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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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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DK Rewinds: maintaining and manufacturing spares for traction motors

May 6, 2017

DK Rewinds a Smethwick family business founded in 1976 by Mr Harbhajan Singh Bhogal, has two sites in the area, employing over 60 full time staff, including three electrical engineering apprentices.

It provides a “One Stop” repair and rewind service for traction motors in the utilities, rail (below) and industrial sectors.

It has a dedicated staff and specialist equipment providing a comprehensive maintenance service for those three sectors.

Its extensive CNC machine shop manufactures spares for many different types of electric motors in use all over the world today.

 The British rail freight company English, Welsh and Scottish Railway Company (EWS) was taken over by DB Schenker but trains still carry the EWS liveries and logos

The company was visited last year by London’s Deputy Mayor for Transport, Val Shawcross, who met staff and talked about their work.

Balvinder S Bhogal, managing director and Val Shawcross

DK Rewinds supplies components and undertakes repairs to keep London Underground trains operational. It specialises in repairing the traction motors that power Central Line trains, producing new components for motors that match the originals so that faulty trains can be quickly fixed and brought back into service.

Balvinder Bhogal said: “We have been working with Transport for London for 30 years as a key supplier. This has enabled DK Rewinds to invest in our workforce, which includes training apprentice and graduate engineers. The work we receive from TfL is very important to the Midlands and the region benefits greatly from these business links.”

The latest news: DK Rewinds attended the Freight in the City’s summit, Improving the last mile’, on 1st March 2017 at Edgbaston Stadium.

 

 

 

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Warrior Doors in Tyseley

March 26, 2017

Warrior Doors Ltd is an SME manufacturing company making stainless steel, aluminium and fully glazed high security doors  for commercial properties, industrial premises, banks, bullion dealers, jewellers, local authority housing and housing associations. Two items from many on their website have been selected:

They were the main contractor to manufacture and install secure communal entrances and rear doors and stainless steel bin store doors for 35 buildings for Solihull Community Housing in Chelmsley Wood.

Many of the communal entrance doors had experienced vandalism damage and were not secure – a cause for concern for both current and potential tenants.

Warrior Doors provided a safer living environment, vermin and vandal proof, attractive, welcoming communal entrances and an entrance to their home allowing high levels of light into the space and visibility for tenants.

The second had a remarkable film which dramatically demonstrated the effectiveness of the Warrior door and shop front screen: Warrior Door Vs BMW 5 Series – RAM RAID Fail. It recorded the whole attack – and the way in which Warrior’s equipment saved the shop owner, his daughter and grandchild, two customers and the stock from loss and injury.

 

 

 

 


Will the new business tax accounting system for SMEs be more onerous and expensive?

November 19, 2016

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Earlier this month Marco Forgione and other people running small and medium-sized businesses wrote to the Financial Times about a ‘flawed’ government consultation on significant changes to business tax reporting:

In just over a year’s time all businesses will be required to file accounts digitally five times a year (every quarter plus an annual final trading statement).

The government’s website on its proposals, Making Tax Digital, is worded positively:

wmp-sme-tax

The writers’ comment:

“For the first time in the UK’s history the government will prescribe the way in which all businesses file their accounts, using government approved software. This will require many micro, small and medium-sized businesses to invest in new accounting systems”.

 

 

 


Will Chancellor Osborne cripple the ‘makers’?

February 18, 2016

george osborneChancellor George Osborne closed his 2011 Budget speech by setting out his aspiration for “a Britain carried aloft by the march of the makers”.

In 2014, the Boston Consulting Group described UK manufacturing as a “rising regional star” in terms of the competitiveness of national manufacturing – despite setbacks, notably to steel producers, which could damage other areas of the economy. Mr Osborne please note.

Sukand Ramachandran sees moderate wage increases, offset by productivity gains and the UK’s direct-manufacturing cost structure improved by up to 10 percentage points relative to other leading Western European manufacturing export economies, according to the BCG Global Manufacturing Cost-Competitiveness Index:

“The UK has also improved its competitive position compared with Eastern European nations such as Poland and the Czech Republic, as well as with Asian economies such as China. As a result, manufacturers of everything from toy trains to fashion garments are reshoring production. In a recent Manufacturing Advisory Service survey, 11% of small and midsize manufacturers in the UK said they had brought production back from overseas in the previous 12 months—twice as many as said they were shipping work abroad”.

