Derbyshire County Council is setting £1 million aside to boost culture and creative industries across the county after Cabinet members approved plans. The funding, which will be earmarked from the council’s COVID-19 Recovery Fund, will be used to deliver a series of initiatives drawn-up in partnership with the Culture, Heritage and Tourism (CHAT) Board – a partnership which includes local councils working alongside some of Derbyshire’s key visitor attractions, higher education providers and organisations such as Arts Council England, National Heritage Lottery Fund, Marketing Peak District and Derbyshire, Arts Derbyshire and Derbyshire Museums and Heritage Forum. Leader of Derbyshire County Council, Councillor Barry Lewis, said: “Derbyshire has a vibrant creative community and rich cultural heritage which are key to the county’s identity and unique story. “The impact of COVID-19 has been devastating to Derbyshire’s creative and cultural economy, alongside the wider visitor economy, with those businesses that rely on attracting audiences and visitors some of the very last to return to normal operation. “This funding will help support these businesses which make a valuable contribution to the vibrancy and vitality of our county, and in particular our 27 market towns across Derbyshire, which we are supporting to recover from the pandemic and the trend for online shopping.”   The plans include a series of initiatives which will be launched to:

• develop and diversify Derbyshire’s creative talent
• celebrate Derbyshire’s cultural heritage, stories, landscape and people
• use culture and creativity to help revitalise and attract more people to Derbyshire’s town centres
• develop distinctive signature projects, of scale and quality, to provide attractions for local audiences and visitors
• provide leadership, support and collaboration for culture heritage and tourism sectors across Derby and Derbyshire.

James Berresford, chair of Derbyshire’s CHAT Board, said: “This is great news for the wider cultural sector in the county. The fund will provide a real boost to our already dynamic cultural offer. The benefits to both locals and visitors will be significant.”  

Accrosoft Limited, a recruitment and employee onboarding software company, has been sold to Acendre Technologies Inc., a global HR software business headquartered in the US. Based in Loughborough, Accrosoft was founded in 2008 by Alex Khakbiz and Mitesh Chauhan, experienced SaaS entrepreneurs. Accrosoft’s Vacancy Filler (VF) software streamlines talent acquisition and recruitment management for organisations. Foresight Group LLP originally invested in Accrosoft in August 2018. Since then the private equity investment manager has taken a proactive approach alongside the management team to strengthen the business, accelerating both product development and commercial activities. The company has established several strategic partnerships to extend the platform’s functionality and developed a range of features to strengthen its offering in its core markets, including education, the public sector, leisure and retail. This successful exit returns 2x to Foresight funds in a little more than three years with further upside for investors given the ongoing investment in Weduc. Prior to the sale of Accrosoft, its subsidiary, Weduc, was spun out with Foresight’s funds retaining their shareholding. Weduc is a communication platform sold into the education sector and was initially launched in 2017. The company has grown significantly since Foresight’s original investment, doubling its customer numbers over the past year following a £1.4m funding round in December 2020 led by Foresight and the management team. Weduc is expected to continue on this growth trajectory over the coming years, taking advantage of the increasing digitisation of the education sector. Acendre and Accrosoft’s VF product are complementary businesses and by joining forces they will be able to offer a recruitment and HR management software platform across a much wider customer base as well as establishing a presence in Europe. This transaction represents the sixth successful realisation by Foresight’s Private Equity team in the last 12 months. Alex Khakbiz, CEO of Accrosoft, said: “Foresight’s support over the last three years has been invaluable in taking our business to the next level. We are delighted to begin the next chapter of our company’s journey with Acendre, which will enable us to showcase our Loughborough, UK-born technology offerings on a global scale.” David Miles, senior investment manager at Foresight, added: “It has been a pleasure to work with Alex, Mitesh and the whole Accrosoft team over the last three years. This sale, to a large US buyer, validates Foresight’s approach of supporting regional UK businesses in their ambitions to become global players. This realisation delivers an attractive financial return to investors, while offering the opportunity for further upside through the remaining holding in Weduc.” Foresight and the other shareholders were advised by Acuity Advisors and Shakespeare Martineau. RSM and RW Blears provided tax structuring advice.

