Post-Brexit, with an ageing workforce and a shortage of graduates with science, engineering or mathematics qualifications, effective training is needed for younger and older workers

February 18, 2018

 

In April 2017 an apprenticeship levy was introduced. It requires companies with a £3m payroll or above to pay 0.5% of it to the government in return for vouchers, which smaller companies can also access, to spend on apprenticeships . . .

The EEF’s summary – from the employer’s perspective

The FT’s Business editor writes: “It is now clear that the UK government’s apprenticeship levy simply isn’t working. Apprenticeships fell by more than a quarter in the last three months of 2017 year on year, having fallen by 60% in the previous three months. Since April, when the levy was introduced, there have been just 158,000 apprenticeship starts, compared with 269,000 in the same period a year before”.

Some universities are now offering degree apprenticeships

These offer the opportunity to gain industrial knowledge and practical, relevant experience by combining study with on-the-job training. Leeds Beckett University is one such provider for non-levy and levy paying organisations in Leeds City Region.

And at post-graduate level

The Engineering Integrity Society events have recently included Young Engineers Seminars in January 2018, July 2017, December 2016, for newly qualified engineers from different companies who are encouraged by more senior engineers to attend. EIS is a long established charitable society, which focusses on the areas of fatigue, testing and durability. EIS members have many years of experience in these fields gained through working in some of the best-known companies in the industry.

“The levy has led employers to recoup the cost of existing in-house training schemes by relabelling them as apprenticeships” 

This Times leader also points out: “Ofsted cannot cope and the reasons are not complicated. The new apprenticeships target has increased its workload but its budget has been cut by 38% over the last two parliaments: it stood at £200 million in 2011 and will fall to £124 million by 2020. Reversing this cut would be easy to justify if the apprenticeship levy were working, since this would in due course drive up wages and tax revenues as well as skills. But the levy is not working. It was meant to incentivise large employers to invest more in apprenticeships by requiring them to pay into a central fund from which they can claim back some or all of their training costs.”

MP Meg Hillier, chairman, adds that parliament’s Public Accounts Committee has found that private providers are paid with taxpayers’ money to deliver public services but that government sometimes fails to monitor the results or penalise those that do not deliver.

A number of private providers have failed – the most widely publicised being First4Skills (funded by the government’s Skills Funding Agency) – and including Talents Training and Shared Educational Services Limited – leaving the apprentices and the institutions which hired them in serious difficulties.

Undeterred, last month the Cabinet Office launched a policy paper: Shared Services strategy for government.

Mission impossible? “The government is seeking to boost the number of apprenticeships at the same time as slashing the budget for Ofsted who are responsible for enforcing quality”

This is the charge made in another Times article, by Joe Dromey, senior research fellow at the Institute for Public Policy Research, who has given evidence to the education select committee’s inquiry into apprenticeships.

The FT’s Business editor believes that the need for training and reskilling is imperative at a time when manufacturing is at a turning point, with the industrial internet about to revolutionise processes and business models and the integration and linking of big data, analytical tools and wireless networks with physical and industrial equipment. 

 

 

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What have Liverpool and Arsenal football clubs in common with Music Magpie?

January 29, 2018

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Football clubs were among the quickest to pay their suppliers. Liverpool managed an average of 27 days, beating Arsenal’s 35. Entertainment Magpie, as Music Magpie – an online reseller of CDS, DVDs and books – pre-owned, refurbished, and fully guaranteed –  was the fastest payer, averaging just five days, with 94% of invoices settled within 30 days.

Companies that have more than £36m annual turnover, an £18m balance sheet or 250 employees are now obliged to report to the business department twice a year their payment policies, practices and performance, due to concerns about the administrative and financial burdens faced by thousands of companies because they are not paid on time.

Small and medium-sized businesses may have to borrow to cover shortfalls and a shortage of cash can in extreme cases force them into administration.

