson Quarter), hotel occupancy has remained strong across Newcastle and Gateshead, averaging 84% at weekends. Nationwide, we have seen significant cuts to the public sector and local authorities are faced with increasingly hard decisions. In November it was announced that Newcastle City Council would be cutting funding to a variety of services, including that given to NewcastleGateshead Initiative by 34% over the next three years. The funding received from Newcastle City Council represents one of many sources of income, and the cut in funding next year is equivalent to under 5% of our annual budget. Work done by NewcastleGateshead initiative to promote the destination to visitors, to secure major conferences and attract inward investors – alongside our awardwinning cultural programme – all contribute to the growth of the local economy. Looking ahead, our commitment to working in partnership locally, regionally and nationally has never been more important. We will continue to work closely with both Newcastle and Gateshead Councils, while building on our success in securing private sector support from an already strong partnership base. Regionally, the NewcastleGateshead Initiative is part of the Northern Tourism Alliance, together with

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conferencing & hospitality

Northumberland Tourism, Visit County Durham, Hadrian’s Wall Trust and the North East Hotels Association. We meet regularly to highlight the challenges and opportunities open to tourism businesses across the region. We are committed to collaborating wherever we can. As a member of the VisitEngland board, I am well placed to understand and react to changes in the national political and economic landscape. I can ensure VisitEngland is aware and responsive to challenges facing destinations, such as NewcastleGateshead, around the country. Our relationship with the national tourism body has never been stronger. In August, we secured

Working together for the greater good A good example of where local collaboration can positively impact on the economy is in the proposed development of a cultural and conference centre beside The Sage Gateshead. The £30m project is spearheaded by Gateshead Council in partnership with Arts Council England which, in March, handed the project vital stage one approval towards a £10m funding boost for the project. It is still at an early stage. But, together with The Sage Gateshead, we are supporting the plans that will provide much needed flat floor space to complement the venue’s current facilities. funding through the Regional Growth Fund via VisitEngland, bringing an additional £500,000 towards our citybreak marketing campaign until 2015. A creative and open approach to partnership will be critical to the ongoing growth of

NewcastleGateshead, enabling us to attract economy boosting inward investment, conferences and business tourism, and leisure visitors. n Sarah Stewart is chief executive of NewcastleGateshead Initiative.

Conferences are big business in NewcastleGateshead Not only do NewcastleGateshead conferences have a major economic impact, delivering over £100m annually, but they also showcase NewcastleGateshead.

Convention Bureau

If you’re a member of a professional society, institute or association, you can become a ‘Conference Ambassador’ and help NewcastleGateshead Convention Bureau bring your organisation’s conference to NewcastleGateshead. You provide the business expertise, industry knowledge, a network of contacts and programme ideas. We provide high-quality bid documentation, expert knowledge and unbiased advice, and support throughout the process - free of charge. Together we can create a first-class proposal giving your bid the best chance of success.

To discover how easy it is to bid for an event, contact us today: call +44 (0)191 440 5757 or email conventionbureau@ngi.org.uk

NewcastleGateshead.com/ambassador

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Beating Cornwall and the Lakes Despite a difficult year for business and tourism venues across the country, the visitor economy in County Durham continues to blossom, says Melanie Sensicle

The Diamond Jubilee, Olympics and Paralympics were held up as great opportunities for tourism in 2012 great adverts for Britain, though more mundane factors had the greatest influence on tourism, certainly in Durham. Lack of business confidence meant the long awaited bounce back in the conference and meetings industry was slow, while three months of rain and a continuing crisis of confidence among consumers made the year daunting for hundreds of small tourism businesses. A wet spring and summer, combined with tight family finances, can seriously affect bookings and footfall, and they certainly had an impact right across the county. Durham is a recent tourism success