Business volumes rose for a second consecutive quarter in the three months to September, according to the latest CBI/PWC Financial Services Survey. Although growth slowed compared with the previous quarter, business volumes are expected to rise at a stronger pace in the three months ahead. The survey of 115 financial services firms, conducted between 31st August and 17th September, found a widespread improvement in sentiment and business volumes across the financial services sector in the quarter to September. The only exception to this was building societies, which were slightly less optimistic than three months earlier, amid a decline in business volumes in the three months to September and with a further decline expected in the three months ahead. This is likely related to the phasing out of the stamp duty holiday during the third quarter. Financial services firms reported that profitability improved at an above average pace in the three months to September, marking a second successive quarter of strong growth, with profitability expected to rise at a similar pace in the three months to December. Headcount across the sector as a whole was unchanged last quarter. Following the slight increase in the three months to June, this suggests that numbers employed have broadly stabilised after the sharp declines seen throughout 2020 and the first three months 2021. Headcount is expected to grow in three months to December. The outlook for investment is mixed. Growth in IT spending is gaining momentum, with investment in IT set to increase at the fastest pace for two-and-a-half years. Investment in land & buildings is expected to remain stable, though this follows sharp declines since late 2019, while spending on vehicles, plant & machinery is expected to fall further, though at the slowest pace since the onset of the COVID-19 pandemic. The main constraint on investment over the 12 months ahead was inadequate net returns, which was cited by around half (51%) of financial services firms, similar to the previous quarter. By contrast, the share citing uncertainty about demand fell to its lowest since 2014 (27%). Around one fifth (22%) of financial services firms cited labour shortages as a constraint on investment, unchanged on the previous quarter and in line with the long-run average. Ben Jones, CBI Principal Economist, said: “It’s great to see that the recovery in the financial services sector has firmly taken root, with volumes and profitability growing strongly for a second successive quarter. “Given the improvement in demand across the wider economy, financial services firms have every reason to be more optimistic and are ramping up their investment in new technologies. “The concern now is whether the pace of economic recovery in the UK can be sustained in the months ahead as energy costs spiral and labour shortages and supply chain constraints bite. It is imperative that government and business work together to address short-term challenges, unleash investment and set a sustainable course for the economy.” Isabelle Jenkins, Head of Financial Services at PwC UK, said: “I think that it is clear that the boost to optimism, volumes and returns is good news for the sector and particularly encouraging is the anticipated fall in non-performing loans, with both no doubt contributing to the continued confidence we’re seeing. “The resilience by consumers also plays a significant role however this may be tested if the much reported increases to household costs start to bite. “Elsewhere, the sector will be keeping a keen eye on the tightening of spreads, which reflects intense competition in key markets such as mortgages, plus a need to control costs to sustain returns will likely be on the to-do list of most in the sector. “Other factors, including competition for expertise in areas such as ESG continue to mount so although the outlook is broadly positive, there may be headwinds on the horizon.” Disruption Changes in regulation (90% of firms) and changes in customer preferences and behaviours (68%) are the biggest drivers of disruption for FS firms, with the majority looking to respond to disruption by employing new technology or adapting existing capabilities (72%). Advances in technology and business transformation (85%) and achieving operational resilience (74%) are seen as a clear priorities in FS firms’ future business strategy and transformation plans. Technology The survey asks financial services firms about their use of technology. When it comes to realising benefits from cloud, almost one third are at the benefits realisation stage (31%), most are at the transition stage (41%), and 16% are still at the implementation stage. Firms see understanding the customer and their interactions (55%) as the most valuable action to be gained from advances in AI and analytics. In terms of engagement with different parts of the technology sectors, financial services firms tend to see Established TechFins (52%), systems integrators (49%) and Big Tech firms (40%) as vendors, but are more likely to report actively partnering with emerging FinTechs (36%). More than half (52%) of FS firms see FinTech as being “somewhat important” in supporting their business functions, with just over a third (35%) seeing it as absolutely critical. FinTech is expected to make the biggest difference to FS firms through customer experience (74%). Operational resilience FS firms expect to invest more in cyber security over the next twelve months compared to the previous year (balance of +54%). Cyber resilience priorities include improving cyber breach detection (67%), responding to new threats (66%), and reporting and mitigating cyber security risks (66%). Upskilling Financial services firms are actively engaged in upskilling existing staff (78%), as well as recruiting new staff (74%) to equip their business for future skills needs. Almost nine in ten firms (89%) expect to automate standardised or repetitive tasks over the next five years in response to growing digitisation and new technology adoption. ESG issues FS firms are clear that diversity & inclusion (81%) and CSR (89%) are priorities for their business. Constraints on internal resource (50%) and lack of data (48%) were cited as the top barriers that FS businesses face in delivering their ESG agendas. D&I Actively increasing diversity at management level was cited by four in five firms (80%) as the most significant action taken to boost D&I. This was followed by actively increasing diversity on company board (74%) and within non-management areas of the workforce (70%). Perceptions of the FS sector FS firms believe that public perceptions of the industry have improved as a result of the COVID-19 pandemic (10% said significantly improved and 60% said moderately improved). Almost nine in ten firms believe that FS businesses have an increased role to play in society following the pandemic (44% strongly agreed and 42% agreed). Around two-fifths (42%) of FS firms have made significant changes to their products/services during the pandemic to ensure suitability for different types of customers, while a further 29% were currently reviewing products and planning to implement changes. Central bank digital currencies Half of FS business (50%) are not prepared for central bank issued digital currencies becoming mainstream and need to start preparing. Around a third (32%) are somewhat prepared in that they are aware of the impact and immediate business priorities.

