BOROUGH OF POOLE
ECONOMY OVERVIEW & SCRUTINY COMMITTEE
21 May 2009
INFORMATION REPORT BY ECONOMIC DEVELOPMENT MANAGER, PLANNING & REGENERATION SERVICES
HOW THE BOROUGH OF POOLE IS HELPING BUSINESSES AND INDIVIDUALS THROUGH THE ECONOMIC DOWNTURN
1.0Introduction
At the last Economy Overview & Scrutiny Committee, members requested information on how the Council is helping businesses and individuals through the current economic downturn. A seminar was held on 6 May at which Council officers and representatives of Jobcentre Plus explained the full range of activities being pursued.
There is also a commitment to publishing a monthly e-newsletter providing both local and national news and a range of economic data. For the purposes of this report, the last e-newsletter issued in April and sent to all members has been updated to reflect new information presented at the seminar on 6 May. See Appendix 1 below.
2.0Local economic situation
Over the last year, there has been a sharp rise in the number of people in Poole claiming Job Seekers Allowance (JSA) from a low base. This is clear from the graphs shown in Appendix 2. However, the percentage of JSA claimants is still below that of the UK. The latest data published by the Office of National Statistics (ONS) shows that the number of claimants in Poole stood at 2462 in April (3.1%). This represents a rise of 88 (0.2%) on the March figures and a rise over 12 months of 1604 people. The UK currently stands at 5.9% and the South West at 3.1%.
Over the last year in Poole, there have been significant redundancies at Woolworth, BK Bluebird, Air Bearings, Dolphin Print and Exchange & Mart. The recession has also had an impact on the number of investment enquiries recorded on the Property Pilot database. From 1 April 2007 to 1 April 2008, there were 1010 enquiries recorded. This fell to 688 in the last 12 months.
The area has also seen an increase in first time benefit claims and callers at Poole Citizens Advice Bureau (CAB). Enquiries at the CAB have increased from 450 new clients per month to 780 per month.
However, the good news is that the commercial property market is still active and recently an extension to the Arena Business Centre at Cabot Lane and the refurbishment of Link House in West Street in the Town Centre have been completed. Merlin Entertainments Group, the world’s second largest visitor attraction company, is to move all its global Head Office operations to purpose-built offices on the second floor of Link House. News has also been received that John Lewis will be opening a new concept store in Poole in the autumn creating 100 new jobs.
Report prepared by: Peter Wheelhouse, Economic Development Manager, Planning & Regeneration Services, 12 May 2009
Tel: 01202 633032
APPENDIX 1 - E-NEWSLETTER – MAY 2009
HOW THE BOROUGH OF POOLE IS HELPING BUSINESSES AND INDIVIDUALS THROUGH THE ECONOMIC DOWNTURNLOCAL NEWS
1. AREA ACTION FORCE
The Area Action Force brings together the Council’s Economic Development Team, other local authorities, Jobcentre Plus, South West Regional Development Agency, Business Link and the Learning & Skills Council. The purpose is to react as quickly as possible to support staff at risk of or under notice of redundancy and to explore how businesses can be supported in this harsh economic climate. The focus is not only on businesses contracting but also on those wishing to expand.i) Support for staff at risk of or under notice of redundancy
ii) Advice and support surgeries for small businessesiii) Work with businesses to develop exporting and joint venture opportunities
iv) Work to promote inward investmentPartners in the local Area Action Force have a fortnightly tele-conference and there is a 6 weekly round-table meeting to review activity. Reports are passed to the Regional Economic Task Group chaired by Minister for the South West, Ben Bradshaw MP.
There is evidence to suggest that news of significant redundancies has slowed down.Businesses are typically cutting back on any optional investment and seeking to cut costs. Bank finance is increasingly available but only where borrowers have viable propositions and at a cost.
For further information on the Area Action Force please contact:
2. TOP 40
20 of Poole’s largest companies have already been visited. Arrangements are being made for visits to the remaining businesses.Contact:
3. PROMPT PAYMENT OF INVOICES
Borough of Poole has committed to pay the invoices of small local businesses as quickly as possible. Where the council knows that the supplier is a small local business that requires prompter payments, they have been encouraged to mark invoices for immediate payment. This enables a manual processing of invoices ahead of the normal contractual payment deadline.4. CREATIVE CABINS
A partnership between Poole Town Centre Management, Arts Development and Economic Development is working to address this issue. Students from the Arts Institute at Bournemouth and Bournemouth University together with representatives of the local arts community now have the opportunity to display their work in a range of vacant shops within Poole (at present most frequently the Town Centre High Street.)