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story, showing steady 13% growth since the early noughties. So although the year was particularly difficult for non-serviced accommodation and small visitor attractions, there were bright spots. Beamish Museum again bucked the national trend for declining visitor figures, exceeding half a million by summer’s end. The corporate market showed tentative signs of recovery and helped prop up occupancy in our larger hotels. National attention arrived via success at VisitEngland’s national Awards for Excellence. Durham took two high profile awards as Rockliffe Hall scooped top spot for large hotel of the year and Beamish won best large visitor attraction - pretty good for an emerging destination up against the likes of Cornwall and The Lakes. In 2013 Government policy may start to impact more directly on the county’s visitor economy. It would be positive if the sector’s lobbying for a lower rate of VAT gained ground. This would put British tourism on a par with our European competitors who enjoy levels as low as 5%. Less positively we may start to lose bed stock if changes to planning policy allow more hotels to convert to homes. Any increase in taxes on air travel could also weaken the country’s competitive position in the overseas market.

However, the future looks exciting. The year kicks off with our largest ever national marketing campaign highlighting Durham’s strengths in walking, cycling and heritage. From Easter the county’s cultural programme will ensure that Durham is constantly in the public eye and worth a visit, starting with Beamish’s Great North Steam Fair. Then it’s non-stop through the Bishop Auckland Food Festival, the Lindisfarne Gospels Exhibition and the first ever Ashes Test match in Chester-le-Street until we arrive breathless in November at Lumiere 2013. Along the way Visit County Durham will launch a new customer service programme, Welcome to Durham and will be entering the fourth year of Taste Durham, our quality food programme. Britain’s visitor economy has shown enormous resilience over the decades. Whatever is thrown at it - terrorism, disease, taxes - it bounces back. In the depths of the most serious economic crisis for a century, will it yet again prove its strength? I believe so. One of the last things people are willing to give up is their holidays. n Melanie Sensicle is chief executive of Visit County Durham, the destination management and marketing agency.

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conferencing & hospitality

A county that keeps it fresh While Northumberland’s most prominent venues are steeped in history, the people running them are very much focused on the future, writes Jude Leitch Conferencing and hospitality did well generally in Northumberland during 2012. While the county doesn’t have a large number of hotels and conferencing facilities, those we do have are of high quality and can offer the corporate guest something a little different. Overall, the story is about investment with hotels such as Longhirst Hall, Doxford Hall and Spa, Close House Hotel & Golf Club and Eshott Hall investing in refurbishments, larger meeting spaces, high quality catering and team building activities. Close House Hotel & Golf intends to invest more than £1m in the next 12 months. Investment in people is also evident with all the hotels mentioned above recently welcoming new, highly experienced managers. They are also attracting talented staff such as Konrad Sliwinski, Longhirst’s new awardwinning head chef, and the new concierge at Close House, Chris Main, who aims to anticipate guests’ needs and ensure a service beyond their expectations. Location has proved important to Northumberland’s hospitality providers, for the county is proving popular with national companies holding regional meetings. Proximity to Newcastle Airport, the East Coast Mainline and the A1 work in the county’s favour. Quality and flexibility, of course, plays a key part in the county’s continued

success, with customers appreciating bespoke hospitality packages and opportunity to combine meetings and conferences with teambuilding exercises - also quality local cuisine. International corporates also enjoy the nearness of iconic attractions

like Bamburgh Castle, Hadrian’s Wall and Alnwick Castle and Gardens. All these strengths are also attracting growing numbers of people into Northumberland for their weddings. Longhirst Hall recently scooped the prestigious North of England Wedding Award for outstanding customer service. Doxford Hall and Spa has built a strong base of regular, repeat corporate business by offering value for money, combined with quality and high levels of customer service.

