Download The Impact of the Credit Crunch in Wiltshire

 The Impact
of the
Credit
Crunch in
Wiltshire
A Report to the
Wiltshire Assembly George Bright, March 2009
2 The Credit Crunch in Wiltshire
A Report to the Wiltshire Assembly
CONTENTS
Page
Introduction
3
EXECUTIVE SUMMARY
4
SECTION A – The Impact of the Credit Crunch
The Context: from Credit Crunch to Downturn to Recession
2 The Wiltshire Economy
3 The Impact on Wiltshire’s Businesses
4 The Impact on the Wiltshire’s Public Services
5 The Impact on the Voluntary Sector, Partnerships
and Community Areas
6 The Views of Wiltshire Residents
7 The Social Impacts
8 Development Investment in Wiltshire
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8
12
18
27
29
34
45
55
SECTION B – A Framework for Action
9 Issues in Decision Making
10 A Menu of Actions
11 Proposals for the Wiltshire Assembly
NEXT STEPS
57
61
71
80
APPENDICES:
Acknowledgements
83
Glossary
84
References
85
Project Brief
86
3 Introduction
The ‘credit crunch’ and the related economic downturn have had a major impact upon the world
and the UK as a whole and will continue to do so for years to come. The complexities and scale of
the resulting problems and the actions required to try and address them are considerable.
This report is presented to the second meeting of the Wiltshire Assembly as an aid to support its
discussions, reflections and decisions. The Assembly is to consider how, working together, its
members might take effective, local action to assist the people, businesses and communities of
Wiltshire and shape the future of Wiltshire in response to the ‘credit crunch’ and its effects. This is
in addition to actions members might take individually in the ‘normal course of business’.
At the first meeting of the Assembly in October 2008 the Leader of Wiltshire County Council,
Councillor Jane Scott, invited Assembly members to raise their concerns about the impact of the
credit crunch in Wiltshire. During that event Matthew Taylor, Chief Executive of the Royal Society
of Arts, challenged members to work more effectively together and proposed a framework for
action based upon ‘integration, insight and innovation’. This report and the process for creating it
build upon their contributions.
The intelligence gathering exercise to support this study has attempted to forge further
INTEGRATION by using Assembly members, their organisations and their networks to gain
information about the varied impacts of the ‘credit crunch’ on the people, businesses and
communities of Wiltshire.
It is hoped that the contributions and ideas in this report and the debate at the Assembly meeting
will increase INSIGHT through the examination of what is heard in ways that are considered,
rigorous and proportionate. In considering the information gathered I have been reminded that ‘the
plural of anecdote is not evidence’ and have sought to question assumptions and underpin
judgments with quantitative and qualitative evidence, where possible. I have been reminded also,
however, that ‘the plural of perceptions is reality’ for many people. The role of the national media
in creating perceptions and its impact upon the reality of the ‘credit crunch’ and economic downturn
has been a recurring theme.
Section A of this Report summarises the information gathered and the insights that have been
offered. Further detailed evidence is referred to and that will be available, along with this report, on
the Wiltshire Assembly webpage at www.wiltshire.gov.uk
Section B seeks to provide a framework for Matthew Taylor’s third element - the creation of
INNOVATION - when Assembly members think about how they, and others, can ‘do things
differently’ to combat the impacts of the ‘credit crunch’ upon the people, businesses and
communities of Wiltshire. Some members have already contributed innovative ideas that have
been incorporated in this report. Debate on those ideas and the generation of further innovation is
the purpose of the Assembly gathering.
I have been grateful for the opportunity to undertake this work and engage with so many different
facets of life in Wiltshire. In submitting this report I hope that it will contribute to decisions that
strengthen the ability of Wiltshire’s organisations to support its people, businesses and local
communities at a time of challenge and lead to new and innovative developments to support a
more sustainable future for Wiltshire.
George Bright
4 The Credit Crunch in Wiltshire
Executive Summary
Introduction
This report was commissioned to gather evidence about the impact of ‘the credit crunch’ in
Wiltshire, to gain insights from the people of Wiltshire into their experience and their ideas on
measures that might help and to propose actions for the Wiltshire Assembly to consider.
The Impacts
The Context
By the end of 2008 the UK economy was officially in recession. The major reduction in the
availability of credit – ‘the credit crunch’ – hit the commercial and residential property markets in
late 2007 and early 2008. Employment in the construction and financial services sectors fell.
Reductions in demand spread as consumer and business confidence fell rapidly, hitting the
manufacturing and retail sectors and other parts of the economy in the second half of 2008.
The Wiltshire Economy is showing resilience in the face of the UK recession.
At the start of the credit crunch, Wiltshire’s economy was strong, if showing some signs of
‘overheating’ – employers were finding it difficult to recruit appropriately qualified staff; there was a
lack of offices, industrial units and employment land for expansion and new investment.
Wiltshire has a lot of employment in small businesses and the public services which reduce its
vulnerability to major job losses but there has been a considerable increase in unemployment
nonetheless. In January 2009 the JSA claimant count was 5,250, having stood at 2,890 in June
2008. The January figure is 1.9% of the working population, compared with 2.5% across the South
West and 3.4% for the UK as a whole.
The main increases in unemployment have been in Trowbridge, Salisbury and Chippenham but
there have been high percentage increases in areas with significant out-commuting such as
Wootton Bassett, Tidworth, Tisbury, Mere and Pewsey.
Job vacancies unfilled at JobcentrePlus had fallen from 1,615 in January 2008 to 1,244 by January
2009.
The Business View
Business confidence has fallen with almost two-thirds expecting turnover and profits to be down in
2009, over half experiencing worsening cash flow and one-third expecting to have reduce their
staffing levels.
There have been job loss announcements by important businesses in Wiltshire but larger ones in
the surrounding counties, that impact also on Wiltshire residents.
Business voices were very concerned by the speed with which turnover and order books had been
hit by the downturn. There was strong condemnation of alarmist national media coverage of the
credit crunch and a belief that this had contributed to the speed and depth of the recession.
