Briefly Legal - Winter 2010

x93710_WB_cvr_p10_sw_x93710_WB_cvr_p10_sw 09/12/2010 08:20 Page 1

Article Title

BrieflyLegal Narec: A national centre of excellence

The catalyst for renewables in the UK LIMBERING UP FOR LONDON

Martyn Kendrick of Lloyds TSB Commercial answers questions about the London Olympic Games

VENTURE CAPITAL & INVESTMENTS Your questions answered

...a superb level of service Legal 500, 2010

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watsonburton.com

INSURING FUTURE BUSINESS What you need to know now by Ted Langer, Lockton Companies LLP

Something you didn’t knowContents about us...

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19 Delivering Quality

32 Insuring Future

Something you didn’t know about us...

Limbering up for London 2012

Martyn Kendrick of Lloyds TSB Commercial answers questions about the London Olympic and Paralympic Games

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What a difference a year makes

We are working with clients who have had to adapt to changing circumstances to survive and succeed. We are also advising those who are creating exciting, innovative products and services which will help to drive postrecession recovery for the UK. Our commitment to clients goes beyond just providing quality legal advice. We work with you to identify opportunities and create networks that will help pave the way to future business success.

That same thinking has driven the content of this publication.

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A new government, Eurozone concerns, local enterprise partnerships, oil spills, mining disasters and an imminent Royal wedding. The outlook for UK business in the year ahead remains mixed, with good signs for the private sector, alongside concerns about impending cuts in the public sector.

The new format of Briefly Legal offers informed opinion from experts about challenges facing the education, health, energy and real estate sectors.

We question venture capitalists and bankers about funding for businesses and find out more about the London Olympics, the Nuclear Decommissioning Authority (Narec) and DurhamGate.

Major new legislation, such as the Bribery Act, and changes to insurance are explained, and we

look at strategic management and reveal a few things you didn’t know about some of our people.

We hope you enjoy reading the new Briefly Legal and find some valuable insights within its pages.

Gillian Hall Senior Partner Watson Burton

Business

Ted Langer of Lockton Companies LLP explains how the insurance sector is responding to an ‘extraordinary year’

Watson Burton’s Head of Employment, Chris Graham, sets out the law firm’s commitment to client service

20 On the Take

David Jones discusses the potential problems in implementing the Bribery Act

Watson Burton’s David Jones looks at the involvement and legacy of the Olympic Games 2012 for the construction industry

34 Resolved

Watson Burton’s head of dispute resolution, Richard Palmer, looks at the rise in litigation and what you should look for in advisers

The firm has recently undergone which 21aThebrand Bribery Actrefresh and Your Business 36 What next for the NHS? included the launch of our new website. website Watson Burton The looks at the penalties and principles Mary Coyle, chair of North associated with the Bribery Tyneside Care showcases the full range of support we can provide toPrimary clients Act Trust looks at major changes signalled for the NHS and the breadth and depth of our lawyers expertise.

Contents To give you a greater insight into the personalities at the firm all CVs on the website now include an additional section called ‘something you didn’t know’.

James Harrison, Associate

8 and Venture capital and Here are six of our lawyers Investments personnel and six “something A panel of six venture capital you didn’t know” facts. Can you experts answers questions about financial opportunities guess which fact matches which and future challenges person?

Sara Stanwix, Solicitor

Kevin Anderson, Associate

22 Narec - The Catalyst for 38 Best of Health Renewables in the UK

12forEducation: See the bottom of the page Cementing our Future Mark Lawton, answers!

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Andrew Mill, Chief Executive of Narec, interviewed for Briefly Legal about exciting future prospects of the National Renewable Energy Centre

Henry Cave, Watson Burton’s head of healthcare dissects the impact of changes in the healthcare sector

40 Our approach

PatrickHannant, Harwood, Watson Patrick Harwood, Christine Energising the Future Sara Caplan of PwC Burton’s chief executive, Partner CEO Finance Manager reviews the changes facing Watson Burton’s Duncan outlines the five key schools, colleges and Reid discusses key priorities for strategic They used to swim for England as Being from Liverpool, this person This person was bornsuccess in Skipton, universities legislation affecting the management a junior but has since become less obviously loves the energy Beatles,sector and is in Yorkshire on the day of the Aberfan athletic. To reverse this trend, this fact a distant relation of one of them Disaster.

This was also the same Education Community person now intends to increase their fitness with an uncle’s cousin being none other than year that England last won the World Cup. From all Angles DurhamGate Drives Commitment level in order to compete in the Iron Man Paul McCartney!

Building, racing and collecting motorcycles Forward Partners from Watson Our work with for charities and triathlon within the next three years. have been a constant passion this person Burton’s education The developers of who still competes sponsorships to create from time to time in trials practice discuss how DurhamGate, a £100m chances for younger people events. changes in education development, reveal how policies affect other sectors regeneration Something you didn’t This person likes all animals, but This person is a fanthe of the big fight scheme This person is a member of the has moved forward despite Metallica know about ... especially loves cats. One of their era, which provided much enjoyment fan club andusrecently met recession fondest memories stems from aNuclear very when younger. Theya once met the band on their “Death Magnetic” Decommissioning unique Christmas gift. The gift was to hand legendary boxer Mohammed Ali in Austick's tour of the UK. They are also in the process of Think Laterally Authority feed a lion at Paradise Wildlife Park. This person bookshop in Leeds, during the signing of Ali's forplanning their wedding in Las Vegas in 2011.

Property is not very tall and as such the lion came close autobiography. the sheer Rob Higgins of NDA Ali demonstrated to their shoulders in height. By their own explainsenormity his size when thisWatson person’s entire Simon the remitofand Burton’s admission, this person very nearly changed hand fitted hand.looks at legal achievements of theinto the palm of Ali's Scougall their mind at the last minute, but did not let Authority news in commercial down the team at Watson Burton who gave property them the gift.

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1. Kevin Anderson, Associate 2. James Harrison, Associate 3. Patrick Harwood, CEO 4. Christine Hannant, Finance Manager 5. Mark Lawton, Partner 6.Sara Stanwix, Solicitor

Welcome

Olympics: Before and After the Games

Service

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up for l nd n ber lim ing

Olympics

Martyn Kendrick, area director for Lloyds TSB Commercial in the North East and Cumbria answers questions about the London Olympic Games.

The Games represent a real opportunity for small to mediumsized enterprises throughout the supply chain

Why has Lloyds TSB partnered with the London 2012 Olympic and Paralympic Games and what is it doing to help businesses make the most of the opportunities that exist?

We

believe the Games will have a hugely positive impact on Britain. It will touch every person in country and with branches on practically every high street, we are uniquely placed to bring the benefits of the Games to communities the length and breadth of the country beyond London.

Following the success and celebration of Team GB and Paralympics GB in Beijing in 2008, we are excited that our colleagues, customers and local communities can truly support the journey to 2012 and help make the London 2012 Olympic and Paralympic Games the most inspiring ever.

Lloyds TSB Commercial, part of Lloyds Banking Group, is doing everything it can to help its customers make the most of the opportunities the London 2012 Olympic Games and Paralympic Games represent.

Which companies will benefit from the opportunities the Games will present?

Earlier this year Lloyds Banking Group pledged to make available at least £1 billion of loans over the next two years to eligible firms across the UK, as part of our drive to help businesses benefit from the Games.

The initiative is part of the Group’s overall commitment to lend to UK firms, and is open to any companies that win contracts with the Olympic Delivery Authority (ODA), the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG), or any suppliers to firms that already hold contracts.

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common misconception is that the London 2012 Games will only benefit those in the South East. This isn’t the case; the ‘London 2012 effect’ is UKwide and contracts are being awarded all over the country.

Also, just because you’re not a large company doesn’t mean you shouldn’t think big. The Games represent a real opportunity for small to medium-sized enterprises throughout the supply chain. LOCOG will be awarding around £700 million worth of contracts for the products and services needed to stage the Games – many of which will go to SMEs. Plus there will be other opportunities further down the supply chain.

To help we’ve created an official Business Guide to London 2012, which is free to download at www.lloydstsb.com/ london2012business. We’re also holding a number of events across the country to help It’s worth remembering that the benefits of businesses identify the opportunities open a London 2012 contract aren’t just financial. to them.

The prestige and involvement can be highly motivating for staff and can provide a We are very proud to be the Banking and springboard for other business.

Insurance Partner of the London 2012 Games which will probably be the most important sporting event to take place in Britain in our lifetime.

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How do businesses get involved in the Games?

The

best advice is for businesses to act now if they haven’t already.

Start thinking about how you can get involved by considering the wider implications of London 2012 and what opportunities will be available for your products and services.

Companies wishing to tender should visit www.london2012.com/business to access ‘Compete For’, the official business portal for Games-related contracts. It acts as a brokerage service between buyers throughout the supply chain and potential suppliers.

The site features some great information including a list of top tips for suppliers. It’s simple, easy to use and for the sake of a small amount of time in your working day, registering could bring great rewards.

Just as athletes train, prepare and ensure they are fit and ready to compete, businesses need to do the same. If your company has never undertaken any type of procurement before then you may need to take advice and look at any changes such as tightening up internal processes before you qualify to tender.

Lloyds TSB Commercial has a number of London 2012 experts who are available to give you free help and guidance.

Martyn Kendrick, Area Director, Lloyds TSB Commercial

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lympics Before and after the games David Jones looks at the build up and the legacy of the Olympic Games 2012 for the construction industry

To

date, London’s Olympic Games has notched up some notable successes, long before the first competitors arrive.

Venues are well ahead of schedule. Most will be completed a good year before the Games begins in August 2012.

Ticket sales and TV revenues will cover the £2 billion cost of running the Games without the need for any public money. The Olympic Delivery Authority has announced savings of £193 million in reclamation and transport costs.

Olympics

Construction companies throughout the UK have made a fantastic contribution to the Games, to underpin what should be a successful and memorable event. When major construction projects have a fixed end date you can often see budgets soaring out of control. The budget rises at the Olympics – from £3.4 billion to £9.3 billion – are considerable. The low starting point, however, was seen by many as being unrealistic from the outset.

The relatively smooth-running construction programme has allowed the government to look closely to see what money can be clawed back, and as Olympics money is not ring fenced, many cuts are already underway. It is looking for £400 million cash back, and Olympics minister Hugh Robertson believes that the

£1 billion contingency fund is no longer required.

The combination of cuts and tight timescales means that a tough final accounting procedure could lead to major disputes between contractors, professionals and the government. There are signs that the government is already employing more accountants to look closely at all accounts.

An Independent Dispute Avoidance Panel (IDAP) has been set up specifically for the Olympics to try to settle construction disputes before they escalate into costly rows. It’s likely there will be tough negotiations to avoid court cases.

If a dispute is not avoided by using the IDAP, a separate Adjudication Panel has been launched with the help of the Institution of Civil Engineers.

Adjudication is a sensible course of action in such cases. It focuses the mind and motivates both parties to settle more quickly.