Close House Hotel and Golf, already well supported by the local business community, enjoys international appeal highlighted by their association with golfer Lee Westwood and international champagne brand Moët. There certainly can’t be many places that businesses can choose between the prestige of a Moët tasting evening under the grape vines in Close House’s luxurious Orangery, or the unique local flavour provided by a bespoke visit to the nearby Matfen Brewery that produces its special brewed No19 bitter. Obviously 2013 will present challenges as the economy continues to languish and businesses cut their travel, training and corporate hospitality budgets. Eric Kortenbach, general manager of four luxury hotels including Doxford, Eshott and Guyzance believes there is an opportunity in the incentives market, targeting the UK, Europe and the USA, and offering unique or exclusive packages. At Close House Hotel and Golf they will continue to “keep it fresh” in 2013, with new hotel director Peter Llewellyn believing that keeping their offer lively and different - and providing opportunities for corporate customers to combine fun and quirky activities with business meetings - will ensure continued success. n Jude Leitch is tourism development manager, Northumberland Tourism.

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Who’ll pick up the compass here? Funding shortages and the weakening of a once powerful marketing champion have left Tees Valley in danger of missing out on visitor opportunities. As Brian Nicholls reports, however, it’s not all doom and gloom on Teesside Of all the North East areas promoting conferences and tourism, Tees Valley looks the one most harried by a cash crisis just now. Until it folded earlier this year – with the demise of One North East and its backing - Visit Tees Valley promoted the area’s conference and tourism appeal. However, Tees Valley Unlimited, which ran Visit Tees Valley, passed responsibility to individual local authorities whose depleted coffers, they say, leaves little for investing in visitor promotion - even though it’s the sort of thing to bring investment in. Much depends now on latent internet publicity. Conferences and business meetings that could be held on Teesside are sometimes held instead in Sedgefield and elsewhere in County Durham. Visitor attractions are actually being run down in part in the scrimping. The Captain Cook Birthplace Museum has closed with a promise of reopening at the end of March. A cafe and public toilets are the only sign of life there. Dorman Museum, too, has revised opening times. And to remove uncertainty, what has been widely considered a really major visitor attraction, Middlesbrough’s fiveyear-old art gallery mima – the £18m Middlesbrough Institute of Modern Art - has required a pledge from the local mayor Ray Mallon, that it will not

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Cause for pride: Hartlepool is justly proud of it’s maritime history theme for visitors. be shut down while he remains in his elected office. The Arts Council recently raised its annual contribution to mima by 150% to £500,000 and Independent councillors of the town, angered that the gallery escaped funding cuts in an £11m package of council savings otherwise proposed, wanted a big reduction from the town. Estimates on the extent to which taxpayers subsidise mima vary from £1m to £1.5m. Hours of opening have been reduced and one job has been cut. The mayor in mima’s defence, says it impresses enough to have attracted more than £4m in external funding since its opening, and 37,000 visits are made yearly by people mainly or partly coming to Middlesbrough because of its presence. There is dismay and anger at Teesside’s

lack of co-ordination on Teesside itself. This is particularly so in Hartlepool, winner of a Best Tourism Event of the Year award from Visit England in 2010, after it drew 970,000 visitors spending £26.5m locally to enjoy a Tall Ships visit. Hartlepool is justly proud of its maritime history theme for visitors. Mayor Stuart Drummond says Tees Valley missed out on Regional Growth funding recently because it had nobody to bid for the cash. Tourism agencies elsewhere in the North East got around £1m from Visit England via the fund. The good news is that Middlesbrough is to have a new four star hotel, the inspiration of entrepreneurial retailer Steve Cochrane. He says more town centre accommodation is urgently needed, and he is getting every encouragement from Middlesbrough Council. n

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conferencing & hospitality

Weathering the storm Given the standards of comfort and hospitality guests enjoy in our hotels it’s hard to believe there’s a battle behind the scenes in some. But there’s a strong resolve to ride out the difficulties too, says Brian Nicholls There’s upheaval and uncertainty in the hotel industry nationwide, with administrations, receiverships, sell-ons and - sadly yes – closures, all of which North East managements, as those elsewhere, must cope with. Fortunately, effects to date in our region have been less damaging than might have been. For example, administrators called in to the four star Grey Street Hotel, a 50 room boutique operation run from a Grade II Listed building for a decade now, have kept it in business while putting it on the market for £3.5m. Administrators also found a buyer for the Staybridge Suites Hotel, a 128 room “home from home” opened in Newcastle in 2009 and branded as Staybridge Suites with InterContinental Hotels Group (IHG). The buyer is the global Westmont Hospitality Group, which has more than 500 hotels across three continents and strategic ties with many of the world’s largest hotel brands. The Staybridge was put on the market early in the year when Trinity Hotels (Newcastle) fell into administration. It is believed to have changed hands close to the £12.5m asked for. InterContinental Hotels and Resorts own the Staybridge Suites brand – and the Newcastle operation is run on a 20year management contract. A shadow briefly fell over The