SMEs are owed £14bn at any one time, according to the government. The Federation of Small Businesses says that late payment should be a top priority for government in 2018.  “FSB research demonstrates that a third of payments to small businesses are late with many turning to personal credit cards and overdrafts just to survive,” said Mike Cherry, the chairman.

Andy Bounds, Enterprise Editor of the Financial Times reports that filings at the Department for Business, Energy and Industrial Strategy (BEIS) reveal late payment of suppliers.

Most UK businesses take more than 30 days to pay their suppliers, with the average as high as 113 days. Filings by about 200 businesses show that only 29% of them manage to settle their accounts within 30 days or less on average, and that only 52% of invoices overall are paid in that timeframe.

UHY Hacker Young, the national accountancy group, which studied the filings, said the figures showed the government’s transparency push has “yet to make any significant impact on the culture of late payment”. It was reported that some businesses had standard payments terms of 120 days.

  • DS Smith, the paper, packaging and recycling group, had one of the worst records. Its recycling arm took 113 days on average to pay suppliers.
  • Waterstones, the bookseller, took an average of 69 days.
  • Clifford Chance Europe (a law firm) took 73 days.
  • Conviviality, owner of the Bargain Booze and Wine Rack chains, averaged 56 days.

None of the major supermarkets has yet reported its figures. Companies have until January or April to publish the data.

The business department said its new small business commissioner, Paul Uppal, would oversee a new complaints system and help to tackle late payments, potentially delivering a £2.5bn annual boost to the economy.

Richard Lloyd-Warne, partner at UHY Hacker Young, said: “Multiple governments have tried different ways to get bigger businesses to pay on time, including allowing them to levy interest on late invoices, and the much-delayed creation of a small business commissioner role.”

The new duty to report was “a good step” Mike Cherry, chairman of the Federation of Small Businesses said, but “changes need to go further to allow the naming and shaming of those businesses who are putting the squeeze on small firms”.

 

 

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Updating KPM Marine 2013: John Clancy’s legacy fund, the BSBLF 

December 7, 2017

Birmingham City Council leader John Clancy said earlier this year, “(Entrepreneurs) risk-takers are hugely important to the city economy, creating jobs and wealth. Given the right support, they can help us create inclusive growth across Birmingham, so I’m delighted that we’re able to support our SMEs through the new Birmingham Small Business Loan Fund.”

The Birmingham Small Business Loan Fund (BSBLF).is administered by ART Business Loans and supported by Birmingham City Council, Thin Cats peer lending platform and Unity Trust bank. It provides loans of between £10,000 and £100,000 for small to medium sized businesses (SMEs) in Birmingham that are unable to obtain any or all of the finance they need from high street banks.

KPM Marine, which we featured in 2013, (KPM safety products lead in global marine and automotive markets), has been able to use a BSBLF loan to provide working capital to help it take advantage of growth opportunities presented by recent shifts in the value of sterling.

KPM products and designs – in Mott Street, Birmingham – are the first choice of work-boat builders, military and rescue agencies throughout the world. Julian Morgan, Joint Managing Director of KPM Marine, said “We can find ourselves competing with some of the world’s largest manufacturers . . .  95% of our supply chain is based in Birmingham, which is not only good for the local economy, but also gives us greater flexibility, faster response times and better control over quality than sourcing products and materials from the Far East.”

In 2003 the Duke of York looked over Rikki Hill’s V24 ‘Bat boat’ under the watchful eye of Jules (Julian) Morgan, owner and design director of KPM Marine and founder member of Idea Birmingham.

Julian’s business partner, Joint Managing Director John Key adds: “We moved into the marine sector around 15 years ago and have developed our product range to include bilge pumps, engine reventilation systems, shock-mitigating seating systems and interior fit out modules. We are delighted to have won naval contracts on both sides of the Atlantic and in Europe. Our latest success is as part of the supply chain providing a fleet of up to 38 workboats to support the Royal Navy’s new flagship carrier HMS Queen Elizabeth”

Steve Walker, Chief Executive of ART Business Loans says: “KPM Marine is a good example of the type of business we are here to support – innovative and dynamic small to medium sized enterprises which are the lifeblood of the local economy, but which struggle to access finance from the banks.”