For all construction contracts there will be a final account process which will set out a procedure and a time-scale in which the final sum payable is calculated. However, in reality this process can often take far longer than envisaged by either party.

This can be particularly true with public sector work where a final payment can take years to agree.

To avoid too much delay and/or accelerate the final account

process you can, for example, cherry pick a particular dispute to “test the water”. From the adjudicator’s initial decision it may be possible to gain a commercial advantage when dealing with other final account issues. For example by valuing the delay to foundation works, the subsequent delay to structures built on the foundations could be decided at a later stage.

Questions will be asked, postOlympics, about the legacy of these Games. The Olympics Board set out five priorities for that legacy, which were: 1) Making the UK a world-leading sporting nation.

2) Transforming the heart of east London.

3) Inspiring a new generation of young people to take part in volunteering, cultural and physical activity.

4) Making the Olympic Park a blueprint for sustainable living.

participation in sport throughout the UK and in London is falling rather than rising.

Progress with sustainability, however, already deserves a gold medal. Around two million cubic metres of contaminated soil has been cleaned, 80% of which will be reused on the Olympic Park. 98% of demolition material has been recycled and the ODA has procured new recyclable PVC. Overall, despite the inevitable disputes and compromises, the London Olympics is a strong story for British industry, showcasing the work of construction companies and sub-contractors, architects, engineers and other professionals.

The event itself looks set to be a spectacular sporting success, boosting tourism and sending images worldwide of superb examples of British design, construction and organisational expertise.

5) Demonstrating the UK is a creative, inclusive and welcoming place to live in, visit and for business.

The lack of ‘legacy masterplan’ as Boris Johnson warned, may dilute the celebrations. The 80,000 seat stadium is still due to be demolished to leave a 25,000 seat athletics site. The Olympics village has had to be scaled back from 4,200 to 2,700 flats, and

David Jones is a consultant in Watson Burton’s construction and engineering group. To contact David, call 0845 901 0928 or send an email to david.jones@watsonburton.com

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Venturee V Capital

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THE PANEL Left to Right: Barrie Hensby, Chief Executive, NEL Fund Managers Limited; Andrew Coles, Fund Manager, FW Capital;

Colin Willis, MD, Hotspur Capital Partners; Tim Rea, Financial Consultant; Ian Richards Director, NorthStar Ventures; Duncan Lowery, Senior Investment Manager, IP Group plc

The economic downturn has resulted in an even tougher marketplace for up-and-coming businesses and entrepreneurs. We talked to six of the North East’s leading venture capital experts to discover what investors and investees need to look out for in the future.

The discussion ranged across the impact of the credit crunch on the structure of finance, the best opportunities for finance and the future face of equity investment and business financing.

The frank, informed replies give a fascinating and valuable insight into the financial opportunities and challenges facing businesses looking for investment, and the outlook for investors aiming to manage their risks.

Duncan Reid, head of private equity, Watson Burton

Q A

What has been the biggest change to venture capital since the credit crunch began in 2008 and is this change lasting?

Barrie Hensby: The venture capitalists’ reaction has been to limit new investments and keeping their powder dry to support existing ones. The lack of bank finance also means that venture capitalists are having to provide larger amounts to support existing investments. Normally this is cyclical, so it is not a lasting change. However, there is great concern that as an asset class, venture capital will not be able to raise substantial new funds because

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of poor investment returns and that this time it will be a lasting change.

Colin Willis: Further movement of the larger players closing their VC arms. In addition, difficulty in raising funds is reducing the number of medium/small VCs as their existing funds come to the end of their investment phase. I cannot see, unless there are great improvements in returns, why this trend will not continue, resulting in a reduction in the number of active UK institutionally backed funds.

Duncan Lowery: Clearly the largest impact has been on the leveraged buyout market which relied on availability of cheap debt. The credit crunch has seen a flight of institutional capital away from the small capital venture space. Of those that are still surviving US limited

Venture Capital & Investments

Investments Your questions answered by our panel

partnerships are moving back to the States to take care of their own back yards, having had poor returns from their experience in Europe, and EU limited partnerships are moving upstream where the risk is less. This leaves businesses with a paucity of knowledgeable VC investors to support their business. Accessing Series A rounds remains extremely challenging.

Andrew Coles: The general lack of available capital – particularly debt capital – continues to be an issue. The inability to leverage debt to fund transactions has severely impacted the venture capital sector and is restricting the number of deals being completed. The lack of available debt capital is also restricting venture capitalists’ ability to raise new funds.

Ian Richards: Whilst investment from venture capitalists has become a lifeline rather than an option for entrepreneurs seeking financial support, I have not seen a marked change to venture capital since the credit crunch began. Northstar has continued to invest in local businesses over the past two years, thanks to predecessor public funds and now the £125 million Finance for Business North East Fund that has sustained and even stimulated investment in regional businesses.

The economic downturn has, however, had an impact on co-investors from the private sector, such as business angels.

Tim Rea: Depends on what you mean by venture capital: from the perspective of entrepreneurs or from the investors themselves? From investors’ perspective, the issue is a sense of needing to fund the portfolio, the fact that new investments have a sense of “acquiring a liability” in terms of not knowing how much you’ll have to put on the line to get the company to stability and the fact that other investors are taking the same approach so you cannot rely on them to look at new deals and invest in your portfolio companies. From an entrepreneur’s perspective, it boils down to whether or not you chose the right investors to begin with, as it is difficult to attract new investment and you have to rely on existing choice.

Q A

With banks being more restrictive where can businesses go to find sources of funding?

Duncan Lowery: We’re finding that high net worth investing is active at the moment as the returns they are receiving elsewhere are poor, and the Enterprise Investment Scheme is still a highly favourable tax regime.

Our view with regard to grants is to assume that they are not available, raise the money from other sources and if a business can get a grant then it’s the icing on the cake.

Barrie Hensby: As well as Finance For Business North East funds, some business angels still remain active (although many have retired into their shells), but valuations have fallen significantly. On the debt side, there is still availability through asset financiers, including factoring and invoice discounting. The government has also just announced an extension to the Enterprise Finance Guarantee (EFG) scheme, but most of this is accessed through the banks that require substantial supporting collateral.

Andrew Coles: The Finance for Business North East funds are a good potential source of capital for the region’s SMEs. For instance, FW Capital manages the £20 million North East Growth Plus Fund. FW Capital can invest between £350,000 and £1.25 million in a single round in established SMEs with growth plans. We can also invest in subsequent rounds. I’m finding that the banks are willing to lend, albeit to a lesser extent than we’ve seen in recent years. There is still capital available for good deals.

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Venture Capital & Investments

Q A

Q A

Colin Willis: Make sure you understand the problem you solve, your market, competitors and who will buy you, plus importantly why and when. Align your interests with your investor (what are their funds measured on, how long does the investment phase last, when will the fund close?) and reference them through online resources such as LinkedIn.

What should business owners and managers look for when thinking of approaching a business angel or venture capitalist?

Duncan Lowery: Provide value for money in an investment opportunity and make money last as long as possible. Use innovative business models to get as far as you can into the market without burning through large quantities of cash. Seek value-add investors with the right networks and expertise to help build your business. Ask about their track record in making good returns. Finally – listen to feedback from advisers and investors about your proposition. They don’t waste words.

Colin Willis: Finding a firm that they can work with over the medium/long term and what level of involvement will be expected.

Ian Richards: Entrepreneurs should be mindful that the ultimate goal for venture capitalists and business angels is to create a profitable return on their investment. Therefore, business owners and managers should prepare a comprehensive strategy and business plan with a unique selling point and a strong management team.

Andrew Coles: Start-ups can secure investment. Develop a confident investment pitch and choose good advisers. A good idea for a product or service is obviously important, but a robust financial model with realistic sales assumptions is also essential. Demonstrating that there is a strong management team committed to the business and its potential investors is equally important.

Tim Rea: No way to answer that one succinctly! First point is do they know what they are talking about and do they have experience in dealing with companies at your stage of development and in your sector? I see cases where angel investors have money but less business sense or relevant experience. I’d advise those seeking funds to ask for references from potential investors.

Q A

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...there is great concern that as an asset class, venture capital will not be able to raise substantial new funds because of poor investment returns and that this time it will be a lasting change

What incentives is the government offering to businesses and their investors?

Ian Richards: Business owners should explore EU grants targeting innovative entrepreneurial ideas and regions zoned for regeneration.

Barrie Hensby: Individual investors can obtain tax relief in one of two ways. Directly by investing in the Enterprise Investment Scheme (EIS), or indirectly through a Venture Capital Trust (VCT).

Colin Willis: EIS improvement in allowances. The green paper indicates a co-investment fund with business angels is to be launched.

Q A

With traditional finance sources being more restrictive are there any new “alternative” sources of finance?

Duncan Lowery: There is the potential of pooling funds into a “Green Investment Bank” although it is not certain whether this is going ahead. The UK innovation fund was launched this year, and a number of overseas family funds have been active in the UK through family offices or wealth management practices.

Tim Rea: Revenue from trading is always a good idea. When funding is too readily available, business are often lazy in terms of “investing to develop the market” instead of going out to try to extract as much cash as possible from customers. Sometimes it is necessary to do things free/cheap early on, but that can make it difficult to ascertain the value that customers attach to a product/service.

Andrew Coles: In the North East, Finance For Business North East funds have made a significant level of capital available. Added to this, individual fund managers can be proactive and creative when it comes to ‘deal doing’. Angel investment is also becoming more buoyant - the returns are currently more attractive than those available from more traditional investment opportunities.

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What is the main piece of advice you can offer start up organisations trying to secure equity investment?

Q A

What impact has the credit crunch had on the structure of finance?

Barrie Hensby: Less debt available at a high price and with more collateral required. Hence more financings are less highly geared.

Tim Rea: I’d say it has only affected more mature companies that needed cash flow help (e.g. funding receivables) and my feeling is that the issue has been easing.

Ian Richards: With SMEs unable to secure debt finance from the banks, the structure of finance has moved towards equity. The credit crunch has caused a shift in the traditional debt/equity ratio, as venture capitalists look for financial structures with greater equity.

However, this shift is balanced by certain funds, such as the Finance for Business North East Fund, which stipulates that some cash returns must be generated in the short term.

Q A

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How does a business find the best opportunities for finance and how does it make itself known?

Barrie Hensby: The best way is to approach a firm with experience and expertise in corporate finance. They will be aware of those firms currently investing which fit the fund raising profile. They will then prepare necessary documentation to give the firm the best chance of success.

Colin Willis: See which lawyer or accountant is advising on the most deals in the last 12 months and ask them. Get as much PR as possible and win industry rewards. People track industries they are interested in.

Ian Richards: The best way for a business to make itself known is to talk to a range of investors, especially venture capitalists and business angels. Register with institutions such as the Entrepreneurs Forum and attend events hosted by business support organisations.

Q A

How can investors in these troubled times ensure that their investment is a safe bet?

