A Budget built on loss leaders or a leadership that might have lost its way? Was it more ‘Middle Lidl’ than Middle England?
James Pinchbeck, partner at Streets Chartered Accountants, comments on the Spring Budget.
The headline grabbing announcement from the Chancellor Jeremy Hunt’s Spring Budget, and perhaps his last before an election, was the 2% cut in rate of National Insurance (NI). This second cut follows a similar cut given in last year’s Autumn Statement and comes with an election looming.
For some it might have felt like that ubiquitous loss leader that retailers prompt to get you to buy so as to take your mind off the fact that whilst making such a purchase, perhaps one you hadn’t intended to buy, you might buy something else at higher price and margin. In this case, the reduction in NI perhaps coupled with the freezing of alcohol duty, the fuel price cap and changes to child benefit are all sweeteners to give us a sense that things are getting better and we are better off than we might be really.
This aside there were a number of key announcements that will affect both businesses and individuals.
The freeze on alcohol duty no doubt will be welcome for both consumers and the licenced trade. Perhaps though more could have been done in light of the cost-of-living crisis and the impact it is having on our pubs, clubs and eateries.
Plans to scrap the furnished holiday lets regime perhaps comes with a double edged sword in that hopefully it can address the issue of access to affordable homes for those living in holiday destinations, but equally will it adversely affect the provision of holiday accommodation for holiday makers.
Turning to property, there was a reduction in the higher rate of property capital gains tax from 28% to 24% – a move aimed to stimulate the market for sales of properties caught by the higher tax rate. The Chancellor also announced the abolition of stamp duty relief for those buying more than one dwelling, a relief known as the Multiple Home Relief.
Many small businesses including the self employed will have welcomed the news that the VAT registration threshold will rise from £85,000 to £90,000 from the start of April.
For those businesses looking to invest in plant and machinery, whilst no date was given as to when it might come into effect, the Chancellor stated that plans were in place to draft new legislation so that leased assets could be included in Full Expensing for the purchase of plant and machinery.
Whilst this may not affect many reading this, Jeremy Hunt confirmed the non-domiciliary status will be abolished and it will be replaced by a ‘simpler and fairer’ system from April 2025. The current system means that those living in the UK with overseas links and financial interest only pay UK tax on money earned here, going forward they will be required to be taxed on worldwide income.
For those engaged in the creative industries sector, news of the £1bn additional tax relief must have been as good news as perhaps being nominated for a BAFTA. Not least that measures include a tax credit for UK independent films with budgets under £15m.
Also announced was a 40 per cent relief on gross business rates until 2034 for eligible film studios. The Chancellor also said the government will remove the 80 per cent cap for visual effects costs in the audio-visual expenditure credit.
When it comes to the public sector though it would seem the only real beneficiary was the NHS with a commitment to a public sector productivity plan. There were no real announcements around the much needed support for education, skills, emergency services, nor our local authorities, all facing the pressures of the cost of living crisis and often increasing demands.
Overall, was it a Budget to gain or even regain voter confidence, or did it fall short? Did it feel more like a government that is tired and lacking ideas and one that has perhaps lost its way?
Perhaps we will know more over the next few weeks and months on the run up to the 2024 election.
For the devil in the detail there is still time to book for Streets Chartered Accountants’ post Spring Budget webinar which takes place from 11am until 12noon on Thursday 07th March.
Register to join us live and/or to receive a post broadcast recording to watch on catch up. https://www.streetsweb.co.uk/about/events/spring-budget-2024/
Grants launched for North Northamptonshire businesses looking to reduce carbon emissions
North Northamptonshire Council have launched the latest round of a grant scheme to help local businesses to increase energy efficiency, move to a lower carbon economy and reduce greenhouse gas emissions.
Small or medium sized businesses can now apply for grants up to £5,000 towards 50% of project costs, with the remaining amount to be match funded by the business.
The funding can be used for:
- lighting and lighting controls
- heating and heating controls
- insulation
- energy efficient machinery and equipment (e.g. air compressors)
- solar panels
- heat pumps
- biomass boilers
- energy storage
- building energy management systems
Business development expert joins NLT board
Mel Archbould, owner and Managing Director of Cloud-busting, a business scale-up consultancy based in Chesterfield, has joined NLT Training Services’ Board of Directors.
Mel joins the five-strong board and will play an active role in advising on and shaping the training provider’s strategy for its future growth and charitable activities across the East Midlands and Humberside.
She brings more than 17 years’ experience as managing director of her family business, Palamatic, and now her own consultancy, Cloud-busting, to NLT which was established in 1968.
Mel Explained: “I have been on a journey myself and learned a great many lessons which are transferable to other organisations, including NLT. I am excited to now be part of NLT’s journey.