The BSBLF aims to lend £3m to Birmingham business over three years. To apply go to www.artbusinessloans.co.uk or call ART on 0121 359 2444.

 

 

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Berck of West Bromwich: worker-management co-operation, training and investment

September 26, 2017

Berck Ltd, a family-run company in West Bromwich, founded in 1947, took difficult decisions to weather the downturn following the 2008 economic crisis.

To reduce costs, the company chairman Brian Yates and the management team decided to cut 11 jobs in the firm, which employed 90 people (above). They also asked the remaining employees to cut working hours and they agreed to do this in order to help the company through the crisis. After applying for a bank loan secured against the factory buildings, there was still a question about Berck’s ability to pay its monthly instalments on the loan and the directors were asked to take a salary break of two years, and put in some of their own money.

These measures were successful and in 2015, Berck received a Made in the Midlands’ Manufacturing Achievement Award

Berck produces a wide range of precision components, including cabling and routing, brackets batteries, terminal contacts, in-tank fuel cell sensors, air bag technology, switching for dashboard systems, which are used in the majority of car manufacturing plants in the UK and overseas. Products are exported to China, Mexico, India, Brazil, Egypt, the United States, Dominican Republic and most countries in Europe. components. Berck also serves over twenty other sectors, including domestic appliances, home computers, alternative medicines, i.t networking and solar heating

Like many successful West Midlands companies covered on this website, they invest in training and new machinery.

Above: Joe Hickman, toolroom apprentice – more news of apprentices on their Facebook page.

Last year, Berck invested in a Nikon Metrology iNEXIV VMA-4540 CNC video measuring machine (below) to replace Mitutoyo Quick Vision Ace CNC optical coordinate measuring machine (CMM) and a Kemco manual touch-probe CMM to inspect sheet metal parts and tools. See the Nikon pdf.

The latest widely reported news is that in July this year, Berck acquired Walsall’s Fourjay, specialists in deep drawing. The staff from Fourjay will now move across to West Bromwich to join Berck’s 70-strong workforce. Darren Yates, managing director at Berck, welcomed the addition of people with a variety of new skills to their skilled workforce.

Berck will now be supplying the MoD with vital fuses for Typhoon Eurofighter and F-16 combat jets. May they be used only for defence.  

 

 

 

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Metro and Redwood: new banks offering loans and savings accounts for small and medium sized companies

September 7, 2017

Metro Bank started operations in 2010. Its first branch in the West Midlands will be the flagship operation for the region.

Business Desk adds that Metro Bank is the UK’s first new retail bank in more than 100 years, providing both retail and commercial banking services. The four floor Birmingham operation will also be slightly larger than its other outlets, which typically create around 25 jobs.

The model is based on a retail format and located at the heart of the busy shopping area.

Its website says: ” We’ve built a different kind of high street bank. A bank with stores that are open when it suits you, 7 days a week. A bank where you can walk in without an appointment and walk out with a working account, debit card and all. A bank that tells you exactly what you’re getting, in language that actually makes sense. A bank that puts you first”.

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Redwood Bank promises that its money is being invested in British businesses and our local communities

Redwood Bank, Britain’s newest business bank for SMEs, is open for business just over four months after securing its initial banking licence.

The FT reports that co-founder Jonathan Rowland said the uncertainty caused by the Brexit vote would continue to restrict appetite among the mainstream banks to engage in commercial property lending:

“This is an ideal time to apply for a full banking licence; the major banks have not returned to anywhere near their pre-crisis business lending levels and the uncertainty caused by Brexit is likely to worsen the situation.” Mr Rowland helped to restructure and recapitalise Kaupthing Bank Luxembourg, a subsidiary of the Icelandic bank.