However, there are some important Wiltshire businesses that are strong and continuing to do well.
5 A fascinating insight was the belief that the ‘credit crunch’ was bound to happen. It was seen as a
much needed correction to economic growth based on unsustainable levels of borrowing and
consumption. Other features highlighted were:
•
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The lack of experience of recession in current managers
Greater creativity by businesses to avoid redundancies by other approaches to saving pay
costs, whilst retaining the skills needed
The difficulty experienced by smaller businesses in complying with the complexities of
employment law with adverse effects for their employees
A view that the banks had swung from providing credit too easily to now being very risk averse
with negative effects on even well run businesses with good track records
A view that Government initiatives to help business had not yet had any real impact and
criticism of the 2% VAT cut
Strong criticism of the planning process especially in West Wiltshire
Concern about the ‘street scene’ in market towns.
There were many sound suggestions for actions that might be taken to help and a positive sense in
some parts of the county that the local economy could turn around reasonably quickly
The Public Services
They are a source of strong employment with 27% of jobs in Wiltshire in this sector. However,
these services were being hit by a combination of reducing income, falling capital receipts,
increased costs and increased demand. With the exception of the Probation Services, employment
levels are reasonably stable at present. Resources are tight and these services need to plan for
reductions in public spending within the next two years.
The Voluntary Sector, Partnerships and Community Areas
There was little evidence of significant impacts at this stage, except on advice services, but
voluntary agencies did expect to see increased demands on their services coupled with reduced
income. The main issues that arose were:
• Concerns about the potential lack of employment opportunities for young people
• The need to develop and promote volunteering
• The need to focus more on the concept of sustainability in all aspect of policy
• As with the business sector a concern for the ‘street scene’ in town centres
• The need for a clear route to advice and help for those who need it.
The Views of Wiltshire Residents
A major survey of Wiltshire people provided some valuable insights into how they felt and were
dealing with the impact of the recession:
•
•
There was a high level of concern about the economic situation; pessimism about the ability of
Wiltshire to cope and worries for rural communities and the agriculture industry. Much of this
anxiety was at variance with the evidence of impacts so far.
There was strong support for action by Wiltshire Council and for most of the measures
suggested. 77% of respondents had reined in their spending in some way but around a quarter
indicated real concerns about debt, the potential loss of employment and other problems.
6 The Social Impacts
Compared with what is happening elsewhere in the UK, Wiltshire is showing resilience to the
potential social damage that can be caused by recession at this stage:
• All recorded crime was down in the last quarter of 2008, compared with the previous quarter to
September 2008 and the last quarter in 2007. Offences such as theft, criminal damage, house
burglary, domestic incidents and fraud all declined. The only increase was in shoplifting
offences, particularly in Chippenham and Trowbridge.
• There was no significant increase in housing problems overall, although Salisbury saw an
increase in mortgage repossession claims.
There is evidence of increased levels of problems and pressures, however. The four Wiltshire
Citizen’s Advice Bureaux have seen an increase of 11% in the social issues being raised with them
by clients. The major areas of difficulty are to do with debts and benefits. However, the largest
increase in problems is to do with the need for employment advice. Housing associations have
seen greater demands for debt advice. Council have had increased demands for Housing Benefit
Advice. There are reports of increased levels of relationship problems. However, Wiltshire is not
yet seeing major social problems as a result of the recession.
The Response
A Framework for Action
In considering how the people, businesses and communities of Wiltshire should respond, it is
important to recognise that there are no straightforward solutions. We do not have locally the
resources to solve all of the problems. However, there is much that can be done by more effective
working in a common cause to use scarce resources more productively. The focus should be on
assisting those who may be ‘casualties’ of the recession, whilst building for a future with
SUSTAINABILITY at its heart.
A Menu of Actions
Research, analysis of ‘good practice’ and the ideas and insights of those consulted suggest a 20
point plan of actions that should be considered for implementation and prioritisation. They are
summarised as:
1 Support the cash flow of smaller businesses and voluntary sector organisations
2 Provide emergency support for small and micro businesses
3 Work to reduce business’s costs
4 Help Wiltshire’s small businesses to gain new contracts
5 Help Wiltshire’s businesses to access national and regional support measures
6 Create a new source of finance for micro businesses and start-ups
7 Ensure easy access to information on available retail, office and industrial property
8 Support recovery by a rounded assistance package for new start-up businesses
9 Speed up the processing of business development planning applications
10 Promote potential economic growth sectors such as tourism and the food and drink industry
11 Fast-track new investment opportunities
12 Sustain the retail ‘street scene’ in Wiltshire’s market towns
13 Provide new opportunities for Wiltshire’s people to develop their skills
14 Strengthen emergency support for individuals and families
15 Help households to increase their income and manage their debts
16 Develop a strong, well supported Wiltshire Credit Union
17 Help households with fuel costs and energy conservation
18 Support voluntary services as personal and family problems increase
19 Review the impact of ‘One Council’ services on vulnerable households
20 Build confidence in Wiltshire, working with the local media
7 Proposals for the Wiltshire Assembly
Some of the actions in the menu above can be undertaken by particular organisations. However,
others require significant partnership working. The proposals for the Wiltshire Assembly attempt to:
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Build confidence - to reduce fear, worry and negativity and support a recovery process
Prevent unnecessary business failures amongst Wiltshire’s vital micro businesses by
investing in greater support for them
Help individuals and families by increasing their awareness of where to get help, their
access to it and the capacity of advice services to respond
Build for the future by:
developing stronger, local, community based sources of credit and investment
providing new opportunities to develop the potential of young people and use the
experience and skills of adults
maintaining and breathing new life into town centres.
A set of initiatives are proposed as the building blocks of the Wiltshire Assembly’s response to the
recession. The details are set out in the main report.