Duncan Lowery: There are no safe bets. However, there are ways to mitigate risk; build very high calibre management teams, gate the funding on tough but achievable milestones, have a viable funding strategy to take you through to exit, partner at the right time with the right businesses and obtain the right price at the outset.

Tim Rea: The only thing an investor can do is to (a) make sure the management are sensible and know when to go easy on cash and (b) keep a clear eye on the ball in case management don’t realise when it is necessary to go easy on the cash. Reverse applies in that it is important to know when to go for it.

Andrew Coles: There’s no substitute for thorough diligence! Make sure you go into any investment with your eyes open – it’s likely to take longer to exit than you’d think and to cost more. Oh, and don’t forget: there’s rarely a reward without risk - if an investment seems to be too good to be true, it probably is!

Q A

What is the future face of equity investment and business financing?

Barrie Hensby: Over the next two to three years more of the same. Thereafter it is difficult to foresee, but will probably involve less tight credit conditions, with a higher proportion of equity coming through business angels, particularly at the lower investment range.

Colin Willis: Following US in that more angel groups develop, and angel investing becomes an increasing proportion of the early stage investment. Corporates become more active in funding early stage investments as traditional VCs run out of active funds.

Duncan Lowery: Very difficult to say. Angel activity will always be there but its intensity will fluctuate as returns on alternative products increase or decrease. Institutional VC may come back if it is shown that returns can be made in that space and quality opportunities can be developed. Public private initiatives are likely to be a feature across the EU due to the lack of institutional limited partnership investing.

Tim Rea: Early stage support from governments. Ongoing activity in the angel investment sector. Shorter chain between the source of capital and the investee companies with a resultant sharper focus on return on investment. This could lead to changes to the structure of the VC industry.

Ian Richards: Finance for Business North East Fund aims to create a sustainable legacy that will support continued investment into new SMEs even after the £125 million fund has been fully invested. Private sector co-investors working alongside Finance for Business North East Fund managers could provide further private financial support.

Get in touch with Duncan Reid, Head of the Private Equity Group at Watson Burton to find out how our experienced team can help your business. Call 0845 901 0954 or send an email to duncan.reid@watsonburton.com

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Education -

Education

Cementing our Future Sara Caplan, partner, education at PricewaterhouseCoopers looks at the major changes facing education as a result of funding cuts.

As

with the rest of the public sector, education is facing major change as a result of funding cuts.

Although the budget for schools has largely been protected, changes in the way funding is allocated, the development of new types of schools and a desire to let schools make more of their own decisions means that the role of Local Authorities in primary and secondary education will change dramatically and reduce substantially.

This offers a number of opportunities: schools may decide to procure goods and services directly; there will be more incentive to work together, as federations or consortia; new types of schools will be able to vary the curriculum, being more responsive to local and individual needs where appropriate; and through direct funding, each school will receive the same amount per pupil.

At a recent Citizen’s Jury we ran with Britain Thinks, the Jury felt that free schools, where teachers, parents and other groups can propose to open a school if there is proven demand, were an excellent way of raising standards, improving choice and breaking down class barriers in our education system.

In the further education sphere, it is clear that the Ministers, John Hayes MP and David Willetts MP are committed to raising the profile of vocational education and, in particular, Apprenticeships. Money is tight, and budgets

have faced swingeing cuts, but the political will is there to ensure that Apprenticeships thrive, are rigorous and give employers what they need – highly skilled people who contribute to the success of the business.

In many areas of the country, small and medium sized employers are banding together to create group training associations or other less formal arrangements, so that between them they can employ apprentices and train on a shared basis.

Of course, expanding Apprenticeships depends on there being jobs available – as Apprenticeship training is based in the workplace. The imperative lies with employers to support this as a means to ensure we have the skills in our economy to drive us forward out of recession.

The introduction of loans for further education, similar to those in existence for higher education, will offer an additional boost for those wishing to continue their vocational studies to Level 3 or for anyone over the age of 25. The threshold for paying back the loan is likely to be relatively

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Without a strong education and training system... we cannot thrive as individuals or as a global economy

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high, probably £21,000 as with Higher Education loans, so the prospect of repayment won’t rear its head immediately for most people.

Colleges and training providers will need to be delivering excellent services to attract people willing to pay and take out loans for their courses.

Tight financial times and a greater cost burden will drive a more demanding education consumer.

Our Universities are currently facing a future without a teaching grant for most subjects.

The imperative here will be to reduce costs and look at new, innovative ways of teaching without compromising on quality. Expect to see more

shared services, outsourcing, mergers and part time learning options, as well as more use of technology in teaching. Further Education Colleges are likely to continue to develop their offer into this market making use of their delivery model.

Of course, there are challenges: a reduced demand for Local Authority services could lead to additional job losses and in the North East where we are heavily reliant on the public sector we badly need an alternative. This may come in the shape of increased investment in sectors such as low carbon related industries, biotechnology and advanced manufacturing.

Reskilling the public sector workforce continues to be critical for us. Helping people to find out where their current skills might be used and how they can develop new skills for emerging industries is one of the many things we need our further education and training providers to do. We also need to get people working again.

For the unemployed, the new Work Programme will offer people a much more individualised programme of support to gain sustained employment – from the traditional job seeking skills to matching employers and potential employees more effectively and preparing both parties for a successful transition.

Overall, as with any sector facing adversity, this will be a case of survival of the fittest. The drive to reduce cost will lead to mergers, acquisitions, federations, subsequently a smaller number of bigger providers of education and training, and an impetus to seek best value. This will in turn have implications for the supply chain – we will see an increasing trend towards requiring suppliers to reduce costs, as the public sector passes on the effects of a reduced budget.

The outcome will be a leaner, more effective education and skills system, which is focused on the needs of individuals and employers and which cuts out some of the wasteful bureaucracy we have seen in the past. There will be many challenges along the way, but without a strong education and training system that takes us through childhood to adulthood, we cannot thrive as individuals or as a global economy. We all have a part to play in making this happen.

Sara Caplan, partner, education, PricewaterhouseCoopers

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Education

From all angles Corporate, real estate, construction, employment and commercial partners from Watson Burton discuss the many challenges facing the education sector.

Left to right: Michael Ord, employment partner, Barney Frith, real estate partner, Gillian Hall, senior partner and head of education, Ed Meikle, commercial partner and head of intellectual property and Roddy Gordon, partner and head of construction and engineering.

Gillian Hall We are all involved in work with education clients in the region and much further afield. All areas of the sector have gone through massive changes recently. What in your opinion will next year bring for schools, colleges and universities?

Roddy Gordon The axing of Building Schools for the Future (BSF) means that 700 projects across the country have gone. We’ve been involved in some early BSF schemes in Newcastle and South Tyneside, but those in the pipeline can now only be refurbished.

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The problem is that some schools do appear to be crumbling in parts, so treatment is needed quickly. Whether the government and schools can prioritise refurbishment among many other pressing needs is another question.

Barney Frith

view, the knock-on effect of axing the BSF programme is significant. There will be no new buildings, so no major building work for construction companies and their professionals.

Gillian Hall

Yes but schools are still able to ask for government money to It’s the cut in schools’ capital rebuild if their buildings are projects announced in the comprehensive spending review really poor, or if they need to that must have brought a sharp accommodate extra primary places. Given the many pulls on intake of breath for many government coffers, cuts on schools. There’s been a 60% school buildings programmes slice off what was being invested were inevitable. in the BSF programme. From the property market’s point of It’s not only the cuts but the way

the education sector deals with them that will affect the sector in the longer term. All parts of the sector now have to conduct themselves as education businesses, and that still seems to go against the grain with some. Many already operate as education businesses. Others see themselves as providers of learning or skills, rather than commercial organisations. They are going to have to go through some major cultural changes to thrive in the future.

Michael Ord I agree that those schools, colleges and universities which

don’t take the bull by the horns and carry out changes now will feel it most. Institutional change involves tackling staffing, which is a difficult area for any organisation, but in education – a face-to-face operation – it can be hugely problematic if not managed well. Unit costs in schools have risen by 40% in the last seven years, and much of this is down to increasing staff numbers, so staffing is bound to be affected next year.

Repercussions – such as employment tribunals – can be avoided in most cases if relationships are worked on sensitively. For colleges and universities which have gone through tremendous growth in the last decade the need to carry out restructuring will be difficult, and will need professional advisers to be involved from the outset.

Ed Meikle As well as finding savings by cutting courses and in some cases staff numbers, the rise of technology in schools, colleges and universities will bring new areas of legislation to the fore. If courses, presentations and texts

are in a cloud rather than a classroom, intellectual property, branding and technology matters will play a much more prominent role in education than they do at the moment.

Contracts for education establishments, from suppliers to catering staff, are likely to go through major modifications too. The pace of change in technology will have to be factored in to the drafting of contracts, and commercial results will be an important priority. The good news is that the emergence of technology as a mainstay of learning experiences could boost British technology businesses.

Roddy Gordon Universities are being forced to transform themselves to deal with financial cutbacks. One in three students now studies parttime and one in six is from overseas. More will study from home or online in the future. As universities become more global, colleges and private providers look likely to take over an increasing share of the traditional university market.

We may see more foreign campuses being set up by universities and colleges as the international agenda in higher education gathers pace. The traditional three year, full time academic degree at university looks set to change radically, with more vocational courses and module based, ‘pick and mix’ degrees taking its place.

dynamic colleges may take over those which are not performing so well. Others may form hard federations to cut central overheads and save money, whilst at the same time bringing in strong management processes. With mergers, federations and buyouts they will be as busy making deals as many private sector businesses.

Barney Frith

The growth of academies may provide the new buildings requirement missing with the BSF cuts.

I believe many further education colleges will show further growth in the next year.

The colleges are expanding their remits, and many are acquisitive.

Gillian Hall I agree Barney. With the school leaving age going up to 18, further education could expand recruitment through strong promotion of their expertise in apprenticeships, training and sixth form studies. The more

Summarising the topics we’ve touched on, it’s obvious that the changes being experienced by primary, secondary and tertiary education throughout the UK will profoundly affect the context in which our schools, colleges and universities carry out their work. The implications of these changes require national debate to bring the longer-term consequences of current moves into sharp relief.

Find out how the education practice can help you by getting in touch with Gillian Hall, head of the education group. Call 0845 901 0955 or send an email to gillian.hall@watsonburton.com

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Rob Higgins, head of legal at the Nuclear Decommissioning Authority, outlines the extraordinary challenges facing the NDA, Europe’s “largest environmental restoration programme”.

powering down

Hunterston nuclear power station, Ayrshire

Nuclear Decommissioning Authority (NDA)

The

Nuclear Decommissioning Authority (NDA)’s daunting task is to tackle one of Britain’s most technically challenging responsibilities. It is the decommissioning and clean-up of the UK’s civil nuclear legacy, ensuring that all radioactive and nonradioactive waste products are safely managed.

In doing so it is driving forward the largest environmental restoration programme in Europe.

It is also putting in place Government policy on the long-term management of nuclear waste. The UK's deep store for nuclear waste should open around 2040, a £4 billion facility which may be built in Cumbria.