Specialist engineering and construction company, Keltbray Holdings Limited, has agreed a deal with administrators, Grant Thornton UK LLP, to acquire a portfolio of infrastructure contracts and associated assets from nmcn PLC, which went into administration last Wednesday. The deal ensures continuity of delivery of vital infrastructure projects across the UK, minimising any adverse delivery impacts on customers, and secures the futures of 117 employees. The acquired contracts will be managed within Keltbray’s existing infrastructure division, reporting to Managing Director, Phill Price. Keltbray CEO, Darren James said: “Keltbray are pleased with the ‘on strategy’ opportunities presented by the acquisition of these contracts, working with clients on some of the UK’s most important infrastructure projects. “Today’s announcement accelerates our plans to build a resilient, growth-oriented business.  Equally important, we have also safeguarded 117 valuable jobs and livelihoods that could otherwise have been lost to our industry. “The acquisition has required a very rapid, but collaborative approach, and Keltbray would like to thank all parties for their proactivity throughout. I look forward to working with my new colleagues as we build a rewarding future together as one Keltbray.”

Revenue has dipped slightly at Shoe Zone, the Leicester-based retailer, according to a full year trading update. Unaudited results for the 52 weeks to 2 October 2021 indicate a total group revenue of £119.1m, down from £122.6m in 2020 and £162m in 2019. The company said this was impacted by the COVID pandemic mainly in the first half of the year as stores were closed for 16 weeks. All stores were open and fully trading as at the end of April 2021, however, enabling the business to trade over its key ‘Back to School’ period. Digital revenue was boosted in the year at £30.6m in comparison to £19.3m in 2020 (a 58.5% increase) and £10.6m in 2019 (a 188.7% increase). This now represents 25.7% of revenue, a result of Shoe Zone’s digital investment. The firm further noted that profit before tax is expected to be not less than £6.5m Chief Executive, Anthony Smith, said: “Shoe Zone has weathered an intensely challenging year due to the COVID-19 pandemic. The negative impact of this has been largely mitigated due to quick action taken in areas we could control, by reducing costs, continuing and accelerating investment in our digital business and improving operations. As a result, we have emerged as a leaner, stronger and more resilient business. “These are a solid set of preliminary results but there is still uncertainty ahead of us in the next 12 months, not only with the continuing impact of COVID, but also the challenges we face with the global supply chain and inflationary pressures. We have seen a minimum of a five-fold increase in container prices over the last 12 months and this will continue to impact us for at least a further six months until the issues being experienced in the whole supply chain return to more sensible levels.”