Wiltshire’s People, Businesses and Communities
The Building Confidence Programme
Wiltshire Business Support Service
•
Emergency Support Scheme
• Start Up Scheme
Wiltshire Citizens’ Advice Service
•
Citizens’ Support Fund
Wiltshire Community Finance Initiative
• Credit union
• Community Reinvestment Trust
Wiltshire ‘Potential’Programme
Wiltshire Street Scene Programme
8 SECTION A The Impact of the Credit Crunch
Chapter 1
The Context: from Credit Crunch to Downturn to
Recession
It is argued by some commentators that the current global financial problems are unprecedented in
their scale and complexity. To support effective communication it is important that there are some
shared understandings and that the issues are not lost in a welter of specialist language and
jargon. Below is offered a plain language guide to the ‘credit crunch’ as a starting point, although it
is still not simple! This is based on a number of sources but predominantly Professor M Parkinson
et al ‘The Credit Crunch and Regeneration: Its Impact and Implications’ An Independent Report to
the Department of Communities and Local Government (January 2009).
What is the ‘Credit Crunch’?
The term ‘credit crunch’ has rapidly become part of the language through its extensive use in the
media as shorthand for a range of global, national and local economic and related problems. In
broad terms it encompasses actions that over the past three years have seen:
•
a major cut in the availability of credit, which has reduced the ability of organisations and
individuals to borrow money
•
this has led to a reduction in economic activity as the supply of money to support
transactions has fallen – what is often described as ‘the economic downturn’
•
the economic downturn is now formally described as a ‘recession’ in the UK. This is
because there have been two successive quarters where the Gross Domestic Product
(GDP), the main measure of the economic output of the country, has fallen from its
previous level (-0.6% in the three months to September 2008 and -1.5% in the three
months to December 2008).
What caused the ‘Credit Crunch’?
Most analysis suggests that the ‘credit crunch’ has developed in a number of stages as a result of
two factors: inflated house prices and over-extended credit and borrowing levels in the financial
system.
Stage 1 – the Search for Greater Returns on Investment from 2001
In 2001 the major fall in the values of shares on global stock markets (the bursting of the ‘dot.com’
bubble) saw the United States (US) use extremely low interest rates as the main policy tool to
stave off economic recession. A loss of confidence in shares at the same time as returns on
government bonds were extremely low pushed a large flow of capital into “alternative” investments
– property assets, private equity, hedge funds and asset backed securities. The resulting rise in
value of these assets coupled with very low interest rates made it very attractive for investors to
pursue these assets, using large amounts of borrowing.
9 Stage 2 – the Explosion in Mortgage Backed Securities (MBS) from 2002-2006
Mortgage backed securities (MBS) were the link between rising property asset values, the search
for high returns on investment and financial engineering. MBS are a mechanism by which a bank
lender converts loans into bonds which are then sold to investors. The investors receive the
payments of interest and capital due from borrowers, and in the pure form of MBS, carry all the risk
of non-payment. The originating bank has then moved the loan off its balance sheet and is
therefore free to issue more loans. MBS, in principle, spread risk, which would otherwise be
concentrated in a small number of mortgage originators, across a large number of investors.
Large US markets in residential MBS have operated smoothly since the late 1970s and in
commercial MBS since the early 1990s. Conditions in the 2000s, however, were an MBS
hothouse, which led to a self-reinforcing spiral of rising values and increasing debt. The use of
commercial MBS quadrupled from 2002 to 2006 in both US and Europe. In residential lending, the
number of subprime mortgages trebled from 2001 to 2006, while the volume of sub-prime MBS
issued more than quadrupled. In 2006, around 20% of all new mortgages in the US were rated
sub-prime. Sub-prime is defined as borrowers whose financial position made it more likely that they
could default on their repayments; lenders compensate for the higher risk by charging higher
interest rates.
Stage 3 – Interest Rates Rises Undermine Inflated Property Values in 2006
The start of the credit crunch did occur in a number of steps but the impact started to be felt in the
US in 2006:
•
US interest rates rose in 17 successive 0.25% increases from 1% in mid-2003 to 5.25% by
mid-2006, prompted by signs of rising inflation and a desire of Central Banks around the
world to drive up long-term real interest rates from historic lows.
•
The rise in interest rates checked the growth in US house prices from an annual
rate of 20% in the second quarter of 2005 to -4.7% in the final quarter of 2006.
•
The combination of rising interest rates and falling house prices exposed the poor quality of
sub-prime lending, with a sharp increase in mortgage defaults, and early estimates that up
to perhaps $100 billion of total $605 billion subprime MBS could eventually be in default.
•
By the end of 2006, mortgage defaults led to a collapse in the value of sub-prime MBS – a
halving in value for the lowest quality bonds – which had been widely distributed through
the financial system.
Stage 4 – The Credit Crunch Hits the US in 2007 and the UK in 2008
Throughout the first half of 2007 the fall in mortgage market activity and in the prices of sub-prime
MBS was having a direct effect on those most directly involved in the market – bankruptcy among
several US mortgage lenders, with losses and retrenchments among financial institutions at the
forefront of dealing and investing in MBS such as HSBC, UBS and GMAC.
By the late summer of 2007, these problems were still labelled as the sub-prime residential crisis,
although the stresses were recognised as severe, with potentially serious knock-on effects on the
US economy and global financial system. A deepening and broadening into a wider market shock
was caused by:
10 • Plummeting US house prices, where the rate of decline accelerated from an annual rate of 3% in the second quarter of 2007 to -20% at the end of the year, and -25% in the first
quarter of 2008. These falls threatened increased defaults across higher grade US
mortgages as well as sub-prime categories.
• The failure of several hedge funds linked to the MBS market, and the first of a long string of
losses announced by banks – UBS, Paribas, and Goldman Sachs – who had invested
heavily in the sub-prime debt.
• A sudden drying up of the inter-bank lending market and a leap in inter-bank lending rates
due to a loss of confidence that bank losses from sub-prime MBS had been fully declared,
and fears that banks would also be affected by further rounds of write-downs on other
asset types, such as corporate bonds and commercial property.