The NDA recently chose Watson Burton to provide UK-wide employment advice, against strong national competition from London and the regions. Watson Burton is also advising NDA through the human aspects of organisational change.

Rob Higgins, Head of Legal at NDA said: “Watson Burton’s exceptional expertise in complex employment law shone through from the outset. The astute, proactive approach of Chris Graham and his team is an important asset for our organisation.”

NDA places great importance on working closely with its stakeholders. It employs stakeholder liaison staff to focus on residents and business within the communities around its sites, with regular consultations and updates. The authority has a transparent publication policy, under which it publishes extensive information about what it does and how it operates, all available on its website.

Rob Higgins said: “In all aspects of our work, face to face dialogue is important. In my experience many decisions aren’t black and white but require judgement calls, which are best based on first hand discussion and close understanding. In the same way, when our regulators have to make decisions based on information provided by NDA, face to face input explains and clarifies important details.”

The NDA has built strong momentum in its first five years. It has generated over £7 billion in commercial income and made efficiency gains worth hundreds of millions of pounds and stayed within budget. It has accomplished all this while having to adapt to a recession by restructuring its organisation, which has included tough decisions about present and future priorities.

Rob Higgins said: “NDA, although in the public sector, is a client organisation with many contractual relationships involving private sector companies which carry out duties on our sites. We have a statutory responsibility to ensure this work is completed well and safely, but don't own the agencies that carry out the duties.

“Delivery is complex because of the number of parties involved. Unlike private sector projects, when the main parties – client, funders, contractors – are all motivated by a shared desire to complete a contract profitably, we have different priorities. We are managing a huge programme and need to show good governance at every stage and that value for money is being delivered.

“The many parties involved with the NDA – from the Treasury through suppliers to local residents – have radically varying outlooks.

We are dealing with public money and have to keep that at the front of our minds at all times.”

The authority is now working with the legacy of a major UK-wide civil nuclear power

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17

Nuclear Decommissioning Authority (NDA)

programme. Between 1953 and 1971, 26 reactors were built across the UK together with reprocessing plants storing and treating spent fuel from UK and foreign customers.

In 2005 the NDA took over responsibility for sites formerly owned by British Nuclear Fuels plc (BNFL) and United Kingdom Atomic Energy Authority (UKAEA). One of the problems it encountered was that there was little detailed information about the older facilities and a lack of reliable design drawings. NDA believes that some of the technical clean-up issues will require technological and scientific advances before they can be dealt with comprehensively.

The winding-down of NDA’s largest site, Sellafield, is a complex, intricate process for NDA’s legal team. Sellafield is the site that supplied the material for the UK’s independent nuclear deterrent and where the world’s first commercial nuclear power plant was built.

Much of the UK’s electricity supply has been powered by the first generation Magnox fleet of nuclear power stations. Of the 11 Magnox stations only two are still in operation, and they are nearing their end of their useful lives.

Rob Higgins believes his private sector experience serves him well in his present role.

He said: “In my previous role I dealt with very large, costly PFI engineering projects. The NDA is, in essence, a collection of huge engineering projects. It is complex and high value work, which I enjoy enormously. It's a job any projects-orientated lawyer would love to do.

“I’ve found the biggest change in this role from the private sector is in the number of separate parties involved in carrying out our work. I’m now much more involved with government, helping to make and implement policy, and dealing with the statutory framework within which the NDA must work.”

Rob Higgins said: “The NDA has a huge remit and a small in-house legal team to carry it out, supported by external expertise provided by law firms such as Watson Burton.

“As with all public and private sector businesses we’ve had to achieve cut backs.

We have fairly rigorous regulations from the Treasury which state that, before hiring external consultants who will cost over a set amount, we have to back up each request with a detailed business case for spending that money.

“I think this is a proper and sensible process.

It discourages you from sending work out unless you absolutely have to do so, and makes you think of the overall cost for those consultants hired on an hourly rate before going ahead. If the business case for procurement goes through to approval it also smoothes the consequent audit procedure.

Delivering Quality Service

“

The NDA is, in essence, a collection of huge engineering projects. It is complex and high value work, which I enjoy enormously. It’s a job any projects-orientated lawyer would love to do

advisers that can work effectively in the NDA environment to deliver practical solutions to our short- and long-term challenges.”

Rob Higgins is facing the challenges of new legislation which will come into force in 2011.

He said: “The Paris Convention amendments to the Nuclear Installations Act may be enacted next year. These will bring in a new layer of complexity to the liability regime. We also have to prepare for the introduction of the Bribery Act. “As a major, multi-site organisation the NDA is aware of the difficulties involved in comprehensively addressing the Act. We already have procedures in place, but it’s a g matter of drawing the strings together to form cy.” a cohesive anti-corruption policy.”

NDA is keen to nurture the nextt generation dustry. It has of employees for the nuclear industry. helped to set up a new National Skills Academy eships and for Nuclear to create apprenticeships graduate roles for the industry.

“In the current financial environment, the use of any external consultant has to be clearly justified on value for money grounds. We must therefore ensure that we only use legal

Rob Higgins, Head of Legal, NDA

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”

It has also part-funded Energus, a £20 million skills, training and education facility at Workington, West Cumbria, and is investing in skills infrastructure in Caithness, North Wales and Somerset.

While the NDA has to deal with the nuclear legacy of the last 60 years, present day recession and the restructuring that comes with that, it is clear that the NDA is also planning to maintain safe, successful operations for many decades to come.

Delivering Quality Service Christopher Graham, head of employment, explains the importance of always exceeding client expectations.

Organisations are entitled to expect that lawyers will offer a high quality legal perspective on their operations.

A full and proper understanding of the law is a given.

At Watson Burton we believe that to deliver a quality service involves more. We should be prepared to tell a client not just what the law says but what we would do if we were in their shoes.

This is why we place so much emphasis on the way in which we deliver our service and on building a commercial understanding of our clients’ requirements.

Building relationships We aim to make a genuine difference to each client, talking through issues to provide sound, independent advice. We also deal with problems before they arise which is more efficient for our clients than for them to seek advice from us once a problem has developed.

Our focus on delivering outstanding results and exceptional service means that relationships are built on trust and a deep understanding of each client's objectives. We have a partner-led, hands-on approach. It makes a real difference to clients because we work tirelessly to fully understand what they do and how we can add value. This means we can advise them how they can do things rather than why they can’t.

As a result our lawyers are trusted business advisers able to help our clients fight their corner rather than simply suppliers of legal expertise. The success of this approach ensures that the firm adds value to commercial organisations from a wide range of sectors nationwide.

An extension of your team As the relationship develops our clients come to understand the value we place on building mutual trust. For every client, our long term goal is that they come to view us as an extension of their team. This approach means that our clients know that we are up to date with their issues and objectives and that we use this knowledge to ensure that the service we deliver is based on a complete understanding of their needs.

Make it enjoyable It is also evident to clients that we genuinely enjoy practising law and we believe our clients enjoy working with us. We offer a real hands-on service and clients find our approach to our work enthusiastic and committed.

Key to our ability to deliver quality service is a combination of commercial and technical judgement delivered with a personal touch.

It is this approach that forms the foundation of many long-standing client relationships.

Our clients know why it is worth asking us for our view.

More importantly, clients know that if they instruct us to deal with an issue it becomes one less problem for them to deal with.

They have the confidence that we will achieve the results they require.

Find out how Watson Burton can help your business by getting in touch with Christopher Graham, head of employment law. Call 0845 901 2033 or send an email to christopher.graham@watsonburton.com

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The Bribery Act 2010 and Your Business

The Bribery Act and Your Business

Yes!

Virtually every commercial organisation in the UK will be affected. The Act applies to all companies registered in, and partnerships based in, the UK (even if some or all of their business is conducted abroad) and to non-UK businesses which conduct any commercial activity in the UK. The scope is much wider than before; it now covers all commercial activities, and sets new standards for acceptable business practice at home as well as abroad.

TH E AN BR D IB YO ER UR Y A BU CT SI 20 NE 10 SS

On the Take

Will the Act Affect Your Business?

People will think twice about doing business with you if they are co oncerned that you might be the weakk link in a chain

David Jones, consultant, Construction and Engineering Group

Let’s

look at the practical problems the Bribery Act will have to overcome.

The bribery of a foreign official, for example, will bring into play laws of other jurisdictions. Do we act global or local?

What the Bribery Act clearly believes to be a criminal offence under English law may not be interpreted as such by the country in which it took place. The knock on effect of trying to fit together conflicting laws could lead to costly delays and lengthy court cases.

The practicalities of bringing every facilitatory payment from all jurisdictions worldwide before the courts could clog up the judicial process and slow down businesses.

The Director of the Serious Fraud Office, Richard Alderman, is unequivocal, however, saying that companies have to adopt a zero tolerance approach to such payments. He is realistic in appreciating that they will not stop over night, and says that the SFO staff need to be assured that companies are actively putting in place strategies to bring such payments to an end, and implementing them.

The lack of clarification about terms within the Bribery Act such as ‘performing services’ and ‘associated person’ should be addressed before the Act comes into force. Companies could unwittingly commit

20

a corporate offence because the scope of such terms has not been made clear.

America has had anti-corruption legislation for over 30 years. We should learn from its long experience. It, too, reportedly has problems in being able to describe for clients what a ‘facilitating payment’ is, or defining a public employee, or what ‘obtain or retain business’ in fact means.

Interestingly, despite the lack of clarity there have been no courtroom tests of the US Foreign Corrupt Practices Act for over twenty years.

Each time an employee is found guilty of a bribery offence, the guilt is passed on to the employer, who then settles out of court.

Without regular judicial review the FCPA’s offences are increasingly being judged arbitrarily, according to individual circumstances. The UK should take note that access to the courts for defendants charged with overseas bribery is important in properly testing and strengthening the new Act. Find out how the construction and engineering group can help your business by contacting David on 0845 901 0928 or email david.jones@watsonburton.com

The Bribery Act will come into force in April 2011.

The Offences

The government has defended this approach by pointing out that the range of businesses affected is so wide that ‘one size fits all’ advice is just not practical.

The draft Guidance is not intended to be a stand-alone document, but to be complementary to existing anti-bribery guidance. However, it fails to specify what other guidance is actually approved for the purposes of complying with the new Act. Specific guidance on when corporate hospitality might be regarded as crossing the threshold between acceptable business practice and criminal offence has been left disappointingly vague.

The Guidance gives no indication of proportionality in compliance, which could concern smaller businesses. They could be in particularly difficult positions when, say, they are junior partners in joint ventures, or struggling to get distant foreign agents to comply. In practice, the possibility of a smaller business being able to exercise enough effective control to prevent either large co-partners or remote agents from giving bribes will probably be very restricted.

(a) Giving a bribe (b) Receiving a bribe (c) Bribing a foreign public official (d) The “corporate offence”, where a commercial organisation fails to prevent people performing services on its behalf from committing bribery. (e) If a corporate body is found guilty of an offence under (a)-(c) that is also proved to have been committed with the consent or connivance of its senior officers, it is also liable to be found guilty of that offence personally and punished accordingly.

