The Big Conversation: Helping Britain Recover - South West event

  Added:  09/10/2020

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On 2nd October, we brought our virtual series to the South West, bringing together voices from the region’s business community to discuss the challenges and opportunities they face as they deal with the impact of coronavirus.

The panel:

  • Deborah Fraser, Regional Director South West, CBI
  • Aaron Pascoe, Director of Penventon Hotel
  • Theo Backhouse, Founder of Backhouse Housing
  • Paul Gordon, Managing Director SME & Mid Corporates, Lloyds Bank

Hosted by broadcast journalist Declan Curry

Key insights:

  1. Current business situation

    Both geographically and economically, the South West is diverse. Dominant sectors include everything from the aerospace, defence and energy industries through to financial services, and of course the tourism and hospitality trade for which the region is famous. The dominance of tourism means that the region has been hit particularly hard by the coronavirus pandemic and South West businesses have made more use of the various government lending schemes than most other UK areas.

    According to the CBI, there are disparate levels of productivity across the region and businesses are experiencing a mixed picture when it comes to opportunities for growth. Some firms have flourished during the last six months – but others, unfortunately, have not. The challenge is to come together as a united region to collaborate for a recovery that can benefit everyone.

    This was reflected in the first live poll of the event.

    Poll 1: What would help business recovery most in the South West?

    Creation of regional growth funds29%*
    Grants to retain existing/ take on new employees23%*
    A stronger network among the local business community15%*
    Tax breaks 14%*
    Improved digital connectivity11%*
    More local (i.e. devolved) decision making by public bodies9%*

    *note these numbers are rounded

    CBI members mirror the poll sentiments

    "Regional growth funds provide opportunities to play to the area’s specific strengths and sector specialisms. With the right sort of collaboration, the South West has an opportunity to come out of this stronger and more united.” Deborah Fraser, Regional Director, CBI

  2. Rising to the coronavirus challenge

    Unsurprisingly, Penventon Hotel group were hit hard by lockdown. "It was quite a challenge, and quite scary." Finding themselves with no choice but to close, they decided to contribute to the national effort. Penventon Park was temporarily used as a care centre where Covid-19 patients could stay after leaving hospital and rooms at the Alverton in Truro were donated so NHS staff could stay close to the local hospital.

    Even now lockdown has eased somewhat, the demand is not back to the usual levels. “With so much uncertainty and things changing all the time, some weeks we see huge surges in short-notice bookings. That makes it hard to plan ahead.” The latest curfew restrictions on hospitality venues has also affected bookings. “The next few months are always quieter but will be even more difficult. It feels like we are entering the third phase.”

    Meanwhile, many businesses that were forced to adapt quickly reaped the rewards. The CBI noted one business that achieved its five-year digital strategy within six weeks during Covid – and sales reached their three-year target in a four-week window. By contrast, those who haven’t been in a position to be so flexible – or those in the cultural, hospitality and tourism sectors – have had “a torrid time.”

  3. Targeting growth opportunities

    For Backhouse Housing, it’s definitely the right time to be thinking about growth opportunities. Having spent three months or more in their homes, people’s priorities for their homes have changed – outdoor space is more important now than, say, living a commutable distance from the workplace. Combined with the suspension of stamp duty, this creates a fertile ground for design-led SME housebuilders like Backhouse Housing.

    Fear of local lockdowns and a need to keep cash within business has meant that Penventon have put some smaller improvement projects on hold until next spring. Instead, they’re focusing on honing their competitive advantage – the things they know they do well – to put them in the best position for the next tourism season, which will hopefully look a little more like normal.

    When it comes to overseas growth, the South West is rich in companies that have the potential to export but, for a number of reasons, currently don’t. While the prospect can be daunting, firms that export are typically more innovative and productive, with better management skills and more diverse operations so seeking out advice and support from organisations such as the Department for International Trade and local Chambers of Commerce, or consulting Lloyds Bank’s International Trade Portal, is a great first step for would-be exporters.

  4. Improving efficiency and productivity

    Adapting working practices was a common theme for the panel. Backhouse housing had a total shut down of construction sites between March and May – and site managers had to work hard to make sites safe for staff to return to, and be able to comply with social distancing. “For head office staff, they already had the infrastructure in place to make working from home easy. We’re a young business, so everyone has laptops and we’re cloud-based.” Theo Backhouse, Founder of Backhouse Housing

    Theo noted that working remotely without face-to-face interaction still takes some getting used to – especially for the new starters who have joined since the pandemic. To keep staff as connected as possible, communication and acknowledging that things are a little out of the ordinary is key.

    Digital connectivity is certainly linked to productivity and businesses would be wise to consider their set up and explore options for cloud-based working, if they don’t already. It’s also vital to look at what peers are doing and learn from their experiences. There are so many third-party apps and solutions out there and sites like Be the Business can provide valuable guidance on the basics.

    The other major roadblock for productivity in the South West is poor transport links and infrastructure. The panel agreed that, by speaking with a united voice, the demands of the region can be better heard as investment in this area would be of enormous benefit.

  5. Innovation and resilience

    There was a sense of optimism across the South West before Covid-19 and a growing desire for the region’s disparate parts to come together to become a domestic and even international leader in its specialisms. As well as being home to the largest aerospace sector in the UK, the region also has a significant Silicon Valley cluster and expertise in climate science. By collaborating in priority sectors, a unique brand for the South West could emerge.

    This entrepreneurialism and innovation are on display right across the region. In the second of our live polls at the event, almost a third of attendees reported their business is more innovative than six months ago – and similar numbers said they were more resilient.

    Poll 2: Which of the following would you say is most relevant of your business?

    We’re more innovative than we were six months ago29%
    We’re more resilient than we were six months ago27%
    Our workforce is more productive than six months ago16%
    We have more positive cash flow than six months ago10%
    None of the above18%

    “I’m never surprised by the amount of entrepreneurialism in the UK.” Paul Gordon, Managing Director SME & Mid Corporates, Lloyds Bank

    Whatever the last few months have looked like for businesses, the key to future success is understanding how their customers’ behaviour changes and reshaping operations accordingly to adapt.

Attendee questions:

  • What are your normal time planning horizons when you are looking at projects?

    Aaron: “We work to multiple schedules depending on the project. Smaller plans will be around the 12-18 month mark, but bigger projects would have a 2-3 year timeline.”

  • What are the main objectives for a sustainable recovery? What’s the point?

    Deborah: “Many companies will have reduced their carbon footprint during lockdown so, as we start to think about recovery, it’s worth considering how those reductions can be maintained. For many this might be achieved by a hybrid model of home working and face-to-face. Alternatively, companies can look at reducing energy consumption – and therefore costs – through a mix of renewable and low-carbon tech.”

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

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