• Write-downs in the values of their assets plus a jump in the costs of their financing via the
short-term money markets left banks in a liquidity crisis, which was filled only by Central
Banks all around the world extending lines of credit by several hundreds of millions dollars.
• The banking liquidity crisis has forced an ever-lengthening list of enfeebled banks and
mortgage lenders into protective mergers, nationalisation or bankruptcy – Countrywide,
Fanny Mae and Freddy Mac, Bear Stearns, Lehmans, Merrill Lynch, Northern Rock,
Alliance and Leicester, HBOS, Bradford and Bingley, RBS, HBOS – the latter with an
impact on a previously solid bank, LloydsTSB.
The credit crunch has therefore come about through two major problems:
1
The sub-prime crisis, which was a substantial revaluing downwards of US mortgage debt.
2
The much wider financial crisis triggered by the fall in the asset values of the banking
system. Fear that banks had insufficient capital to meet their obligations both increased
each bank’s desire to hold cash and decreased the willingness of all banks to lend to each
other. It also left some banks potentially vulnerable to disastrous runs of withdrawals by
depositors, or collapses in share prices, or both.
Governments and central banks around the world have attempted to redress the drying up of the
interbank lending market by providing cash to the market in exchange for less liquid securities –
their on-going lender of last resort role, but on a vastly extended scale. In general, the banks have
used the Government funding to shore up their balance sheets
From ‘Credit Crunch’ to ‘Economic Downturn’ in the UK
The rapid drying up of liquidity began to affect the commercial property market in the UK in late
2007 with banks, looking at what was happening in the US, becoming less willing to lend against
falling values for commercial property. Prices in the UK private residential property market peaked
in 2006 and start to reduce in 2007 as the very high prices for property and high interest rates were
making property unaffordable. The onset of the credit crunch accelerated the downswing in 2008
as mortgage lenders severely curtailed the funds available for borrowing.
Early 2008 saw jobs starting to be lost in the financial services sector as a direct result of the ‘credit
crunch’. The impact on the property markets then caused unemployment increases in the
construction sector when commercial development and new house building slowed abruptly. Mid 11 2008 also saw a massive rise in the price of oil which fed through quite quickly into increased fuel
and food costs.
These factors resulted in less demand for material for the construction industry and less spending
by consumers on ‘non-essential’ items, with consequent effects for businesses in the
manufacturing and retail sectors. As unemployment began to increase in these sectors and spread
to other parts of the economy so the economic downturn, that we are in currently, took hold.
From Economic Downturn to Recession
As described earlier, the economic downturn is now formally described as a ‘recession’ in the UK.
This is because there have been two successive quarters where the Gross Domestic Product
(GDP), the main measure of the economic output of the country, has fallen from its previous level
(-0.6% in the three months to September 2008 and -1.5% in the three months to December 2008).
How bad is this recession?
The current downturn and recession is difficult and the national outlook and mood is gloomy. But
many argue that economic conditions – so far at least – are not yet as difficult as those in earlier
recessions in the 1970s or 1990s. For example, in the 1990s:
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Official interest rates were near 14%, sustained by membership of the European Exchange
Rate Mechanism (ERM), in contrast to current Bank of England rates of under 1%.
Inflation was over 7% as opposed to current levels of under 1%.
Government policy cut public spending as opposed to the current policy of substantial
increases in government borrowing to support spending.
The money supply was tightly controlled – a contrast to the latest measures to expand the
money supply by ‘quantitative easing’.
The main investors were domestic whereas now there is much more international
investment in the UK economy.
It is important, however, not to underestimate the economic difference between this period and
previous ones. It is clear the financial position has become increasingly serious since the original
crisis in 2007. The series of bank failures, mergers and bailouts across the globe, which continue
to this day, have meant that governments across the world, individually and collectively, have had
to battle to attempt to restore confidence in their national and global banking systems. International
stock markets have also fallen in value substantially. Also, despite structural differences with
earlier periods, the national economy is slowing down and concerns about the impact of the credit
crunch have filtered into wider concerns about the performance of the economy. National
economic indicators have fallen quite sharply with reductions in GDP and manufacturing
production being particularly prominent. The measures taken by the UK government have had little
perceptible effect – yet. It is not known whether the different measures being applied to the
economy will work to shorten the period of recession or reduce its severity.
Within a national picture, however, different parts of the country are affected variably, depending
upon their economic structure and performance. The next chapter considers the picture in
Wiltshire...................
12 Chapter 2
The Wiltshire Economy
Introduction – Wiltshire before the Credit Crunch
The picture of the Wiltshire economy over the past few years has been one of an ‘established,
steady and successful’ area with many key economic indicators performing better than the regional
and national averages (for the detail please refer to the ‘Wiltshire Economic Assessment 2006-07’,
published March 2008).
Wiltshire has had high economic activity and employment rates. A high proportion of its working
age residents have degree qualifications. Although there are areas of deprivation, Wiltshire has
enjoyed the highest level of Gross Disposable Income in the South West.
Wiltshire has a fairly diverse economic base with a comparatively larger share of total workforce
employment in sectors such as manufacturing, hotels & restaurants and public administration and
defence. It has a smaller share of employment in sectors such as construction, transport and
financial services. It benefits from a research and development centre just outside Salisbury with
world class R&D facilities at DSTL, QinetiQ and the Health Protection Agency.
Wiltshire’s business structure was described as healthy. The growth of VAT registered businesses
was high. Business survival rates were very good. Wiltshire had a higher than average proportion
of older established businesses. A notable feature of the Wiltshire economy was that it had more
small businesses in terms of their share of both employment and turnover than the South West
region and Britain as a whole. This dampened its ability to benefit from the strengths of larger
businesses in good economic times – greater investment and training, innovation and R&D, higher
productivity rates and greater levels of income earned outside the county.