Mr Ramachandran recognises the strong advanced manufacturing ecosystems in the Midlands (engineering and components suppliers), Oxfordshire (automobiles), Bristol (aerospace), East London and Warwickshire for high-tech manufacturing.

But late last year it was quietly announced that the Business Growth Service, including the Manufacturing Advisory Service and the Growth Accelerator programme, is being closed down.

Should Osborne’s MAS decision be added to Luke Landes list of Pennywise – pound foolish actions?

david bailey 5It is said that the closure will ‘save the Government £84 million’, but Professor David Bailey (Aston Business School), who has written two articles in the Birmingham Post about this decision, pointed out that its substitute – an investment of £12 million per year into 39 local growth hubs led by local enterprise partnerships – is “peanuts”. He describes the BIS suggestion that MAS will effectively be replaced by local growth hubs as misleading:

  • “For a start, the £12 million across 39 LEPs works out at just over £300,000 a LEP. Peanuts.
  • “Secondly, while LEPs here in the West Midlands have prioritised manufacturing as one of their key sectors as part of their strategic plans. What about those LEPs that don’t prioritise manufacturing? In such cases, local growth hubs are unlikely to offer much support – if any – to manufacturing firms.
  • “Thirdly, the growth hubs are simply unready in many cases to take on the mantle”.

Professor Bailey says that the closure of MAS raises wider questions about the Government’s commitment to using industrial policy to support manufacturing, noting that ‘there’s effectively been radio silence from the BIS Secretary Sajid Javid since he came into office in May’.

He ends: “If the government was trying to end parts of the Business Growth Service that can now be delivered by professional consultants, then that might make sense. But in ending the whole service, the Government has effectively scrapped a range of unique expertise on manufacturing improvement that was highly valued and trusted by industry as impartial. ‘Throwing the baby out with the bathwater’ is the phrase that several industry experts have used.

“The Government needs to rethink this ill thought out decision”.


Birmingham-based ADI group

February 3, 2016

Birmingham City Council leader John Clancy has said that the only chance of future success is to create wealth and jobs through capital spending – and his vision is for Birmingham to become a city of 1,000 small and medium sized businesses: “Business growth is essential. This is an entrepreneurial city and I am absolutely determined the way we move forward is through economic growth”.

We highlight one of many such businesses now. A link in the Brummie leads to Business Desk’s news of the Birmingham-based ADI group has announced it is planning to create 500 new jobs by 2020, doubling its staff in five years.

adi logoADI Electrical was established in 1990 by Alan Lusty and has grown over the years, the Group now having 15 limited companies with a head office in Kings Norton, Birmingham. It offers building & refurbishment, electrical, engineering compliance management, environmental, maintenance, manufacturing automation & information systems, mechanical, project management, system efficiency, and utilities systems.

adi employeeMore recently, we read, the business has developed a working relationship with North Bromsgrove school and also has an on-going association with Aston University Engineering Academy to help encourage young people into a future career in engineering.

“A skills shortage is an increasing area of concern for many businesses within the engineering sector,” said James Sopwith, group sales & marketing director: “Which is why we have an apprenticeship programme, to encourage and inspire more young people to enter into the sector.”

(Above right: Employee of the Year Winner: Farhaan ‘Faz’ Kazi, Quality & Standards Coordinator)

The business believes in local jobs for local people and in giving back to the community in which it is based.

adi 2 b30It is already part of the Business in the Community (BITC) initiative and works closely with local deprived or homeless people, giving them a business placement. Many gain confidence and some have gone on to gain permanent positions within the business.”

Enda Mullen (Birmingham Post), comments: “As the business continues to grow, adi Group seems well placed to help inspire future generations from across the region and beyond, not only within the engineering sector but also from a business development perspective”.