“There are a wealth of opportunities waiting for NLT to bring to so many adults in careers that require certification and validation of competence to carry out their role. I am looking forward to working with the board to help structure and focus on how that continues as NLT approaches its sixtieth year.”
Mel is no stranger to NLT having used the organisation as a mechanical engineering training provider at Palamatic. In addition to its range of industry-accredited Health and Safety courses, including CCNSG, CSCS and MPQC/SPA, most recently NLT has seen an increased demand for CMI-accredited leadership and management training, both nationally and in the local area. Welcoming Mel to the board, Sarah Temperton, Chief Executive of NLT Training Services said: “NLT has taken a significant and exciting change in direction in recent years. I am delighted that Mel has joined our Board of Directors. Her experience and profile reflect NLT’s future ambitions and focus for growth as well as helping us continue to meet our charitable objectives.”Construction company expands at Oberoi Business Hub
A Derby company, which specialises in refurbishing social housing properties across the East Midlands, has expanded into larger serviced offices at Oberoi Business Hub in Pride Park in line with its growing customer base.
Gratton Construction was launched in April 2022 by experienced surveying and construction professionals Jody Waldron and Kirsty Howard and relocated to Oberoi Business Hub last summer.
The company recently added another major refurbishment and on-going maintenance contract to its growing customer base of local authority and housing association clients across the Midlands which prompted a recruitment drive.
The larger offices at Oberoi Business Hub will house the current team of nine with capacity to accommodate even further growth.
Operations director Kirsty Howard explained: “Just six months after moving our operations to Oberoi Business Hub, we have secured several contracts including a two-year programme to handle kitchen and bathroom replacements and general building repairs for a major social housing provider in Derbyshire and Leicestershire.
“This has enabled us to re-structure the business into north and south divisions with site supervisors and coordinators in both and our first directly employed trades people.
“We were keen to stay at the Oberoi Business Hub which has been a factor in our business growth. As well as a prestigious business address and central location our team have benefited from high quality serviced office space, a great support team, plentiful parking and even electric vehicle chargers.
“Having experienced such rapid growth, the team at Oberoi Business Hub have gone out of their way to accommodate our urgent need for larger office space and we are grateful for their flexibility.
“As a young growing business, it is vital to have the right support services around us who are responsive to our needs.”
Oberoi Business Hub founder and managing director Kavita Oberoi OBE continued: “Our goal has always been to provide high quality yet affordable business premises with a prestigious address and a wide range of services that facilitate growth and job creation in the local area.”
Hub manager Jodie Brady concluded: “We recognise that flexible support can be the difference between growth or stagnation for our SME hub community and will find ways to accommodate our clients wherever we can to ease the challenges of their business journey from office space to call answering and other support services as required.”
Tree scheme helps dairy’s work to boost environment and biodiversity
One of Britain’s most famous dairies – Leicestershire-based Long Clawson Dairy, producers of world-renowned Stilton – is playing a leading role in helping to plant more trees in the county.
The farmer-owned co-operative has received 75 trees from Leicestershire County Council’s free trees scheme, which are being planted across six of the farms supplying the milk for the world-famous cheese.
Ruth Grice from Long Clawson Dairy said: “It’s a great feeling to work in partnership with Leicestershire County Council’s trees team to increase wildlife habitats in our supplier farms. In total, 22 of our 33 supplier farms are based in Leicestershire, covering over 3,300 hectares.
“It would be great to see even more new trees being planted across them during the 2024/25 planting season.”
Many of Long Clawson Dairy’s farms lost a significant number of trees in the 1970s due to Dutch elm disease, and are now suffering losses caused by ash dieback. Planting new trees on the farms to make up for the losses and to increase tree numbers is now a big priority for the dairy co-operative over the coming years.
In 2022, Long Clawson Dairy recorded just over 3,500 trees across its 33 supplier farms in Leicestershire and Nottinghamshire. They also measured nearly 300 miles of hedgerows – enough to stretch from Long Clawson to Glasgow.
Ruth Grice said: “Thanks to Leicestershire County Council’s free tree scheme, we know we will be adding 75 trees to this total in 2024. Some of our farms have been taking part in the free tree scheme for over 10 years – with many of the original trees now providing perches for birds to sing from, branches to nest within and berries to feed from.”
The trees have been provided as part of the council’s ongoing free tree scheme for farmers and rural landowners across the county. Larger landscape trees are provided for replacing trees lost to disease or to enhance tree cover across farms and the rural landscape. A mixture of native trees suitable for a range of site conditions are offered by application.
New senior appointment at housebuilder
Housebuilder William Davis Homes has appointed Michele Rose as its new Group Sales & Marketing Director, covering the East and West Midlands regions.