By late 2007, however, Wiltshire’s economy was demonstrating some signs of ‘overheating’:
•
•
The labour market was very tight. Many well qualified residents had higher paid work in
surrounding areas and London, resulting in significant out-commuting. Average house
prices were 8.3 times the average annual wage of Wiltshire residents, and significantly
higher than that in Kennet and Salisbury, which meant that housing was difficult for the
young and the less well paid to obtain. A significant influx of migrant workers in the period
2006 to early 2008 was critical to enable some companies to continue their operations.
These workers were also highly valued by many employers for their reliability and work
ethic.
The availability of office and industrial units and employment land fell to very low levels.
There was a concern in early 2008 that the economy was not attracting sufficient new numbers of
high value-added businesses, compared with neighbouring areas – Bristol/Bath,
Hampshire/Southampton and Swindon. Wiltshire was not generating as a high a level of
productivity and wealth creation as other areas around us.
In retrospect, it may be felt that the Wiltshire economy had and retains some features that increase
its resilience in an economic downturn.
13 The Vulnerability Index
This sense of resilience is confirmed by research commissioned by the Local Government
Association and published in November 2008. In a report called ‘From Recession to Recovery: The
Local Dimension’ the consultants PACEC (Public & Corporate Economic Consultants) presented
an analysis of the potential differential geographical impact of the current economic slowdown on
towns, cities, regions and sub-regions in England. Their work suggests that Wiltshire is a medium
risk area only in terms of the impact upon it of a recession.
What does the Wiltshire economy look like now?
The honest answer is that it is too early to say with confidence. There are significant time lags in
the production of statistical evidence that can enable a full judgement to be made. However, it is
possible to identify some key aspects of Wiltshire’s position in the face of the credit crunch and the
economic downturn.
The detailed evidence to support this summary is contained in a number of substantial documents
available at www.wiltshire.gov.uk :
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The ‘Quarterly Economic Reviews’ produced by the Economic Intelligence Unit of Wiltshire
County Council. These update the ‘Economic Assessment’ referred to above using latest
data from the Office of National Statistics and other sources. The latest was produced in
January 2009.
A report called ‘The Economic Impact of the 2008 Slowdown in Wiltshire: Phase 1 A
Wiltshire Economic Model’ produced by Jim Plunkett-Cole of GWE Business West
Research and published December 2008. This shows the likely impact of increased levels
of unemployment on the key economic indicators of output and earnings, analysed by
industries, occupations and place (down to Wiltshire community area level).
A second report by Jim Plunkett-Cole ‘The Economic Impact of the Slowdown in Wiltshire:
Phase 2’ , published February 2009, which looks at the actual impact as it has occurred in
Wiltshire and the surrounding areas that impact upon Wiltshire residents, so far.
These reports contain an immense amount of interesting detail and describe the job losses that
have occurred and announcements that have been made. The main points to be made here from
those studies are as follows:
Employment/Unemployment
•
Claimant unemployment should not reach the levels of the last recession
In March 1993 the JSA (Job Seeker’s Allowance) claimant count reached almost 15,000 in
Wiltshire. At the end of January 2009 it stands at 5,250, having climbed quite rapidly from a
low base of 2,890 in June 2008. The January figure is a rate of 1.9% of the resident
working age population, compared with rates of 2.5% for the South West and 3.4% for
Great Britain. The GWE ‘baseline’ projection was for this measure of unemployment to
increase to 6,286 by June 2009, with a worst case scenario of 9,702. Whilst job loss rates
have increased in January, it is expected that the June figure will be around 7,000-7,500.
It is highly likely that job losses will continue throughout the year, however, the following
factors are important:
14 o
o
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Business comment suggests that many employers have reacted quickly to the
downturn and have taken action to reduce their staffing levels.
The County has 31% of its working population employed in the public sector, which
includes not just local authorities but also the Army, Royal Air Force, health service,
education and similar services. This is a reasonably resilient employment sector at
present, although it can expect to come under pressure at a later stage in the
economic cycle.
Wiltshire’s smaller dependence on large employers provides less vulnerability to
major shutdown decisions with substantial loss of jobs. Many of the larger
employers are amongst those who have acted quickly and hopefully have managed
the impact on their business already.
The caveat must be that the length and depth of the recession is uncertain. A prolonged
downturn will have a greater effect than that envisaged at present. There is a strong belief
that we will need to see the signs of a potential upturn at least before the end of this year,
or else a further significant round of business failures and lost jobs will occur.
•
The major impact so far has been on residents in Trowbridge, Salisbury and
Chippenham
The main towns in Wiltshire have seen the greatest increase in the number of JSA
claimants in 2008 – Trowbridge 365, Salisbury 261, and Chippenham 259. However, it is
noteworthy that greater percentage increases of claimants have been experienced in towns
and community areas (CAs) where there is significant out-commuting although the actual
numbers involved are smaller than the towns e.g. Wootton Bassett 156%/81 claimants,
Tidworth CA 210%/84, Tisbury CA180%/27, Mere CA 171%/36, Pewsey 157%/47.
•
Males have been more adversely affected than females; the middle-aged have been
more affected than the young and older age groups
By December 2008 males accounted for 73% of all claimant unemployed, as compared
with 69% in December 2007. The middle-aged (25-49 year olds) accounted for 53% of all
claimants, up from 51% the previous year.
•
The volume and proportion of longer term unemployed has reduced
An interesting and positive feature is that claimants of more than 6 months have reduced
substantially over the past year whilst unemployment itself has more than doubled. The
total has gone from 810 December 2007 to 515 in December 2008; a reduction of 36%,
compared with reductions of 21% in the South West and 8% in Britain as a whole. This
may, in part, be attributed to measures undertaken by JobcentrePlus to encourage longer
term claimants to find work. However, it will need to be monitored as the recession
continues because of the significant economic and social impacts of long term
unemployment.
•
Construction, transport and management jobs have been worst hit
The analysis of occupational areas most affected shows that skilled jobs in the above
sectors have been the worst affected. Unemployed construction and building trades
workers have risen from 65 to 265 during 2008, a rise of 308% - significantly higher in
Wiltshire compared with the South West 193% and Britain 117%. Transport and mobile
15 machine drivers have increased by 169% (130 to 350 people), whilst corporate managers
claiming benefit have risen from 135 to 320 or 137%.