The result is a range of interesting and engaging pieces of work including fashion, graphics, installation pieces and traditional works of art aiding in increasing the vibrancy and vitality of retail areas.
This idea has been well received in the region with the South West Regional Development Agency promoting it to other authorities. So far, Swindon, Gloucester, Plymouth and Southampton have received the toolkit. The idea is also referred to in recommendations set out in the DCLG document ‘Looking After Town Centres’. (Please see link below).
5. LOCATION POOLE
An initiative to promote Poole as a location for TV and film production that is already delivering results. Currently, Poole is hosting GMTV. This year, Poole has also attracted the BBC, Maverick Productions, Turn TV, Darlow Smithson and Rocket.6. BUSINESS DIRECTORY
The Council’s Economic Development Team has been working with colleagues in Bournemouth, East Dorset and Christchurch to publish a business directory. The directory is now available in hard copy, interactive CD and web-based formats and is being used to help encourage local businesses to source goods and services locally. Already, all advertisers have received a complimentary copy. The Economic Development Team is working with various business organisations to ensure that the directory is widely circulated.For further information on the Business Directory please contact:
7. OTHER SUPPORT TO THE COMMUNITY
Poole Partnership has been working with the Bournemouth 2026 Partnership to consider how the community can be supported. Meetings were held in November and February to bring ideas together.
Responses so far include:
•Poole News article Feb/March
•Special supplement: Financial Inclusion - Poole Housing Partnership and Bournemouth Borough
•Housing Advice and Options service at Civic Centre or FREEPHONE
* Additional contribution to CAB to support a debt counselling service
•Citizens' Advice Bureau - extended hours
•CAB new service with 2 GP practices
•Poole Housing Partnership Financial Inclusion Project
•Mon£y Matt£rs - Faithworks Wessex personal budget coaches
•Hamworthy Money Advice Project
•CAB's developing one stop shop on Website
•Work with partners eg Pension Service to promote benefits and allowances
8. PROMOTION OF BENEFIT PAYMENTS TO INDIVIDUALS AND SMALL BUSINESS RATE RELIEF
Borough of Poole is supporting a Dorset-wide campaign launched in January aimed at encouraging working parents to claim for entitled benefits. Also, the council encourages eligible small businesses to apply for the Small Business Rate Relief Scheme. Currently, 1,176 businesses in Poole receive rates relief through the scheme. The Small Business Rate Relief Scheme is publicised on the council’s website.
NATIONAL NEWS
1. BUDGET – APRIL 2009The main provisions for business include:
New Measure
/Impact in the South West
Supporting BusinessIncrease to enhanced capital allowance rate to 40% for one year / All regions where businesses invest in plant and machinery will be able to benefit from the temporary first year capital allowance of 40% for 2009/10
To further help the cash flow position of viable businesses that have become loss-making, trading loss carry-back for business will be extended from one to three years, for up to £50,000 of losses, and now covers losses made in 08/09 and 09/10. This temporary enhancement is estimated to help 140,000 businesses over 2 years. / In South West it is estimated it will help 11,200 businesses
Building Britain's Future: New Industry, New Jobs, published by the Government in April 2009, identifies the way that Government action can support the UK’s economic renewal and future growth, for example by building on the UK’s strengths in manufacturing, services and the science base. In support of this, to ensure the UK is in a stronger position to take advantage of opportunities as the global economy returns to growth, the Government will establish a £750 million Strategic Investment Fund to support advanced industrial projects of strategic importance. / This policy will help to support industries in all regions including the South West
Businesses will be able to spread payment of this year's inflation up-rating to business rates over three years. / Businesses in the South West will benefit from deferring payments of £50 million business rates from 2009-10
The Economic Challenge Investment Fund is a Higher Education Funding Council for England backed £50 million match funding scheme providing real help now for individuals, businesses and others as a route to economic recovery. It will benefit over 10,000 businesses and nearly 50,000 individuals through various projects including provision of help for small and medium enterprises, internships and knowledge transfer partnerships. / Over £5million will be allocated to the South West through the ECIF
The Business Link Health Check entails an holistic review process covering a range of issues including Strategy and Planning; Customs and Markets; Operations and Productivity; People and Skills; and Finance and Systems. / 3,521 Health Checks delivered since 23/10/08 in South West.
At the Pre-Budget Report, the Chancellor announced the creation of a new HMRC Business Payment Support Service. This allows businesses in temporary financial difficulties to spread their tax payments over a timetable they can afford. / Over 13,170 businesses in the South West have benefited from arrangements made with HMRC giving them more time to pay their tax bills.