Malmaison and Hotel du Vin, two more of the city’s newer hotels, when one of their stakeholders, MWB Group, went into administration, but the hotels’ parent group stressed there had been

nurseries, building and development. It immediately announced a £3m upgrade of the one-time headquarters of Northumberland County Council, converted in 1993.

A gateway transformed: The Handa family have transformed the famous Scotch Corner Hotel, “gateway to the North”. no bearing on the hotels. The group’s chief executive Gary Davis told The Journal newspaper that, despite the Newcastle market becoming saturated, the group is maintaining its image and reputation there, and will shortly carry out a £1.5m refurbishment at Malmaison. The four star, 101 bedroom Vermont was sold following its parent company Lincoln Group’s entry into receivership. The new owner is Gainford Hotels, part of Chester le Street’s Gainford Group - also involved in care homes,

One expects budget chains like Travelodge and Premier Inns to flourish as business travellers have expenses cut. But even Travelodges, some of whose 500 hotels are in the North East, have been hit. While no closures are planned, it asked landlords of 49 of the hotels to cut rents by 45% over six months while it seeks new operators, and asked for a 25% rent cut for a further 109 sites it would keep. Openings in Newcastle include the Canadian owned 175 room Sandman

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conferencing & hospitality Signature Hotel at St James’s and the £20m Hotel Indigo, a four star boutique style of 148 bedrooms, and featuring a Marco Pierre White steakhouse bar and grill. InterContinental Hotel Group was behind this opening beside the historic Assembly Rooms, with which there is now a joint conferencing and accommodation arrangement. On Gateshead waterfront a new 200 bedroom Jury’s Inn and a 200 bedroom Ramada Encore Hotel opened. Ken Ellington, joint chairman of the North East Hotels Association, suggests the many new hotels opening in Newcastle and Gateshead over a year have affected the area’s occupancies. Over 12 months about 1,000 rooms opened, which occupancy figures suggest were above additional demand. He says demand would have seemed apparent when hotel groups were putting figures together in isolation ahead of construction, but without realising other companies were also looking to open. The North East Chamber of Commerce would like to see a strong regional body, with VisitEngland working along LEP lines, and dividing itself into the same areas. It has made recommendations to this end. In Northumberland, a reopening of the Grade II Listed County Hotel in Hexham by Punch Taverns, put off for some months, may now come in spring. At Northumberland coast, Amble is working off an area plan that suggests a small hotel. Otterburn Hall Country House Hotel in north Northumberland closed abruptly in August. The London based Angel Group had bought the four star hotel of 65 bedrooms from the YMCA in 2002. There’s a cheerful story at Morpeth, however, where NVM Private Equity will

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achieve a two times money multiple on its investment in the Longhirst Group from the recent sale at Morpeth of Longhirst Venues to its chief executive, Stephen Cowell. This is the last part of the original investment in Longhirst Group that

More hotels coming UP A 222 bedroom hotel for the ascendant European hotel group Motel One (impression above) is planned for High Bridge in Newcastle’s city centre – the group’s first venture in England and due to open in spring 2014. Near there and Grey Street Hotel, Tyneside developers Meenu and Bunty Malhotra have been planning another hotel on Grey Street, running through to the parallel Bigg Market, and making use of what was once Balmbra’s Music Hall. Also in Newcastle, Brims Construction of Sunderland has been making a multi-million pound conversion of a 220-year-old house into an apartment hotel of 14 bedrooms. Insides of Grade 2 listed Friar House in Clavering Place are being transformed for Manchester based Roomzzz Aparthotel. The hotel is near Sleeperz Hotel, recently opened.