The greatest volume increase is in relatively unskilled trades with 415 jobs lost. Overall
about two-thirds of claimant unemployed would be described as having had unskilled
occupations, whilst one-third had skilled jobs.
•
Migrant workers
It is believed that the influx of migrant workers in 2007-2008 is now reversing. The fall in the
value of the Pound against the Euro has reduced the relative benefit of work in the UK by
approximately 30%. Together with the reduction in readily available jobs, this has led to
many seeking to return home. There is some statistical evidence, through the Workers
Registration Scheme, that the inflows of East European workers have reduced but this is
only a partial picture.
A8 East European Migration,
Worker Registration Scheme,
Wiltshire,
Quarter 2, 2004 to Quarter 3, 2008
700
600
500
400
300
200
100
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008
Source: Local Government Association Produced by J Guinness, WCC
Banks and others suggest a lessening in business with migrant workers. Whilst such a
trend will ease unemployment here, it may represent some weakening in the skills available
to Wiltshire businesses.
Job Vacancies
An indicator of the health of the local economy is the extent to which it is generating vacancies.
Analysis of Job Vacancy Statistics can also yield considerable evidence, albeit somewhat less
clear-cut evidence, of the impact of the downturn on local employers. It is estimated that only
around one third of vacancies are actually registered with JobcentrePlus, and that a higher
proportion of more unskilled positions are registered but ‘Notified Vacancies’ are a reasonable
16 proxy for employer recruitment overall. In turn, employer recruitment trends are a useful (though
not concrete) indicator of employer growth.
In December 2007 a total of 2,400 vacancies were notified to JobcentrePlus whilst in December
2008 this had fallen to 1,300, a volume decrease of 1,100 and a percentage change of 45%.
Wiltshire’s decline over these two dates was slightly higher than nationally (40% and regionally
38%).
Reduction in Vacancies by Place
Amongst Wiltshire’s Community Areas, and in terms of the volume change over the two periods,
the areas which have experienced the most adverse effects of the Downturn since December 2007
are Salisbury, Chippenham, Warminster and Devizes. Salisbury in particular, has seen a significant
volume change, from 516 Notified Vacancies in December 2007 to 237 at the same time in 2008, a
decline of 279 vacancies.
Amongst Wiltshire’s Community Areas, the largest volume percentage reductions in vacancies
December 2007 are Pewsey, Bradford-On-Avon, Tidworth, Tisbury and Westbury. Interestingly,
these are also some of the areas ranked highest in terms of their respective rises in the percentage
of skilled JSA claimants. They seem to represent a mixture of Community Areas displaying
different economic characteristics as opposed to any single type of economy. For example,
Pewsey, Tidworth and Tisbury have relatively low levels of indigenous workplace employment
activity and a location of the periphery of Wiltshire whilst Bradford-on-Avon and Westbury are more
central market towns (though both are very different in their business/industrial profiles).
In summary, the percentage change analysis of Notified Vacancies between December 2007 and
December 2008 show that Wiltshire’s employers saw a significant downturn in recruitment activity
(approaching a 50% decline). Within Wiltshire, there is no evident discernable pattern to these
patterns of recruitment change. Suffice to say that most parts of Wiltshire have seen a significant
downturn in employer recruitment.
Reduction in Vacancies by Occupation
The biggest volume reductions in vacancies when comparing December 2007 with December
2008 have been in Elementary Trades, Plant and Storage Related Occupations, Transport and
Mobile Machine Drivers and Operatives, Administrative Occupations and Caring Personal Service
Occupations.
The largest percentage falls in vacancies have been for Transport and Mobile Machine Drivers and
Operatives, Skilled Construction and Building Trades, Secretarial and Related Occupations,
Elementary Trades, Plant and Storage Related Occupations, Administrative Occupations, Caring
Personal Service Occupations and Customer Service Occupations. With the important exception of
those in the Skilled Construction and Building Trades, it should be highlighted that all of the highest
volume and percentage change declines across Wiltshire have been for relatively unskilled
positions.
Commercial Property
The pressures on the availability of office and industrial property have eased somewhat over the
past year but the position is variable across the county.
17 Office availability is as follows:
Wiltshire
Kennet
Salisbury
North Wiltshire
West Wiltshire
Nov. 2007
Sq.Ft. /Units
535,196/ 89
Nov. 2008
Sq.Ft./Units
727,562/ 105
16,890/12
223,101/20
137,197/28
158,008/29
16,197/11
176,096/30
132,923/30
402,245/34
The overall picture for office space is of an increase of 36% of space and 16 more units. However,
that masks decreases in available space in all areas other than West Wiltshire. In large part this
data is explained by the take up of 67,200 sq.ft. at Station Works, Tisbury, the Chorum site in
Chippenham (35,000 sq.ft.) and the Old Saw Mill in Savernake (4,750 sq.ft.) with only relatively
small units coming onto the market in those areas. The major increases in West Wiltshire are
accounted for largely by Unit 5a, Kennet Way, Trowbridge (125,659 sq.ft.) and the Ashville Centre,
Hampton Park West, Melksham (80,000 sq.ft.).
Industrial property availability is as follows
Wiltshire
Kennet
Salisbury
North Wiltshire
West Wiltshire
Nov. 2007
Sq.Ft. /Units
530,144/116
Nov. 2008
Sq.Ft./Units
881,636/ 128
45,043/15
207,925/30
124,716/40
152,460/31
98,079/17
151,514/34
113,216/31
518,827/46
Again, the overall picture shows an increase of 66% in available space and 12 more units across
the county. However, Salisbury and North Wiltshire have seen declines in availability as against
substantial increases in Kennet and especially, West Wiltshire.