Gary Wilkinson, co-founder and chief executive of Redwood Bank, said: “We are delighted to be open for business so soon following the issuing of our initial banking licence. We aim to offer a real alternative for small and medium sized organisations, providing them with simple transparent loans and savings accounts, great service and a promise that our money is being invested into British businesses and our local communities.“

 

 

 

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Arc Specialist Engineering Limited: Birmingham, Wolverhampton and Walsall

August 6, 2017

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Arc Specialist Engineering Limited, formerly known as Bowman Birmingham Limited, is a group of steel processing businesses formed in March 2013 which manufacture and supply various specialist steel products. Its majority shareholders were Marc and Nathaniel Meyohas (Greybull Capital, a family-owned, family-run business, see its dealings with Tata, Morrisons and more). Over the years the number of employees has grown from 200 in 2013 to 500.

In July 2017 Mobeus Equity Partners backed Arc’s management team buyout and refer to a partnership with the Arc managers.

Its strategies: to differentiate services and find niche markets

  • As UK manufacturers facing overseas competition, the Arc companies look for manufacturers of products that won’t travel well, because items that are easy to dispatch overseas face competition with countries such as China, South Korea and Taiwan.
  • They have found that small-volume manufacturing accesses markets that larger competitors wouldn’t enter, such as the pre-coated non-stick bakeware market. Many bigger coil coating businesses are coating 100,000 plus tonnes of metal per year; while Arc’s subsidiary Cooper Coated Coil (below) coats just under 20,000 tonnes per year.

  • PVC window and door reinforcement products access markets which require lower run quantities, more frequent deliveries and more product variety than larger firms are interested in offering.
  • Because relatively small amounts are manufactured Arc’s companies are good at ‘changeovers’ – converting an assembly line or machine from running one product to another
  • Its system enables the managing director of each business to be close to customers and employees within the business, providing not only the product itself, but also knowledge, advice and an excellent service, building strong long-term relationships.

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Over Greybull’s four years of ownership, time and resources were invested to turn Arc around. Andy Richardson, who leads the current management team, said: “The past four years have seen a transformation of Arc into a profitable growing business, with hundreds of jobs saved along the way, all made possible by much-needed investment in our manufacturing capabilities. We are immensely excited about the next stage of our journey, which would not have been possible without Greybull’s guidance and support. We are very grateful for everything they have committed to the business”.

 

 

 

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Thermotec news

December 12, 2016

thermotec-2-building

Thermotec Plastics, based  in Electra Park, Witton, is a Birmingham-based plastic and composites manufacturer, ‘bespoke supplier’ of engineered solutions in vacuum forming/thermoforming, polyurethane mouldings and super lightweight composites, working in several sectors including luxury automotive, off-highway vehicles, aerospace and defence.

PRW, the leading trade magazine serving the UK polymer industry, reported last year that Thermotec had received major funding to help support its plans to develop and expand the business. The group received funding approval from Birmingham City Council from the Greenbridge Supply Chain Programme for SMEs which can give grants for business support packages, part-funded by the European Regional Development Fund.

Thermotec’s managing director David Rose said the funding would allow the business to target more business and recruit up to 11 new staff, to join the current workforce of 50 employees, adding:

thermotec-machine“Receiving this funding from The Greenbridge Programme, combined with our own investment will allow us to put automated processes in place that not only increase productivity, but allow us to improve the environmental impact of our activities”. In April 2016 Thermotec announced the addition of a seventh Vacuum Forming Machine to  to support increased demand and new contracts.

crank-trayIn May Thermotec introduced a new crank tray for Jaguar Land Rover From paper concept to product was a 10 week process; and the timeframe for changes could be shortened to 5 Weeks. The whole project, from design to tooling and manufacturing has been done within a 50 mile radius in the Midlands.  

In addition to the new recruits it is aiming to hire, Thermotec has taken steps to upskill its existing workforce with the help of Made in the Midlands members InTraining – a process about which no information has yet been found.