NVM put in during 2002. Further funding was provided in 2004 to establish Develop Training, which offers on-site training services across

overview

Longhirst’s venues. In 2007, Develop Training was sold through a secondary buyout for £15m, to allow the business to open new training centres, make acquisitions and expand into other sectors. Stephen Cowell says: “Longhirst Hall is one of Northumberland’s premier event venues and hotels. I’m delighted to acquire the remaining stake and take the business to its next stage of development. “I appreciate the continued support from NVM over the years.” Longhirst Hall (Longhirst) was built by the renowned architect John Dobson as a private residence. It is now one of Northumberland’s leading venues. It provides for conferences, private functions, weddings and visitor accommodation. It recently won the Outstanding Customer Service Category in the North of England Wedding Awards. In County Durham, the success of Beamish Museum, the region’s biggest tourism attraction now, is prompting a £4m investment in new attractions, and a possibility of £20m over the next decade. It had a record 497,000 visitors in 2011. Nearby, the refurbished Best Western Beamish Hall Hotel appears to benefit. Seaham Hall Hotel is getting a £1m facelift to revive its reputation following the business collapse of previous owner, Van Essen Hotels, which apparently could not maintain earlier standards set by the original developer and owner, North East software multi-millionaire Tom Maxfield. It was sold in administration for less than £5m against £12.5m hoped for. Now it is with Seasons Holidays of Bristol, which owns seven country house hotels and is bringing the 18th century mansion back to splendour. It was widely considered to have one of the country’s best spas and food offerings.

bq-magazine.co.uk overview

conferencing & hospitality

Campus conferencing Colleges, like universities, now promote themselves as events venues. East Durham College’s new Peterlee campus, for example, now holds anything from a small board meeting up to a 1,000 seat conference. Recent events there have included the NHS, the Health and Safety Executive and the Arboreal Cultural Association. Gateshead College is also promoting itself as a conference centre and location for dinners and other events. It can cope with five to 500.

Durham City is getting a new hotel. Malmaison and Hotel du Vin Group,

which convert old buildings of character, will transform the Victorian Old Shire Hall, which 400 administrative staff of Durham University left for a £20m office complex on Stockton Road. The now defunct One North East had bought the hall for £4.2m in 2008, which has now been sold off by the Homes and Communities Agency, successors to ONE’s property portfolio. On the outskirts, the four star Ramside Hall Hotel is getting a multi-million pound improvement which includes a new 18 hole championship golf course, and a new conference and banqueting centre. Event Durham is promoting 10 conference and event destinations across the region. Sunderland Football

Club is diversifying into catering, hospitality and open-air concerts in a big way. University of Sunderland is promoting its conference events and facilities through UniSpace organisation. At Darlington, the historic four-storey King’s Head, now the King’s Hotel, has reopened in Priestgate with an £8m upgrade and restoration after near destruction by fire. The 26 bedroom building, almost totally closed for four years, is now owned by the Cairn Group, active from Aberdeen down to London. In Newcastle it has - besides the Royal Station Hotel, the Cairn and Carlton and Rooms – the recently opened Double Tree by Hilton at Newcastle Airport. n

I N A L E AG U E OF IT S OW N SUNDERLAND’S AWARD-WINNING STADIUM OF LIGHT IS THE PERFECT VENUE FOR YOU AND YOUR BUSINESS With a reputation as a market leader in the hospitality industry, there’s flexible space ideal for conferences, exhibitions, meetings and training exercises. And you can enjoy a special matchday experience from one of our fantastic suites.