Michele joins Loughborough-based William Davis from Bloor Homes, where she was Regional Sales Director.
With more than 30 years’ experience in the housing industry, Michele brings a wealth of skills and knowledge to the role.
“William Davis has a strong reputation for quality and excellent customer service and I’m delighted to be leading the sales team here,” said Michele.
“In my previous roles I’ve grown three different sales regions and I’m looking forward to building on that success in both the East and West Midlands regions for William Davis.”
Michele said she was attracted to William Davis Homes by its emphasis on family values and commitment to employing its own workforce.
“It’s quite unusual for a housebuilder to directly employ its own workforce these days and that’s something to be highly valued – by employees and our customers. Our staff are completely invested in producing a high quality product.
“It’s amazing to think that many employees started at William Davis as apprentices and are still here around 30 years later.”
Purpose Media goes back to school as it lands website work for academy trusts
Derbyshire full-service marketing agency Purpose Media has made a major move into the education sector after winning contracts to create 30 new websites and give digital support to two leading Midlands academy trusts.
The South Normanton-based firm has been appointed by the Embark Federation and the LEAD Academy Trust, which run 44 primary and secondary schools between them across Derbyshire and Nottinghamshire.
The work will involve creating a new group website and 27 further school websites, as well as providing video and photographic content and ongoing support for LEAD, which is based in Nottingham and operates 26 academies – with one more set to join the group.
Purpose Media will also build a new group website for Derby-based Embark as well as supplying digital support for the 23 primary and secondary schools it operates across Derbyshire.
It will also build a new website for the William Rhodes Primary and Infant School in Chesterfield.
Purpose Media has built up an excellent reputation working with firms in a range of industries across the country and overseas and Tim Lenton, the firm’s digital implementation and strategy director, says the company is looking forward to using its expertise on behalf of schools close to home.
He said: “Schools have traditionally used their websites as one of a number of different methods to keep in touch with parents and other stakeholders and it’s fair to say they haven’t been used to what we’d consider to be their full advantage.
“Our strategy will be to put them at the heart of each school’s marketing and communications activity by ensuring they have quality photographic and video content, are kept up to date with the latest policy documents and contain everything visitors need to be able to understand each school’s identity and its core values.”
Matt Crawford, trust leader of the Embark Federation, said: “We are delighted to be working with Purpose Media on a new website for the trust and also William Rhodes school.
“We have been very impressed not just by the skill of their team but also by their effective communication at all stages of the project so far. We are really excited to see the end product and are hoping to continue to work with them in the future.”
Lucy Foster, head of marketing at LEAD Academy Trust, said: “We wanted to update our academy websites to improve the user experience and engagement for parents, prospective parents, prospective employees, students, governors and key stakeholders.
“Websites remain a key source of information but as well as functionality and compliance, they also need to reflect the personality of each academy while being recognised as part of the Trust.
“By working with Purpose Media, our academy websites will offer a more modern, engaging experience that can be measured and monitored to inform future improvements.”
Demolition team starts Leicester Market revamp
The first stage in the ambitious transformation of Leicester’s historic market will get under way this week.
National construction company Speller Metcalfe has been awarded the £8 million contract to lead the revamp of the market and has already begun preparing the site for demolition.
Heavy equipment will start arriving on site, with the demolition of the old market structure expected to take a little over a fortnight to complete.
Once the site has been cleared, the city council plans to create a market that’s fit for the 21st century but retains all the character of a traditional market place.
Among the improvements for the new-look market will be better lighting, smart new paving and a shuttered perimeter that will keep the site secure at night.
All the old wooden stalls – now in poor condition – will be removed, and 84 smart new stalls installed in their place, creating an attractive environment for the fruit and vegetable traders and other small businesses. The new stalls will be set out in an improved layout to create better pedestrian routes through the market.
The existing market roof will be removed and replaced with a smaller covered area, opening up views of the Grade II* listed Corn Exchange and creating space for new trading opportunities.
On one side of the Corn Exchange, attractive, flexible and lockable units – featuring green roofs and solar panels – will be installed in front of the indoor food hall to attract a new generation of traders and a wider range of quality goods.
On the opposite side, the space will be used for temporary specialist markets and special events, while an expanded café will be relocated to a site adjacent to Dolphin Square, where it will offer its customers more outdoor seating and a much more attractive view of the market area.
City Mayor Peter Soulsby said: “This investment in Leicester Market is long overdue, so I’m very pleased that our contractors are now on site.
“If Leicester Market is to be the beating heart of the city centre once again, we need to help it adapt to reflect the way that people shop today.
“By reconfiguring the space and upgrading the environment, we can create new opportunities for new businesses that will complement the existing offer and attract new activity, and new life, to the market area.”