Take up at Lower Street, Harnham and Glenmore Business Park, Chippenham explain much of the
reductions in the North and South. West Wiltshire’s increase is due to units at Woodcock Industrial
Estate, Warminster (39,385 sq.ft.), West Wilts Trading Estate (75,387 sq.ft.) and again Unit 5a,
Kennet Way & the Ashville Centre, Melksham (the latter two either office or industrial use
permissions). In Kennet, the major increase is the former Hygrade premises in Devizes (61,804
sq.ft.)
Employment land availability remains pretty static with 13 sites offering 137.5 acres. A concern is
that there is no single large site available to support any major inward investment proposition.
Conclusion
The Wiltshire economy has lost the signs of ‘overheating’ that existed in 2007. The downturn has
now created spare capacity in the human and physical capital of the county. There are some
reasons for optimism in the ability of the county to dampen the worst effects of the recession but
action is needed to support the economy in the event of a long downturn. The fall in job vacancies
is of concern and indicates the extent to which employers are being very careful re staffing levels.
The views of Wiltshire’s business leaders are the next area of interest ....................
18 Chapter 3
The Impact on Wiltshire’s Businesses
Introduction
The effects of the credit crunch and the economic downturn on Wiltshire’s businesses were
assessed through a range of activities. A survey of its members was commissioned from the
Wessex Association of Chambers of Commerce (WACC). Three focus group sessions were held
with business professionals in Chippenham, Salisbury and Bradford on Avon. Intelligence was
gained from various credit crunch seminars for business held in January/February, together with
analysis of media coverage. Communication has taken place with a number of Wiltshire’s large
employers.
What is presented here is a picture of business performance and sentiment, together with some of
the main issues raised by the business community on the impacts they are experiencing and
suggestions for measures to be considered.
The Business Survey
The survey run by WACC is a standard one run every 6 months. It provides, therefore, a clear set
of trends in key factors of business performance and business confidence. The full survey is given
below but the main insights that emerge from it are:
•
There is a sharp downturn in business confidence. It was still positive but started to weaken
in the second half of 2007, was balanced in July 2008 but has now weakened substantially.
63% of responders expect their turnover and profits to be down in 2009.
•
In terms of business activity, over 50% state that deliveries and orders were down in the
second half of 2008 and that they had experienced a worsening cash flow. 31% had
reduced capital investment. 76% claimed they had spare production capacity.
•
33% claimed that their workforce had reduced in the past 6 months, with 35% suggesting
further reductions in the next 6 months.
•
One encouraging point was the question asked specifically for the first time about their
banks. No business reported reductions in the overdraft or loan facility – that is a marked
change from the last recession. However, 21% reported increased costs associated with
their bank lending. There are some larger companies that have reported issues with their
banks outside of the survey, however.
•
There are shifts of opinion about what would assist their businesses now. Interest rates and
inflation have fallen dramatically, so attention has moved to their tax burden and business
rates, along with the availability of credit and the cost of materials.
19 Wessex Association of Chambers of Commerce Business Confidence Survey
Jan-09
Jul-08
Jan-08
Jun-07
Your Home Market :
Excluding Seasonal variations, domestic deliveries over the last 6 months are:
Up
19%
29%
43%
70%
Same
23%
40%
48%
20%
Down
57%
31%
10%
10%
Excluding Seasonal variations, domestic orders over the past 6 months are:
Up
22%
31%
43%
72%
Same
22%
40%
43%
22%
Down
55%
29%
14%
6%
Your Export Market
Do you export Goods?
Export Yes :
Export No :
14%
86%
15%
85%
14%
86%
31%
69%
Excluding seasonal variations, export deliveries over the past 6 months are:
33%
80%
67%
60%
Up
Same
33%
20%
0%
20%
Down
33%
0%
33%
20%
Excluding seasonal variations, export orders over the past 6 months are:
Up
33%
80%
67%
40%
Same
33%
20%
0%
40%
Down
33%
0%
33%
20%
Europe
For your company, is the exchange rate
Major Problem
Minor Problem
No problem at all
An Advantage
of the pound against the Euro a:
17%
7%
17%
0%
36%
43%
17%
6%
43%
50%
67%
94%
5%
0%
0%
0%
Your Workforce
Over the last 6 months is your workforce :
23%
Up
Same
44%
Down
33%
33%
48%
20%
In the next 6 months, do you expect your workforce to go:
Up
8%
38%
Same
58%
46%
Down
35%
15%
36%
50%
14%
38%
58%
4%
32%
55%
14%
30%
65%
4%
59%
46%
Cash Flow
Compared with 6 months ago, is your cash flow:
8%
Up
32%
20 Same
Down
In the past 6 Months, has your bank :
Reduced your loan Overdraft Facility
Yes
No
Increased Fees or Charges
Yes
No
0%
100%
21%
79%
39%
53%
42%
26%
36%
5%
42%
13%
Production
Are you currently working at full capacity?
24%
Yes
No
76%
39%
61%
32%
68%
38%
63%
Investment Plans
Over the past 6 months, are your investment plans for:
Plant and
equipment:
Up
8%
29%
Same
60%
51%
Down
31%
20%
19%
76%
5%
36%
64%
0%
Buildings:
Up
Same
Down
10%
90%
0%
30%
70%
0%
7%
62%
31%
20%
63%
17%
Business Confidence
Do you believe that over the next 12 months:
Turnover will be:
Up
Same
Down
21%
15%
63%
37%
26%
37%
48%
33%
19%
83%
17%
0%
Profitability will be:
Up
Same
Down
18%
20%
63%
32%
19%
49%
45%
30%
25%
58%
25%
17%
Business Factors
Which are the factors most likely to improve your company's business prospects:
Lower interest rates
Lower exchange rate
Reduction in UBR rate
Fall in the tax burden
Lower rate of inflation
Reduction in import competition
Availability of credit or finance
12%
3%
12%
20%
7%
4%
17%
21%
6%
6%
13%
20%
1%
13%
22%
3%
4%
21%
22%
1%
5%
17%
6%
6%
14%
17%
3%
5%
21 Better industrial relations climate
Lower level of pay settlements
Reduction in prices of materials
3%
10%
14%
1%
10%
11%
1%
12%
10%
6%
12%
14%
When asked what local authorities could do to assist businesses over the next 12 months, the main
measures suggested were – reduce rates and charges, pay bills promptly and reduce car parking fees.