Penalties of non-Compliance A maximum penalty of 10 years’ imprisonment, or an unlimited fine, or both for giving or receiving a bribe or bribing a foreign official. If senior officers of a corporate are found guilty under offence (e), both they and their company could receive a heavy fine, and be imprisoned. Negligent failure to prevent a bribe attracts an unlimited fine.

Severe as these penalties are, the reputational damage following a conviction may be even worse in the long term: it could mean being blacklisted by the World Bank abroad, becoming ineligible to tender for public procurement contracts at home, and receiving a great deal of unwelcome adverse publicity. People will think twice about doing business with you if they are concerned that you might be the weak link in a chain that could implicate them.

Guidance The final Guidance on the new Act is due early in 2011. It is only once the Guidance is finalised that detailed anti-bribery policies can sensibly be drafted by businesses. In the meantime it is well worth considering what the draft Guidance reveals about the government’s approach to some key issues so that companies can take this into account in their preparations for complying with the new Act.

Six Principles Another aspect of the draft Guidance which is very unlikely to change in the final Act is the emphasis on six core management principles. They are: 1. Risk assessment 2. Top level commitment 3. Due diligence

4. Clear practical and accessible policies and procedures 5. Effective implementation 6. Monitoring and review

Note that only one out of the six (Principle 4) is directly concerned with a formal anti-bribery policy. In other words, the draft Guidance gives the clearest possible warning that what will count as adequate compliance is going to require considerably more than a simple document pinned on a notice board.

The authorities will look behind the formal documentation for evidence that businesses are taking steps to ensure that they are actually practising what their policies state that they preach. In other words, it is Principle 2 - being able to demonstrate that those who control a business have done whatever it takes to change its culture so as to make bribery unacceptable – that will be the real benchmark for anti-bribery compliance.

So, as part of the process of gathering information and thinking out appropriate systems to get ready for the new Act, businesses should ensure two things: 1. That they have taken account of all six principles.

2. That they will be able to demonstrate how those principles informed the decision making processes which generated their compliance systems. Remember that the day may come when that all has to be proved in Court.

Watson Burton’s regulatory team will be running seminars about the Bribery Act in early 2011, after the Guidance has been published. Please get in touch with partner Richard Arnot to find out more about the seminars. Email him at richard.arnot@watsonburton.com or call 0845 901 0914

The basic stance of the draft Guidance is resolutely non-prescriptive.

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The National Renewable Energy Centre (Narec) is, in the words of its chief executive Andrew Mill, “A national centre of excellence based in the north east playing to an international stage.”

ec is building three new worldleading component and system test f cilities for the fa offfshore wind and d marine renewable industrie

Narec’s Clothier Laboratories

Narec - The catalyst for renewables in the UK

The catalyst for renewables in the UK Narec’s

core competencies are undoubtedly at the top of the global agenda.

Research, commercialisation and innovation in wind power, marine renewables, distributed energy and the electrical network are essential to power the country’s future energy needs and to grow this vital industry.

In the five years that Andrew Mill has led Narec, it has become established as an internationally recognised research, development, test and demonstration facility for the accelerated development and deployment of new technologies.

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The Centre’s existing facilities include a wind turbine blade testing facility, the UK’s only independent Photovoltaic R&D Centre and the Clothier Laboratories, one of the world’s largest ultra high voltage testing laboratories.

Now, with clients across America, Asia and Europe, Narec is building three new worldleading component and system test facilities for the offshore wind and marine renewable industries. Project Nautilus - a new 3MW marine drive train technology development and testing facility will open in 2011 as will a new 100m blade facility for the next generation of larger offshore wind turbines. A proposal for Project Fujin - a 15MW drive train facility for the offshore wind industry also has

the support of the Energy Technologies Institute (ETI) and is a result of nearly two years of engineering development and consultation by Narec and the ETI. Furthermore, Narec is progressing with proposals for an offshore wind demonstration facility off the Blyth coast. This follows the award of an £18.5 million grant earlier this year from the Department for Business Innovation and Skills (BIS) to fund the initial site infrastructure, including establishing an electrical grid connection of up to 100MW. A lease has been granted by The Crown Estate and it is estimated that Narec’s proposed scheme will require further private sector investment in excess of £300 million.

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Narec - The catalyst for renewables in the UK

It is immensely exciting to be at the cutting edge of such important resources, and to help the UK and other countries drive forward their capacity. Our facilities are world-class and they enable North East England to continue its long history of pioneering innovative energy solutions Andrew Mill said: “We carry out two types of mission oriented research. There is the problem-based sort where clients require an immediate response and swift resolution, and longer-term research which often involves European or public sector competitive funding.

We play a key role in both areas. Either undertaking the research in-house or pulling together specialist teams from across academia and industry to ensure that research is of market quality. In the longer-term we anchor companies in the UK because the technology is created and based here.

“This combination of enabling and initiating developments in renewable energy characterises Narec’s approach, and is vital in maintaining the UK’s leading position in the renewables sector.

“The UK is the biggest generator of electricity from offshore wind in the world, and also leads the world in tide and wave power research and development.

The coalition government has outlined plans to create a £200 million network of Technology and Innovation Centres (TIC) to drive growth across the UK and bridge the gap between universities and businesses. These will help to commercialise the outputs of Britain’s research base.

Narec’s experience and expertise is aligned to the core aims of the TIC model. The Technology Strategy Board is anticipating that it will be in a position to decide the criteria for choosing the centres to invest in as TICs by April 2011.

Vince Cable, Business Secretary, says: “These

24

centres will help take ideas from the drawing board to the market place. They will play a key role in helping firms develop new products and processes so they can grow and prosper.”

Each TIC will focus on a specific technology where there is a potentially large global market and a significant UK capability.

In renewable energy, Narec has been working with some of the leading universities worldwide for some time, supporting collaborative projects between industry and university researchers and commissioning work produced from university research.

“It is immensely exciting to be at the cutting edge of such important resources, and to help the UK and other countries drive forward their capacity. Our facilities are world-class and they enable North East England to continue its long history of pioneering innovative energy solutions.”

Narec’s new facilities, to test up to 100 metre long offshore wind turbine blades, will be the largest in the world. A single blade is the length of a football pitch. Each blade will be rigorously flexed, stretched and broken in specific ways to test strengths and weaknesses. The testing will accelerate the brutal marine conditions

each blade will have to endure out at sea.

Andrew Mill said: “Robust testing combined with our interpretation of the results and recommendations will provide the information project developers and manufacturers need to improve their products. They urgently need to validate and improve the future reliability of next-generation prototype machines.”

“Our new facilities have been designed to stimulate technology inspired sector growth of an indigenous industrial base in the UK; to ensure that we are at the forefront of the global technology race for renewable energy products and services.”

“Each stage of this process, from component development, sub-assembly testing and whole system prototyping and demonstration helps to de-risk the technology,” said Andrew Mill. “Accelerated life testing provides confidence in the reliability and performance of the technology, which in turn bolsters financial commitment and helps bring new components and wind turbines to market.”

Andrew Mill has established a network of expertise across the UK for marine renewable testing with the European Marine energy Centre (EMEC) in Orkney, which tests prototypes, and the Wave Hub in Cornwall, the world’s first array demonstration site for wave energy technology.

biggest power plant of its kind in Europe, capable of meeting 10% of the UK’s energy needs. The North Sea has the largest sites and to reap full benefit the UK must attract the industry to supply, operate and maintain these future farms from our shores. Narec is key to the UK offering.

Andrew said: “Innovation is an increasingly important part of the UK’s economy. Our innovation capability is strengthened through our close relationship with stakeholders. We work hard to ensure we are close to government, the Carbon Trust, Crown Estate, and are leading the national debate.

“My role involves finding out more about which companies are thinking of coming to the UK, and ensuring they are aware that we will provide them with the best service. Our work is increasingly global, which means the way we do business is going to change to suit different cultures.”

He sees the spotlight on Narec as a national and international hub for the renewable industry as hugely important for the whole of the north east.

“We will be able to galvanise manufacturers, suppliers and the whole river system to service this growing sector. The marine environment involves challenges that the North East has dealt with in oil and gas. The region’s lengthy experience and expertise in marine technology is an important strength as we drive forward.

“The next five years are about ensuring we have our assets in place so we can attract international manufacturers into the UK. The knock-on effect of that will create opportunities for suppliers to set up close by, which will stimulate serial manufacturing on our rivers.”

Narec’s priorities in the future will continue to focus on accelerating the commercialisation of renewable energy technologies and working to ensure that they provide significant economic benefit for the UK. As more companies and technology are established in the UK, Narec will develop alongside these organisations.

Narec’s Project Fujin – the world’s largest offshore wind drive train test facility – was named by Andrew Mill. He said: “Fujin is the Japanese god of wind, and it is said that he blew away the clouds to bring clarity. That exactly describes Narec. We aim to take away risk and uncertainty by providing insight and clarity.” clarity.

Dogger Bank is the largest site identified for offshore wind in The Crown Estate Round 3 programme and has the potential to be the

Andrew Mill, CEO, Narec

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Energising the

future Energy

related reforms were prominent in the spending review 2010 from a coalition which has stated that it aspires to be ‘the greenest government yet’.

Plans for a Green Investment Bank will proceed, and feed-in tariffs for small scale renewable generation will also go ahead. The government will also publish a new Carbon Plan in 2011 to help to bring about the shift to a low carbon energy economy.

The changes that caused the most reaction, however, were those relating to the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.

The CRC Scheme aims to achieve the government’s target of cutting CO2 emissions by 80% (from 1990 levels) by 2050. In October’s spending review the government announced that the mandatory scheme is to be simplified “to reduce the burden on businesses”. CRC allowances will not now have to be purchased until 2012, a year later than first stated, although they still have to cover 2011-2012 emissions.

It also announced that money raised from selling CRC allowances will be kept by the government rather than reinvested in participating businesses as a cash back incentive, as originally set out.

Around 5,000 businesses will form the core of the CRC scheme, with another 25,000 expected to register and measure their carbon footprint, but which are unlikely to have to pay.

The news that the CRC will now effectively be a tax has not been received well by many businesses, although the CBI welcomes the

26

government’s commitment to electricity market reform.

CBI Director-General Richard Lambert said: “This is necessary for bringing forward investment to renew our energy infrastructure.”

The CRC has forced the issue of carbon reduction up boardroom agendas. This was originally in part because of the league tables within the scheme, which would link to the perceived reputations of participating businesses. It is not certain that the league tables will stay in place now that recycling allowances to participating companies have gone.

There is an ongoing landlord and tenant issue which has been exacerbated by the decision to stop any recycling payments. Landlords may now argue that CRC is a ‘tax’ which they can recharge to tenants.

The British Property Federation is aiming to achieve an industry standard in the allocation of responsibility between landlord and tenant for CRC costs.