Leicester Market will continue to trade from its temporary site on Green Dragon Square while work to create the new-look market is under way.
Mike Dalzell, the city council’s director for tourism, culture and inward investment, said: “A final timescale for the works will be drawn up once Speller Metcalfe have cleared the site and checked what’s under the ground, beneath the old market.
“Our aim, however, is to complete the revamp of Leicester Market as quickly as we can, with the main works expected to take around 10 months.”
Rob Lashford, regional director at Speller Metcalfe, said: “We’re proud to be working on this landmark project in Leicester.
“We have a history of delivering innovative and sustainable projects which contribute to local communities, and know that this scheme will continue this success.”
Breedon acquires US firm in £238m deal
Breedon Group, the construction materials group, has acquired BMC Enterprises Inc. for an enterprise value of US$300m (£238.1m).
BMC is a supplier of ready-mixed concrete, aggregates and building products headquartered in St Louis, Missouri.
In the twelve months ended 31 October 2023, BMC recorded unaudited revenue of US$178.9m and unaudited adjusted EBITDA of US$35.5m.
Rob Wood, Chief Executive Officer, said: “The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform in the USA. BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth.
“As a high-quality aggregates and concrete business that has grown at pace, organically and through acquisitions, with a strong management team and deep local knowledge, BMC’s culture and values are fully aligned with the Breedon business model.
“The acquisition is expected to be earnings enhancing for shareholders while allowing Breedon to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions across each of our platforms as opportunities arise.
“We are delighted to welcome our BMC colleagues to Breedon and look forward to working with them to build Breedon’s presence in the USA.”
The news comes as Leicestershire-based Breedon announced its audited annual results for the year ended 31 December 2023, in which it delivered record revenue of almost £1.49bn, while pre-tax profits slipped slightly, by 1%, to £134.4m.
Rob Wood said: “The record results we delivered in 2023 are a real accomplishment and something I am extremely proud of. The challenging trading conditions our team faced required agile and bold responses which they took with discipline and determination.
“As a result we kept our workforce safe and well, reinforced our market positions and were recognised by our clients for the quality of our products and services. For this I sincerely thank the whole team.”
Revenue and profits slip at Ibstock
Ibstock, the manufacturer of building products, has seen revenue and pre-tax profits slide in its results for the year ended 31 December 2023.
Revenue at the Leicestershire firm was down 21% to £406 million, in comparison to £513 million in 2022, as sales volumes “reduced in line with UK domestic brick deliveries.” Ibstock noted that “despite this challenging backdrop, selling prices remained stable through the year.”
Statutory profit before tax, meanwhile, dipped from £105 million in 2022 to £30 million. During the year a comprehensive operational review was undertaken to reduce fixed cost and align capacity to near term demand expectations. The resulting restructuring programme included a number of actions to temporarily reduce capacity across the business, as well as the permanent closure of two clay brick factories.Headcount reductions and fixed costs savings with an annualised value of £20 million are to be achieved, with around £5 million of this captured in 2023 and the full amount to be achieved in 2024.
Activity in the early weeks of 2024 has been in line with subdued levels seen in the latter part of the 2023 year for Ibstock, with the company noting: “While remaining cautious, we currently anticipate a degree of improvement as the year progresses.”Joe Hudson, Chief Executive Officer, said: “We have delivered a resilient performance for the year in what have been very difficult market conditions, and I am proud of the way that colleagues across the Group have responded in such challenging circumstances.
“Our results reflect both continued strong execution and the difficult but decisive actions taken to reduce headcount and realign capacity with near term market conditions.
“The organisational changes implemented during the second half of the 2023 year have created a leaner, more customer-focused business, which will deliver an enduring benefit for years to come.
“In doing so, we have also created a platform to accelerate innovation, with a particular focus on the sustainability of our products and processes. In combination with the strength of our brand and unrivalled product portfolio in the UK construction marketplace, we believe this will unlock significant value over the years ahead.
“As we focus on doing the right things to respond to market conditions in the near term, we are moving towards completion of the key investment projects that will underpin our growth as the market recovers.
“Our investment in new low cost, efficient and more sustainable brick capacity at our Atlas facility, and a significant capacity expansion in the fast-growing brick slips market, are on track and will support our medium-term growth objectives.
“Activity in the early weeks of 2024 has continued to reflect the more subdued demand environment experienced throughout the latter part of 2023. As we look further ahead, it is clear that market fundamentals remain supportive, with significant unmet demand for new build housing in the UK.
“The Group’s conviction in its medium-term prospects is underpinned by an expectation of a return to normalised conditions within its core markets combined with the incremental returns generated from our significant capital investment programme. Although the timing of this recovery is uncertain, Ibstock is well positioned to benefit and to deliver on our growth targets over the medium term.”