Enterprise Finance Guarantee Scheme (Small Business Finance Scheme) to support up to £1.3bn of bank lending to smaller SMEs.1 / In the South West, nearly £13m of eligible applications from around 180 firms that have been granted are being processed or assessed.
RDA transition loan funds - these funds have enabled 156 businesses to borrow £17.8 million to date out of the total £43 million. As the Enterprise Finance Guarantee is now fully operational, these funds will close once fully committed.2 / No loans have been offered to business, out of a potential £5m.
Temporary increase in the threshold at which an empty property becomes liable for business rates. For financial year 2009/10 empty properties with a rateable value of less than £15,000 will be exempt from business rates. / Relief applicable to owners of empty properties with rateable values below £15,000, estimated to cover 77% of empty properties in the South West
The main provisions for helping people include:
New Measures / Impact in the South West
Helping People
Budget announces a £500m fund to stimulate housing development in the short-term and boost capacity in the house building industry in the long term, which will deliver up to 10,000 homes within the next 2 years. This will include funding made available to local authorities for construction of new social homes, capped at £100m and time-limited. The rest of the housing supply funding will be used up-front either for equity, infrastructure or gap funding, and to address downstream sales risk through Home Buy Direct and affordable housing. / To stimulate housing development in the South West, funding will be made available to local authorities in the region for construction of new social homes. Further funding to restart stalled housing sites will be open for bids from developers in the South West.
The Government is announcing that from October 2009, all 18-24 year olds who have been claiming Jobseeker's Allowance for 12 months will be guaranteed 6 months of meaningful activity, either a job, a work placement or work-related skills training. / In February 2009, there were over 28,100 people aged 18-24 claiming Jobseeker's Allowance in the South West
The Government is announcing an additional £1.7 billion for the Department for Work and Pensions, to ensure that Jobcentre Plus capacity is in place to respond to rising unemployment and that employment programmes can continue to provide effective support to those who become unemployed. / In February 2009, 15,900 people moved off Jobseeker's Allowance in the South West
At PBR08, Govt announced that the standard interest rate (SIR) used to calculate Support for Mortgage Interest (SMI) would be maintained at 6.08% for 6 months until June 2009. Bud 09 announces that Govt is maintaining the SIR at 6.08% for a further six months / In August 2008, there were 14,932 SMI claimants in the South West
An additional payment alongside this year's Winter Fuel Payment, worth £100 for households with someone aged over 80 and £50 for households with someone aged over 60. / 850,000 households, of which 220,000 households contain someone aged 80 or over.
Budget announces a package of measures to support pensioners with savings that have been affected by low interest rates including increasing the capital disregard in Pension Credit and pensioner related housing and Council Tax Benefitto £10,000 in November 2009. Of 2.7 million pensioners eligible for pensions credit, around 540,000 will benefit from this measure. / This will benefit eligible pensioners by an average of £202 annually
Raising the ISA limits for all from 2010 will give adults who have ISAs the opportunity to increase their tax-advantaged savings. 1 in 3 adults currently have an ISA / On average 1 in 3 people aged over 50 have an ISA and will benefit from the opportunity to save more in their ISA. There are 1,933,300 people aged over 50 in the South West.
Increase the child element of Child Tax Credit by £20 above indexation in April 2010 / 530,000 children benefiting
The Government will contribute an additional £100 every year to the Child Trust Fund accounts of all disabled children, with severely disabled children receiving £200 per year. / In the South West there are around 7,000 children that will benefit
From 6 April 2009 the income tax personal allowance for those under 65 will be £6,475, up from £6,035. / In the South West 1,890,000 basic rate taxpayers under 65 will benefit.
An additional £1.3 billion to continue delivering effective support for the unemployed; the establishment of a high-profile National Employment Partnership, to bring together major employers and government to tackle rising unemployment; strengthening Local Employment Partnerships to focus on the short-term unemployed as well as harder to help groups; and extension of Rapid Response Service to support smaller redundancies as well. / In the three months to February 2009, over 47,500 people have moved off Jobseeker's Allowance in the South West.
PBR announced a New Year payment of £60 for each pensioner. A £60 payment will also be made to 2.5m individuals who are in receipt of certain other benefits. / Over 1.1 million pensioners in South West received a £60 additional payment.
The Saving Gateway will be introduced nationally, with the first accounts available to savers in 2010. The 2008 Pre-Budget Report announced that the Government would make a contribution of 50p for each pound saved in the scheme. Eligibility will be passported from qualifying benefits and tax credits. The Government recently announced that those receiving Carer's Allowance will be eligible for the scheme. / Potentially of benefit to 565,000 people in the South West.
Health in pregnancy grant - £190 for all women after 25th week of pregnancy. / Projected claims from April 09 to April 10 are 55,000 in the South West.