We’ve got a range of special offers and incentives available. Call 0871 911 1500 or email conf&banq@safc.com

SU ND ERL AND A S SO CIAT ION F O OT B ALL CLUB

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events BUSINESS EVENTS BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to b.g.nicholls@btinternet.com. The diary is updated daily online at www.bq-magazine.co.uk

JANUARY

24 to Mar 2 UKTI North East market visit to India 0845 05 05 054 or enquiries@uktinortheast.org.uk

APRIL

25 to Mar 1 UKTI North East market visit to Panama. 0845 05 05 054 or enquiries@uktinortheast.org.uk

14 NOF Energy National Conference, Energy – a Balanced Future, Hilton Gateshead, kleng@nofenergy.co.uk, 0191 384 6464

24 NOF Energy, Networking Lunch with Talisman, Hardwick Hall Hotel, Sedgefield (10.45).

4 to 13 UKTI North East market visit to South Africa. 0845 05 05 054 or enquiries@uktinortheast.org.uk

25 Building a Tool Kit for Innovation, first steps. Joint seminar at Newcastle University Business School, being held by the business school and Herb Kim (Thinking Digital and Codeworks). ruth.warwick@ncl.ac.uk

25 to Feb 1 UKTI North East market visit to Dubai. 0845 05 05 054 or enquiries@uktinortheast.org.uk

7 NOF Energy Annual Conference, Newcastle tbc. 0191 384 6464. k.leng@nofenergy.co.uk

17 NOF Energy, Decommissioning Lunch with CNR tbc. 0191 384 6464 23 IoD North East director development breakfast, Director in the Dock, Ward Hadaway, Newcastle (7.30am)

FEBRUARY

7 North Tyneside Business Forum workshop series: Setting Goals, Quadrant East, Cobalt, (7.30am). Sandra 0191 643 6000, business.forum@northtyneside.gov.uk

MARCH

7 CIM: Developing Sustainable Brands, Newcastle. 01628 427 340, www.cim.co.uk/northeastengland. 11 NOF Energy, Oil and Gas Visit, Norway. 0191 384 6464. k.leng@nofenergy.co.uk

8 Competing with IT – breaking through to enable business innovation. Joint seminar at Newcastle University Business School, being held by the business school and Herb Kim (Thinking Digital and Codeworks). ruth.warwick@ncl.ac.uk

15 Building the Capability for Innovation – exploring the barriers. Joint seminar at Newcastle University Business School, being held by the business school and Herb Kim (Thinking Digital and Codeworks). ruth.warwick@ncl.ac.uk

18 NOF Energy, Oil and Gas Business Visit, Houston and Lafayette. 0191 384 6464

18,19 UKTI North East market visit to Sweden. 0845 05 05 054 or enquiries@uktinortheast.org.uk

18 to 22 UKTI North East market visit to Mexico. 0845 05 05 054 or enquiries@uktinortheast.org.uk

20 IoD North East, Dinner with Sir Clive Woodward, Radisson Blu, Durham (7pm).

MAY

16 CBI: Meet a Marketing Mentor, Middlesbrough. Durham. 01628 427 340, www.cim.co.uk/northeastengland 21 to 23 Thinking Digital Conference, Sage, Gateshead. 0191 490 9192 info@thinkingdigital.co.uk

JUNE

6 Building Momentum for Innovation, agreeing the next steps. ruth.warwick@ncl.ac.uk 19 NOF Energy, Canapes and Conversation, tbc

SEPTEMBER

17,18 Return on Innovation Conference. Joint seminar at Newcastle University Business School, being held by the business school and Herb Kim (Thinking Digital and Codeworks). ruth.warwick@ncl.ac.uk

Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they are known. Key: Acas = Advisory Conciliation and Arbitration Service. CIM = Chartered Institute of Marketing. CECA (NE) = Civil Engineering Contractors Association (North-East). HMRC = Her Majesty’s Revenue and Customs. ICAEW = Institute of Chartered Accountants in England and Wales. ICE = Institution of Civil Engineers. IoD = Institute of Directors. NEA2F = North East Access to Finance. NECC = North-East Chamber of Commerce. NSCA = Northern Society of Chartered Accountants. FSB = Federation of Small Business. Tba = to be arranged. Tbc = to be confirmed. Tbf = to be finalised

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