“

Energising the Future

Carbon management will have a prominent place on the agenda of many UK organisations for decades to come

There are steps to take to ensure your organisation, if it is to be covered by the CRC, is prepared for the introduction of the scheme.

”

at half-hour intervals. Having a smart meter will grant your company an ‘early action metric’, as will the award of Carbon Trust Standard. An early action metric will boost your company’s placing in the league table – if the table goes ahead.

First, be clear about your current carbon management. Assess carbon emissions across the entire organisation, including subsidiaries. The CRC applies to those businesses which used more than 6,000 megawatt hours of electricity in 2008.

The CRC requires a long-term strategy from businesses to manage carbon emissions. The price of carbon will continue to rise and there may be further changes to the CRC, such as when we hear the government’s response to the Climate Change Committee report. This suggested postponing the auction sale for allowances until April 2016, at the beginning of phase three.

From April 1, 2012, organisations in the CRC will have to buy carbon allowances at £12 per tonne of CO2 to cover their emissions.

Although the payment has been effectively deferred for a year, it still covers 2011-2012 emissions, so it’s wise to begin budgeting for that now.

What is certain is that carbon management will have a prominent place on the agenda of many UK organisations for decades to come.

Part of the cost of the CRC scheme will be in the administrative process of measuring carbon emissions. Some companies such as Tesco are investing in specialised IT systems to carry out the work, which will involve measuring, documenting and reporting emissions. Ensure the process throughout your organisation is efficient before you have to put it into practice.

Find out how the energy group can help you by getting in touch with Duncan Reid.

Call 0845 901 0954 or send an email to duncan.reid@watsonburton.com

You could install automatic meter readings (AMR) to capture, store and retrieve electricity and gas data

27

Article Title

DurhamGate

Much DurhamGate, the £100 million landmark regeneration development at County Durham has proved that collaborative, creative partnerships can defy the negative effects of a lengthy recession.

As many developments throughout the UK have been mothballed or cancelled, DurhamGate has continued to drive forward.

of its momentum is down to the commitment and complementary strengths of development partners Carillion Developments and Arlington Real Estate. The active support of Durham County Council, regional development agency One North East and the Homes and Communities Agency has helped stoke momentum.

In 2007 the developers bought the 60-acre former Black & Decker manufacturing site in Spennymoor, still home to the firm’s European Research and Development Centre, and set about transforming it into one of the region’s largest business parks, with the capacity to create more than 2,000 jobs. The scheme was awarded planning permission to build 440,000 ft² of offices, a hotel and family pub, 20,000 ft² of restaurant space, 9,500 ft² of retail and 376 houses.

Neil McMillan, development director for Carillion Developments, said: “From a property development point of view we were particularly interested in investing in the North-East. Durham is an internationally recognised city and County Durham is ideally placed to draw the workforce from both Tyneside and Teesside and across the North-East.”

In 2010 a multi-million pound funding package from the developers, Durham County Council and One North East paved the way for vital infrastructure. This included road upgrades, including a fifth exit on the Thinford Roundabout, and a new roundabout on the A167.

Allan Cook, director of Arlington Real Estate, said: “The infrastructure improvements are an exciting step forward, not only for DurhamGate, but for the area as a whole, because they resolve a major transport issue which has constrained the potential of the area for many years. Since securing planning permission, we have continued to work hard to ensure our plans become reality and this highways funding allows the first visible signs of delivery to take place for all to see.”

The developers announced the first major occupier at DurhamGate in 2010. Sedgefield Borough Homes, County Durham’s largest social housing provider, is to locate its purpose built headquarters at the development.

Sedgefield Borough Homes’ 170 staff will move in by the end of 2011.

The scheme has now reached an exciting milestone. Demolition work began in November 2010 to remove defunct buildings and make way for a new boulevard, which will form part of the major highways upgrades. The main hub of the DurhamGate site, and the first phase of office space, will also be developed at the area currently being cleared.

Development partner Allan Cook said: “I am delighted that DurhamGate is now recognised as a priority strategic regeneration project at the forefront of the county’s regeneration agenda.

Throughout these extremely difficult times when many similar projects have faltered we have continued to invest to drive the scheme forward into the physical delivery phase which is now paying dividends. DurhamGate is a destination for a more positive future and as our first occupiers move in I am more confident than ever that DurhamGate will create a lasting legacy that we can all be very proud of."

The developers’ commitment to the region is apparent in its choice of professional team.

Architects Faulkner Brown and lawyers Watson Burton both have headquarters in the North East.

Ged Parker of County Durham Development Company said: "DurhamGate is now the key regeneration priority for Durham County Council, and is a hugely significant site. We are working closely with the developers and are confident that it has what is required to be a successful regeneration scheme, bringing jobs and investment to the region."

DurhamGate drives 28

forward

29

laterally

Property news and trends

thin k for property ‘Recession’ and ‘innovation’ are more closely related than you may think. In property development they interlink to become a driver of schemes large and small. As Paula Jamney of Energizer said: “Unless you really want to compete purely on price, the ability to offer sustained innovation is the one genuine competitive edge left.”

T

here are few developers or landowners who need to be told about the value of innovation. It propels performance, share price strength and growth.

Being innovative within a property business is, however, difficult. The core staff remaining in companies are likely to share common values and approaches to doing business – not the best starting point for off the wall thinking which can spark innovative initiatives.

“

30

The continued low interest rates have also sparked a recovery in the prime property investment market of leading European cities, including London. The impact on development, however, is more difficult to forecast, particularly in the regions

Yet lateral thinking has seen the emergence of some successful joint ventures, and funding arrangements with major third parties which are breathing new life into major property schemes throughout the UK. The success of DurhamGate, for example, the £100 million mixed use development close to the A1, relies on the complementary strengths of its joint venture partners, Carillion Developments and Arlington Real Estate. Together they combine skills which help significantly with overheads while keeping building standards high. The scheme has continued to drive forward this year, and recently welcomed a major occupier, Sedgefield Borough Homes.

The appetite for joint ventures, forward funding and forward sales can be seen throughout the UK, with a perceptible trend towards equity participation in place of debt.

The south east and London are setting the pace, with some vibrant hot spots of development which we are currently advising.

The continued low interest rates have also sparked a recovery in the prime property investment market of leading European cities, including London. The impact on development, however, is more difficult to forecast, particularly in the regions.

Major cuts in public sector capital spending have resulted in far fewer chances for councils

The LIBV public-private joint venture means that a public sector body offers one development partner options to buy sites, conditional on criteria and targets being met, rather than transferring properties at the outset of the partnership. Once the private Accelerated development zones (ADZs) sector partner is chosen, a masterplan can then which are a form of tax increment financing be designed and planning permissions (TIF), are recommended by the Centre for sought.

Cities to fund infrastructure from future increases in tax revenue caused by new The neatness of this idea lies in the fact that developments. The Centre for Cities Report it leaves payment for sites until later, when recommends that “TIF/ADZ pilots should market conditions have improved. The price be used to speed up the creation of a full paid will reflect the improved market. LIBVs scheme from 2011, when public sector aim to keep the momentum moving, finances come under increasing strain. encouraging developers to begin and Legislation will need to ensure that complete schemes more quickly than they TIFs/ADZs are only used for unviable would otherwise have been able to do. regeneration schemes and that there is Innovative ideas abound in the property appropriate strategic oversight over where market, some of which will undoubtedly and how they are used.” hasten its recovery. Legislation is an Another kind of joint venture - local important aspect of kickstarting a return to incentive-backed vehicles (LIBVs) - health to encourage development and have been created to allow councils to buy investment. One thing is certain - developers, and develop public sector brownfield sites to landowners, banks and their legal advisers help motivate the private sector to make a have never been keener to see significant long-term investment commitment of up to movement in the sector.

20 years in a particular site. to partner up with the private sector to fund regeneration. The cuts have also hit the ability to fund infrastructure which is so often key to the viability of planned development sites, particularly in cities.

Find out how the real estate team can help you by getting in touch with Simon Scougall.

Call 0845 902 2067 or send an email to simon.scougall@watsonburton.com

31

insuring future business Article Title

Insurance

Expiring

or increased insurance premium comes at a time as many firms are facing reduced or flat budgets. Typically, insurers “rate” the risk on the previous years turnover, which for a number of professionals, was a significant year in terms of revenue.

This has had the effect that a number of professionals have seen premium increases without any increased claims activity. This has led to some businesses looking to reduce the total amount of insurance cover they have purchased previously.

Professional indemnity insurance, however, covers the firm for work that could have been completed many years ago, when many professional firms were extremely busy and perhaps engaged on higher value cases. Before deciding to cut insurance levels they must be very sure that nothing is likely to come out of the woodwork from those relatively hectic years.

Claims made

Company Care

Professional

As

indemnity policies are written on a ‘claims made’ basis. This means that the insurers who defend the claim are those providing cover when the claim, or circumstances is first notified to insurers, rather than when the work was undertaken or the alleged mistake made.

One of the effects of a lengthy recession is that some claimants will look to recover the diminishing value of assets by suing property and professional advisers who assisted on transactions involving those assets, often property-related. The figures bear this out.

Watson Burton is a firm I have known and respected for many years. I use and recommend them because they give quality, pragmatic, realistic and timely advice.

They also have a great understanding of their business sectors, which from an insurance perspective is critical. They also have the unique ability of balancing the demands of an insurer client and an insured client without compromising Ted Langer

High Court negligence cases launched against professional firms jumped 125% to 332 in 2009, up from 147 in 2008. The numbers of claims are likely to remain as high if not higher this year.

Professional firms are now facing an increasingly litigious outlook, with fee disputes adding to the volume of claims. The advent of ‘Conditional Fee Arrangements’ has increased the volume of claims being made and has also increased the cost of defending those claims.

The life-cycle of claims has altered significantly in recent years. In 2007 90% of notifications were circumstances which might give rise to a claim rather than full-blown claims. It took between 18 months and two years for a number of these ‘circumstances’ to become formal claims. We are now seeing a much shorter period between first notification of circumstances and a formal claim being made, and that has an impact on the insurance cover for the coming year due to increased defence costs.

soon as you become aware that someone is likely to make a claim against you, or intimate circumstances which may lead to a claim, get in touch with your broker and/or insurer without delay. It is important for all professionals that a valid notification of a claim/circumstance has been made as soon as possible. A number of policies have the notification provision as a “Condition Precedent” and failure to comply with such a provision could invalidate your policy. It will help to have the expertise of your broker and insurer on-board at the earliest possible time to ensure that the matter is handled in both a proper and cost effective way. Claims cooperation is a policy condition in virtually all PI policies and is something that should be embraced rather than resisted. It is vitally important that full disclose is made to insurers as soon as practicable so they can confirm the policy will respond to the allegation/claim, thus ensuring the professional has peace of mind at what can be a distressing and worrying time for them.

Within your company make sure that you have complete records of work carried out by all staff. Your file is probably the single most important component of any defence to a claim, and files where there is missing or incomplete information will be much harder to defend.