The Making Tax Digital initiative, which the Government states should be “making it easier for individuals and businesses to get their tax right and keep on top of their affairs,” has, to date, significantly increased costs and admin burdens for small firms, according to the latest major report from FSB. The business group sets out measures to reverse those trends and ensure MTD delivers on its potential to improve productivity and profitability among small firms. FSB’s new publication, A Duty to Reform: Making tax work for small businesses in a digital world, shows that small firms are each spending an average of £4,100 and 52 hours a year on tax compliance. For those that are participating in the Government’s MTD programme – designed to fully digitalise the tax reporting process – the average cost of compliance (£4,562) is considerably higher than for those yet to migrate (£2,960). Those in scope of MTD must purchase compatible software, subscriptions for which have significantly added to compliance costs. There are concerns that these costs will grow further as the initiative is extended to cover more taxes. Seven in ten (70%) small businesses have made the MTD switch. Among them, a similar proportion (71%) say that the move has resulted in increased costs and time lost to learning new processes. Collectively, the small business community is losing £25 billion a year to tax compliance – a figure which does not reflect the 300 million working hours spent on preparing and filing records. The report also finds that the requirement to register for VAT once a firm has £85,000 of turnover serves as a barrier to growth for one in four (24%) firms, equivalent to 1.4 million businesses across the UK. Elsewhere, the study flags a lack of awareness among small firms of the tax incentives they’re entitled to – fewer than one in 20 (4%) see the Government’s new Super Deduction for plant & machinery investment as a top incentive to invest and expand. When asked to identify desired tax reliefs that would assist growth, more than a third (34%) cite “a reduction in National Insurance Contributions.” Recommendations published as part of A Duty to Reform include:

• Ensuring the Government takes a stand where MTD is concerned to prevent unfair profit-seeking behaviour among software providers, with the Competition and Markets Authority intervening if necessary.

• Installing an MTD feature which nudges businesses towards relevant tax reliefs and investment incentives.

• Increasing the VAT turnover registration threshold, which has not moved in-line with inflation, to encourage those bunching beneath the £85,000 turnover point to expand whilst adopting the Office for Tax Simplification’s proposals for a smoothing mechanism.

• Reforming the Super Deduction, with consideration given to scaling back the cost of the break – making room for incentives that would benefit a greater number of smaller firms – and changing qualifying criteria to make the break applicable to intangible assets such as software and intellectual property.

• Increasing the Employment Allowance from £4,000 to £5,000 to help firms recruit, retain and retrain more staff as furlough ends and operating costs rise.

FSB National Chairman, Mike Cherry, said: “Small businesses are fully behind the Government’s vision for a high skill, high productivity, low tax economy. With costs soaring, and the Budget approaching, it’s now time to see the policies that will get us there. “Reducing the huge amount of time and money lost to tax bureaucracy would free up billions for investment, upskilling and digitalisation. We’ve always said that – rolled-out in the right way – MTD could mean productivity gains over the long-term. “However, for many of those who’ve already taken the plunge, the programme has so far yielded higher costs and greater complexity. “The Government has rightly pushed back the start date for income tax to be a part of the scheme. It should now use that time to engage with the small business community regarding impacts to date and chart a course forward to ensure the programme is delivering as expected. “As things stand, more than a million firms say they’ve stopped growing their turnover because of the VAT threshold. If we want the economy firing on all cylinders again, reform of this levy – seen as the most burdensome of all by firms – is a must. We must stop the £85,000 turnover threshold serving as a ceiling to the growth we desperately need. “Raising the Employment Allowance to cover £5,000 of an employer’s National Insurance bill would go a long way to helping small firms steel themselves for an uncertain and unpredictable winter.”