Increase the child element of the Child Tax Credit by £75 above indexation in April 2009. / 280,000 families and 530,000 children benefiting in the South West.
Increase Child Benefit from £18.80 to £20 pw for the first child and from £12.55 to £13.20 pw for subsequent children – brought forward from April 2009 to January 2009 / 582,000 families and 1,042,000 children in the SW are benefiting from the increase in Child Benefit made on 5 January 2009.
Measures designed to build a low-carbon economy include:
New Measures / Impact in the South West
Building a low-carbon economy
Budget announces package of environmentally focused measures, including initiatives to improve energy efficiency: extension of the decent homes programme to include insulation; support for projects to improve energy efficiency of schools, hospitals, and other public sector institutions; and low cost loans and advice for businesses. / For the South West this package will mean that energy efficiency is improved in: 10000 homes; an estimated 250 public buildings, including schools and hospitals; and through an estimated 300 loans to businesses
UK sustainable energy projects stand to benefit from up to 4.5bn euro of new capital lending from EIB.
The Government is bringing together the EIB, banks and developers to ensure this new framework lending and other products deliver rapid and sustained investment for UK renewable energy. The Government believes that this initiative can bring forward £1bn worth of consented small and medium sized UK renewables projects to deployment. / Of the 3.8 GW of onshore wind projects currently in the pipeline, which stand to benefit from this finance, England has 22%
Source: South West Regional Secretariat, SW Councils, May 2009
2. BUSINESS LINK are now the main point of contact for business support, advice and guidance and are offering real help to support those in times of hardship. This also includes monies available to support business growth. Locally, the Economic Development Team works closely with Business Link to ensure that Poole based businesses receive the maximum support available.
3. JOB CENTREPLUS are working to support those people who have been made redundant with the following services on offer:
New Deal: Employers that employ New Deal customers (customers that are working with their Jobcentre Plus Personal Adviser to get the skills, experience and help they need to get jobs and stay in employment) may be entitled to a job subsidy. 18 – 24 year old New Deal customers: Full Time (30+ hrs) £60 per week / Part Time (24 – 29 hrs) £40 per week and a training allowance of up to £750. 25+ year old New Deal customers: Full Time (30+ hrs) £75 per week / Part Time (16 – 29 hrs) £50 per week.
Work Trials: Work Trials are an opportunity for an employer to find out how well a person is suited to a job at no cost to the employer. A Work Trial is suitable for most jobs over 16 hours a week and lasting at least 3 months. Work Trials can last from as little as 1 day to as long as 30 days. Think of it as a working interview for the proposed candidate.
Employer Offer: £500 paid initially with a further £500 at 26 weeks. Access to £1500 of Train to Gain funding via the Learning Skills Council for customers that have been unemployed 6months+.
As part of the enhanced service, there is also on offer:
Pre-employment Training: (a two-week course tailored completely to employers’ needs for prospective candidates).
Full tailored support of a local Labour Market Recruitment Advisor: individualised to meet the needs of employers. Work Experience to aid employment retention (up to 13 weeks of work experience; the participant stays on benefit but receives allowance payments on top of their benefit).
Issue and sifting of job application forms:A fully tailored recruitment process that enhances your already positive recruitment practices.Support of a Jobcentre Plus Account Manager to facilitate ongoing working together - which could include presentations to the employer’s management team, offer other Jobcentre Plus support, liaise with teams across Dorset and Somerset and provide a personal point of contact.
4. FUTURE JOBS FUND
In the budget the Government announced that it would be introducing the Future Jobs Fund (FJF). £1bn will be made available to local authorities and their partners to bid to run programmes that will create 150,000 new jobs between October 2009 and April 2011.
The fund signifies the beginning of a new strategic relationship between DWP, CLG and local authorities
Who can bid?
- Bids from local authorities are encouraged – but bids will also be accepted from other public, private or voluntary/community organisations.
- Bids are expected to include an element of partnership working and to be led (in most cases) by local authorities.
- Jobs must be for at least 6 months, at least 25 hours per week, and above minimum wage. They can be in any sector – many may be in local authorities themselves.
- Jobs must be suitable for young people (18-24) approaching 12 months of unemployment (i.e. before they access Flexible New Deal provision)
- At least 100 jobs per application (not set in stone, but collaboration is encouraged to minimise number of small applications)
- Jobs must be additional – i.e. would not exist without FJF
- The work done must benefit local communities
- The maximum FJF contribution per job is £6,500 (average across bid)
- Match is desirable. Government would like to see councils using the fund in conjunction with other initiatives (around skills and training provision for example)