Each firm should commit time and significant effort to professional indemnity proposals.

They could make a huge difference to your business in the future. Think carefully about your level of cover and excess, and be aware of the potential impact of what might come through in 2011-2012 from work completed years earlier.

Ted Langer, Lockton Companies LLP

32

33

Re

“ solved

Dispute Resolution

Flexibility is the key, in terms of geography, approach and resource. Our team is based in Newcastle and Leeds but, through our office at 30 St Mary Axe, the “Gherkin”, we have access to the London insurance market

Richard Palmer, head of dispute resolution, writes about one of the inevitable side effects of the recession - a rise in dispute resolution activity. Although some commentators suggest that the expected litigation boom has yet to happen, our experience has been that claims are on the increase and, in the professional negligence field in particular, potential claims that have been known about for the last year or two are now being progressed with some vigour.

We

expect that trend to continue as businesses turn their attentions from survival and “getting their own houses in order” (in the cases of the financial institutions, for example) to seeking recompense from their service providers and suppliers for perceived shortcomings.

In dealing with disputes, whether bringing claims or defending them, businesses are now increasingly seeking value from their advisers.

Litigation is often viewed as a “distress purchase” and clients can often question what value their advisers can add to the process.

That value, in our experience, can always be demonstrated, above and beyond excellent legal and procedural knowledge. An example of this is the national reputation we have built and maintained based on quality and value in the professional services sector.

Flexibility is the key, in terms of geography, approach and resource. Our team is based in Newcastle and Leeds but, through our office at

34

30 St Mary Axe, (the “Gherkin”), we have access to the London insurance market. We see our clients at their convenience and are able to offer national standards and coverage with regional charging structures. ‘City service without the City cost’ as a national legal directory puts it.

Recently, we have been instructed to defend claims for professionals in the North West, the North East, Yorkshire, the Midlands, as well as London and the South East. We have also successfully defended a globally recognised engineer both in the High Court of Paris and then in the French Court of Appeal.

Different clients have different aims and we spend time getting to know what they are.

Some clients want a purely commercial approach, some want to protect reputations and some are willing to invest time and effort in building up a negotiating position, so as to enable greater overall savings to be made at the settlement stage. What all of our clients demand (and we expect to provide) is that our advice is given at an early stage and a strategy

is agreed with them so that they get best value from us in the conduct of any litigation.

In our experience, the key factor for clients choosing a legal team to assist in the resolution of a dispute is the added value they can bring to a case rather than the geographical locations of those advisers. Having a team of skilled practitioners who get to the heart of a case quickly and establish its strengths and weaknesses from a legal and technical viewpoint and suggest an appropriate strategy to then resolve it, is of paramount importance.

That helps to explain our track record of winning significant clients throughout the UK. We are also adept at finding out what is driving our opponents and using that to our advantage in designing the appropriate tactical approach to a case. For example, are they risk averse?

Do they want to maintain a continuing relationship with our client?

The litigation procedure is not one to be followed slavishly but rather one which can be used as a framework to achieve intended aims.

Processes such as mediation, whilst helpful, should not simply be a default position to resolve disputes; face to face meetings can often be a powerful way of demonstrating confidence in a case. Adaptability is the key.

With expertise in all major business sectors and in practice areas such as commercial litigation, fraud, regulatory and licensing, personal injury and insurance we provide the strength and depth that can reassure clients.

We are also able to offer clients flexibility in our resourcing of a case and in our charging structures. Our Dispute Resolution team consists of specialists at all levels so that work is carried out at an appropriate cost whilst retaining partner led expertise and strategic direction.

Above all, however, we aim to help our clients grow their businesses, and we are experts in resolving disputes. By providing value and quality we set you on course for a successful outcome, in line with the needs of your business.

Find out how the dispute resolution team can help you by getting in touch with Richard Palmer. Call 0845 901 0944 or send an email to richard.palmer@watsonburton.com

35

What next for the NHS?

Healthcare

A White Paper, Equity and Excellence: Liberating the NHS, was published by the coalition government in July 2010 signalling major changes for the NHS.

Mary Coyle, Chair of North Tyneside Primary Care Trust

These

include phasing out primary care trusts (PCTs) and strategic health authorities (SHAs), to establish GP consortia and an independent NHS Commissioning Board. The White Paper also proposes changes to the way public health services are delivered, with the setting up of a new Public Health Service and the transfer of responsibility for health improvement to local councils.

There are strong messages throughout the White Paper about patients being at the heart of the NHS with greater choice over their healthcare – it says that in the future ‘there will be no decisions about me without me’.

Services will be joined up to deliver the right care at the right time in the right place by strengthening the relationship between local councils and the NHS and increasing the ability of councillors to make sure that the health and social care needs of local people are met.

Other messages are that health spending will be increased in real terms in each year of this parliament and that over the next four years the NHS’s management costs will be reduced by more than 45%.

36

Since July there have been opportunities for the NHS and the public to comment on the proposals in the White Paper through a number of national consultations.

As this article goes to publication a health bill is expected which will provide greater clarity on the new arrangements for commissioning, together with a White Paper which will outline more details about the proposals for public health.

Stronger voice for patients

Patients

will be at the heart of the NHS, through an information revolution and greater choice and control – they will have the choice of any provider, choice of consultant-led team, choice of GP practice and choice of treatment. The collective voice of patients and the public will be strengthened through arrangements led by local councils, and at national level, through a new powerful consumer champion, HealthWatch England which will be based within the Care Quality Commission.

So what does all of this mean?

Greater involvement of GPs

PCTs

will be replaced by GP consortia. PCTs will be abolished from 31 March 2013 but over the next two years will have an important task in supporting practices to prepare for these new arrangements.

GP consortia will be responsible for managing the combined commissioning budgets of their GP member practices, using those resources to improve healthcare and health outcomes. This means they will commission the majority of healthcare services.

GP consortia will have a duty of public and patient engagement and will need to engage patients and the public in the commissioning process.

New arrangements for public health

More

information about public health will be set out in a White Paper later this year. The Public Health Service will be responsible for vaccination and screening programmes and will have New NHS Commissioning powers over the management of public Board health emergencies. PCT responsibilities support GP consortia, a statutory for local health improvement will transfer to NHS Commissioning Board will local authorities. be set up. This will be in shadow form as a special health authority from April 2011, going live in April 2012. It will Local democratic legitimacy provide leadership for quality improvement of NHS through commissioning and will promote patient and carer involvement. It will allocate government will strengthen resources to GP consortia and will commission the local democratic specific services that cannot solely be legitimacy of the NHS commissioned by GP consortia. These which will include the setting up of health include primary care services such as those and wellbeing boards. These will allow provided by GPs, dentists, community councils to take a strategic approach and pharmacists and opticians. It will also promote integration across health and adult commission maternity services and highly social care, children’s services, including specialised services that are provided in a safeguarding and the wider local authority small number of centres because of the agenda. level of expertise required.

To

The

Proposals to improve quality and strengthen regulation

The

Care Quality Commission will act as quality inspectorate across health and social care for both publicly and privately funded care. Monitor, the current independent regulator of foundation trusts will be developed into an economic regulator from April 2012, with responsibility for all providers of NHS care from April 2013.

Proposals for NHS foundation trusts

The

government will increase the freedoms of foundation trusts and give NHS staff the opportunity for a greater say in the future of their organisations. All NHS trusts will become or be part of a foundation trust and will have an opportunity to transform their organisations into employee-led social enterprises that they themselves control.

37

Healthcare

The UK healthcare sector is set for significant change. The impacts of these changes are far-reaching.

Best of

Health

“

Watson Burton’s guidance has helped us grow throughout the region. We value the legal team’s good judgment and sector knowledge, and their commitment to helping us succeed Helen McArdle, Helen McArdle Care

38

”

Forthcoming legislation will be based on several current consultation papers including the ‘Equity and excellence: Liberating the NHS’ White Paper, a White Paper on public health, a review of arms length bodies, a new financial and legal framework for the funding of adult social care, and a new information strategy.

Common themes in these consultation papers are: accountability to patients; “bottom up” not “top down” decision making; patient choice and “payment in accordance to performance”, reflecting outcomes not just activity. To facilitate these changes there are radical alterations proposed to the current system including the introduction of the NHS Commissioning Board and GP commissioning consortia.

The planned abolition of practice boundaries, which may allow GPs to open branch surgeries in an attempt to provide patient choice and introduce a competitive market, could see some consortia growing significantly and others losing many long-term patients.

The intended creation of a single form of contract for primary medical services is also set out within the White Paper. The NHS Commissioning Board will be responsible for

GPs and DENTISTS The introduction of CQC as the overseeing body for all healthcare will affect dentists’ and GPs’ working arrangements. Further changes such as the mandatory introduction of central sterilisation and storage departments (CSSD) into buildings might prove physically impossible for some dentists whose practices tend to be physically constrained. GPs will have to decide how they create an audit paper-trail to establish that the CQC requirements are met along with the paperwork necessary to facilitate the commissioning of services.

Watson Burton’s healthcare team is currently advising healthcare professionals on multioccupancy buildings with some GPs, who have decided to share their primary care space with other primary health care providers such as dentists, pharmacists, occupational therapists, and physiotherapists.

The provision of single site primary health care centres is an area which is likely to grow in the future. With an ageing and increasingly obese population, GPs, Health Care Trusts and Foundations face the problem of meeting ever increasing demands for primary healthcare from an increasingly less mobile patient base.

No bail out The White Paper states that the changes are being undertaken to ensure: “the best use of funding. We are very clear that there will be no bail-outs for organisations which overspend public budgets.” Clearly good legal advice will be needed in terms of general commercial contracts, development agreements, facility agreements with banks, European procurement legislation and employment law.

Employment

Public Health

Equity and Excellence also examines employment implications, particularly for healthcare providers. The White Paper clearly states that “the NHS will employ fewer staff at the end of this Parliament” and that the workforce will be “rebalanced” towards clinical staffing and front-line support. At the same time there will be a “ban on age discrimination in the NHS services and social care to take effect from 2012”.

The Public Health White Paper, published in December, will see a newly created Public Health Service to integrate existing bodies, provide a focus on research, analysis and evaluation and be responsible for the appointment of the director of Public Health and vaccination and screening programmes.

Local authorities will assume responsibility for the function of public health, with a ring-fenced budget.

This commitment to cutting staff numbers together with the proposed abolition of primary care trusts and strategic health authorities means there will be significant redundancies.

The White Paper makes it clear that the government wants direct line managed employer-led pay decisions rather than government involvement.

Procurement disputes in the healthcare sector have to take into account new processes in commissioning clinical services and the Cooperation and Competition Panel. It means that in-depth knowledge of the NHS is required by advisers acting on behalf of NHS bodies to avoid, resolve or minimise procurement disputes.

Once GPs have taken over the commissioning of healthcare services the consortia will need to employ additional staff to undertake the commissioning. The need for practical, skilled employment advice will be a key issue for healthcare professionals engaged in commissioning. Our employment lawyers are helping healthcare clients deal with such organisational change. They have extensive experience in the primary care sector and acting for NHS Trusts including claims relating to discrimination, whistle blowing, senior medical and non-medical staff terminations, redundancies and negotiations with trades unions.

The speed of change and variety of challenges faced by all healthcare professionals means that advisers have to be sure-footed to guide clients effectively to the best solution for each individual case.

these contracts, along with new contracts for dental services, community pharmacy and primary ophthalmic services.

A new patient champion organisation to become known as HealthWatch England will be established as part of the regulator, the Care Quality Commission (CQC).

In 2011 the CQC will introduce a new registration system to bring the NHS, independent healthcare and adult social care sector under a single set of quality and safety essential standards. This will include all dentists, who will need to be registered with CQC by April 1, 2011. Many dentists are finding the completion of the registration forms time consuming, and are reporting approaches being made from organisations seeking to charge large fees for “taking away” this administrative burden.

Find out how the healthcare team can help you by getting in touch with Henry Cave. Call 0845 901 2072 or send an email to henry.cave@watsonburton.com

39

Our approach Patrick Harwood, chief executive officer, outlines the five key priorities identified by the firm to benefit our clients.

Strategic Management

Most

The depth and severity of the global economic

crisis has forced organisations all around the world to review their business models and take steps to protect their operating margins. Not surprisingly, a large number of businesses have identified the outsourcing of professional services as a key area for potential savings on cost.

In addition to the specific threats and frustrations that have been presented in their own markets, client businesses have generally been reviewing their legal support requirements as part of a wide ranging cost reduction programme.

1. Our clients

Our clients’ needs are changing and we recognise the importance of continuously adapting and improving our service offering to ensure that it meets, and where possible exceeds, our clients’ expectations. Our mission is to develop productive partnerships with clients, working collaboratively to ensure the most effective service provision, helping to drive efficiency and improve performance in both our businesses.

2. Our market position

Our market position must demonstrate that we are a firm committed to delivering Like many others, in order to ensure the quality in all we do. Our relationship based long term future of our business we reached approach to serving clients, complemented the difficult decision in early 2009 that a by a rigorous commitment to cost “downsizing” process was necessary. As a management allows the firm to deliver firm which had, for ten successive years, national level expertise at regional rates experienced year on year growth of more with a physical presence that meets the than 10% and average staff turnover rates needs of national clients. of only 3% this represented a very difficult process for everyone.

A number of the firm’s people were faced with the challenge of finding a position elsewhere. Whilst this was a genuinely distressing time for the firm, almost all of those who left have now been able to achieve moves into positions that have provided them with either career enhancement or personal stability in terms of their onward career. The dignity and generosity shown by those who took this step has been an enduring example to all those who remain.

The necessary redesign of the firm’s long range business plan included the establishment of a new investor group during 2009. This group, whilst formed from people already working in the business, has provided the firm with a newly invigorated sense of the future and significant new working capital resources. Attaining the firm’s long term vision of success has been the leadership focus adopted by this group, whose sterling efforts are now providing the energy and motivation to move the firm forward through one of the toughest times in our history.

This leadership team has identified five key strategic priorities which have been developed over the last twelve months and will provide the foundations for further growth and achievement over the next five years for the benefit of our clients.

40

Five strategic priorities

businesses have faced pretty tough trading conditions over the last We will consolidate our position as a commercial practice of national significance and two years and in many cases, the industry successfully support our clients by focusing on the following five priorities; sectors in which they operate have experienced fundamental changes on unprecedented levels.

planning that has been done over the last two years. We will continue to jealously protect one of the key qualities that have made the firm successful over so many years; being a good place to work.

4. Our common purpose Our common purpose is to be a genuine national firm of quality. We have built our five year business plan around this. The strategic priorities that we have identified and the engagement that has been sought at all levels within the firm are providing the foundations for this success. Working together, efficiently and with clear direction, our firm is emerging from the dark days of the financial crisis as a highly cohesive and confident business, fit and ready to tackle the opportunities that lie ahead.

5. Our new start

Our new start recognises that, over the past two years, there has been a generational change in the leadership of the firm. Whilst 3. Our people accepting that the economic environment Our people truly are our greatest asset. The will remain challenging in the short term we hard work and dedication shown by all our remain determined to move forward with a people during the last two years has been sense of optimism for the future. Our focus exemplary. Our commitment to providing on growing and developing the business over opportunities for continuous development the next five years is energetically supported within a stable, progressive, enjoyable working by our clients, our people and our friends. environment has been at the heart of all the

Moving forward We are an ambitious and progressive business – run as a commercial organisation, by commercially minded people. This orientation to commercial behaviour ensures that we deliver commercially sound, pragmatic solutions to clients on a nationwide basis and not just a legal perspective.

The five commitments identified by the new investor group present challenges and opportunities for the firm in the coming years. Most importantly though, the direction that has been given has put the firm on course to deliver the best possible service to our clients from an environment that promotes a commitment to excellence in all that we do.

2011 sees the firm enter its 200th year. This heritage is testament to the firm’s best characteristics; pride in the work we do and a commitment to building strong relationships with our clients, our people and our friends. We enjoy our work and we believe our clients enjoy working with us.

We look forward to meeting the challenges that the next 200 years may bring and further developing our national firm of quality.

Find out how Watson Burton can help your business by getting in touch with Patrick Harwood. Call 0845 901 2091 or send an email to patrick.harwood@watsonburton.com

41

Community commitment

Something you didn’t know about us...

Something you didn’t know about us...

Welcome Community involvement is one of our central values. Over the years we have focused our support of charities on those which are making a real difference to younger people as they approach adulthood.

What a difference a year makes Superheroes

A new government, Eurozone concerns, local enterprise partnerships, oil spills, mining disasters and an imminent Royal wedding. The outlook for UK business in the year ahead remains mixed, with good signs for the private sector, alongside concerns about impending cuts in the public sector.

The Watson Burton sandcastle - Big Ben

To give you a greater insight into the personalities at the firm all CVs on the website now include an additional section called ‘something you didn’t know’.

James Harrison, Associate

Sara Stanwix, Solicitor

Kevin Anderson, Associate

Patrick Harwood, CEO

Christine Hannant, Finance Manager

Here are six of our lawyers and personnel and six “something you didn’t know” facts. Can you guess which fact matches which person?

See the bottom of the page for answers!

Mark Lawton, Partner

Jonathan Bloxham, founder of Northern Chords

We are well aware of the huge part that give them the confidence and skills they need We are proud of our sponsorship of the training and education has played brings to with boostclients their own The new format of BrieflyNorthern Legal Chords look at festival, strategicwhich management We in are working wholives. morehad outto adapt to changing helping each of our people get have together talented young chamber musicians offers informed opinion from and reveal a few things you didn’t We take part in a host of events for Fairbridge of life, and how that in turn gives our law from the UK andabout beyond.

It encourages experts about challenges facing know some of our people. circumstances to survive and to raise funds. This year, for example, five of firm the skills, energy and momentum youngsters to listen to and get involved in the education, health, energy succeed.toWe are also advising our trainees became superheroes for a day to We hope you enjoy reading the succeed.

This year’s festival included a those who are creating exciting, and real estate sectors. chamber music. complete a 200 mile ‘Coast to Coast’ cycling new Briefly Legal and find some innovative products and services talent competition to find the next generation We question valuable insights within its pages.

By supporting charities and sponsorships challenge Eldon Square shoppingventure centre, capitalists which will help to driveat postof chamber musicians in North East schools, bankers funding for which open up opportunities for youngerrecovery pedalling non-stop 11 hours, andabout raising recession for the UK. forand with the winner performing at The Sage,Hall Gillian businesses find out more people we hope we are creating chances significant funds for Fairbridge as and a result.

Gateshead.

Senior Partner about the London Olympics, Our commitment to clients goes which could help to change the lives of Watson Burton Other projects included taking part Decommissioning with North the Nuclear beyond just providing quality some of the North East’s next generation.

Our commitment to community involvement East schools the ‘Inspire Project’, whichand Authority (Narec) legal advice. We work withinyou gets results that help Fairbridge and other Every year Watson Burton makes charitable helps primary school pupils find out about to identify opportunities and DurhamGate. charities achieve their aims, and brings cash donations and volunteers its services to businesses first-hand, create networks that will help pave and partnering with together our people who work hard to create Major new legislation,tosuch as a nominated charity, which this year construction companies and schoolchildren theisway to future business success. and carry out successful fundraising events all the Bribery Act, and changes to Fairbridge. It helps 13 - 25 year olds going raise funds for Children North East at the 16th That same thinking has driven year round. insurance are explained, and we through particularly difficult times, and aims to ofAnnual Sandcastle Challenge. the content this publication.

242

The firm has recently undergone a brand refresh which included the launch of our new website. The website showcases the full range of support we can provide to clients and the breadth and depth of our lawyers expertise.

1.

2.

3.

4.

5.

6.

They used to swim for England as a junior but has since become less athletic. To reverse this trend, this person now intends to increase their fitness level in order to compete in the Iron Man triathlon within the next three years.

This person likes all animals, but especially loves cats. One of their fondest memories stems from a very unique Christmas gift. The gift was to hand feed a lion at Paradise Wildlife Park. This person is not very tall and as such the lion came close to their shoulders in height. By their own admission, this person very nearly changed their mind at the last minute, but did not let down the team at Watson Burton who gave them the gift.

Being from Liverpool, this person obviously loves the Beatles, and is in fact a distant relation of one of them with an uncle’s cousin being none other than Paul McCartney!

This person is a fan of the big fight era, which provided much enjoyment when younger. They once met legendary boxer Mohammed Ali in Austick's bookshop in Leeds, during the signing of Ali's autobiography. Ali demonstrated the sheer enormity of his size when this person’s entire hand fitted into the palm of Ali's hand.

This person was born in Skipton, Yorkshire on the day of the Aberfan Disaster. This was also the same year that England last won the World Cup. Building, racing and collecting motorcycles have been a constant passion for this person who still competes from time to time in trials events.

This person is a member of the Metallica fan club and recently met the band on their “Death Magnetic” tour of the UK. They are also in the process of planning their wedding in Las Vegas in 2011.

1. Kevin Anderson, Associate 2. James Harrison, Associate 3. Patrick Harwood, CEO 4. Christine Hannant, Finance Manager 5. Mark Lawton, Partner 6.Sara Stanwix, Solicitor

Community Commitment

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x93710_WB_cvr_p10_sw_x93710_WB_cvr_p10_sw 09/12/2010 08:20 Page 1

Article Title

BrieflyLegal Narec: A national centre of excellence

The catalyst for renewables in the UK LIMBERING UP FOR LONDON

Martyn Kendrick of Lloyds TSB Commercial answers questions about the London Olympic Games

VENTURE CAPITAL & INVESTMENTS Your questions answered

...a superb level of service Legal 500, 2010

1

watsonburton.com

INSURING FUTURE BUSINESS What you need to know now by Ted Langer, Lockton Companies LLP