However, in the next section on the public sector we will see that the scope to implement some of those
measures has also been limited by the credit crunch. Whatever action is taken will require careful
prioritisation regarding the use of scarce resources to support businesses.
Job Loss Announcements
Alongside the downturn in business confidence has been a steady increase in the number of job
loss announcements as businesses have taken action to try and adjust their costs in line with their
reductions in income and to try and reduce their exposure to debt.
It is not possible to register all of the announcements that have been made. Whilst some of the
announcements made have been enacted, that is not the case for all. Not all job losses result in
increased claimant unemployment because employees are redeployed, find other work, move into
self employment or do not register for the JSA benefit. There are also many job losses in small
businesses that do not have to be reported to JobcentrePlus because they affect under 20 staff
and they are not usually reported in the media.
However, the announcements do give a flavour of the sectors and the places that are being most
dramatically affected by the downturn. It is recognised that many Wiltshire residents commute of
the county to work, so major announcements within commutable distance can have an effect.
Examples of these announcements are:
•
Car Industry – Honda, Swindon: 4 month shutdown and 1,000 voluntary resignations; Ford,
Southampton 500 jobs; BMW Cowley, Oxford 850.
•
Retail sector – Woolworths (Devizes, Marlborough, Salisbury, Chippenham, Melksham,
Trowbridge, Warminster) 230, Adams, M&S Simply Food (Marlborough, Trowbridge) 58
•
Furniture Manufacture – Smallbones, Devizes 50; Mark Wilkinson, Bromham 10; Airsprung,
Trowbridge 95; Hermann Miller, Chippenham 24
•
Manufacturing – Lafarge, Westbury 130; Celcon, Westbury 40
•
Financial services – major announcements have been made in the banking sector
nationally but it is impossible to isolate their direct impact on Wiltshire residents and
commuters; Friends Provident, Salisbury 100.
Business Professional Focus Groups
These sessions with accountants, bankers, solicitors, commercial property agents and insolvency
practitioners were very valuable in gaining intelligence and insights into business activity, current
issues and potential actions for national and local government. They were added to through
intelligence gained from ‘credit crunch clinics’ run by WACC and with email correspondence with a
range of businesses.
22 Current Business Climate
Confidence was a major concern but the levels of concern varied in different part of the county. All
had seen demand fall but the scale of reduction was seen as more serious for businesses in west
Wiltshire, than in the north, Kennet or Salisbury areas. In the west, people described some
business order books as ‘falling off a cliff’ and expressed real concern at the speed with which the
downturn has hit business turnover. This, together with the lack of credit, meant that what were
described as ‘good businesses’ were going to the wall.
In Salisbury the confidence issue was about how long the recession might last. The private sector
in that area was seen as coping and ‘hanging in there’ but a long period of reduced demand would
see many more business casualties over the next 2 years. There were some indications of
renewed life in the residential property market but little demand in the commercial arena.
In Chippenham there was a greater sense of optimism. There were indications that the residential
property market was starting to move, but also of activity starting to happen in commercial
property. The retail sector was seen as doing relatively well in market towns such as Devizes,
Pewsey, and Tidworth.
In all three sessions insolvency practitioners indicated there was not a significant increase in their
work in Wiltshire, compared with the areas around the county, which was a very positive note.
There was recognition that the relatively large public sector in the county, together with agriculture
and the successful R&D companies in the Salisbury Triangle, provided important economic buffers
for Wiltshire.
National media coverage of the credit crunch and the economic downturn was roundly
condemned in all three sessions. There was a strong view that the media had accelerated the
downturn in demand and worsened the speed and depth of the recession by the generally alarmist
approach to reporting.
There is a phenomenon that behavioural economists call ‘information cascades’. They are often
seen in financial markets where they can feed speculation and create cumulative and excessive
price moves, either for the whole market (a market bubble...) or a specific asset, for example a
stock that becomes overly popular among investors. Information cascades are usually considered
by economists as products of rational expectations at their start but as irrational herd behaviour if
they persist for too long, which signals that collective emotions come also into play to feed the
cascade.
In the context of the credit crunch and the speed and all-pervasive nature of modern
communications, many argue that the national media has caused and exacerbated herd behaviour
with inevitable impacts upon the decisions made rapidly by businesses and individuals. Analysts
point to the heightened impact of such decisions compared with previous recessions.
‘Sentiment has the potential to move us farther, faster than before. This is
because we are richer. Since the last recession, our income has grown by more
than 50% in real terms. Increased wealth means more of our spending is
discretionary, less goes on essentials and we can stop our discretionary spending
at a stroke if the mood takes us.....mood matters.’
M Blastland & A Dilnot,’ The Times, 21st October 2008
23 Issues for the Private Sector
Many interesting and varied points were made but the following were particularly noteworthy:
•
The ‘credit crunch’ was bound to happen and what we are now going through is a long
needed correction to the UK economy and to individual business models. The growth of
much of the past few years was described as ‘abnormal’ and unsustainable. Businesses
will need to focus on sound assessments of real demand and financial models that place
less reliance on high levels of borrowing.
•
Many business owners lacked experience of managing in a difficult business climate
because demand and growth had been so strong for the past 12 years. This had led to little
focus on cost reduction and cash management – the skills now needed. Strong
managers/management teams were able to cope but the less skilled exhibited weaknesses
in management practice that were now causing problems for their businesses.
•
There was more creativity by good businesses to avoid redundancies. Many had found it
difficult to recruit and retain good staff and their skills – they were going to greater lengths
to try and keep them with the business through the downturn, so that they had the skills
they needed when business improved again. More businesses were using measures such
as no overtime, short time working and pay reductions as ways of managing their payroll
costs, whilst keeping jobs.
The consequence of this is that there are significant falls in personal and family incomes
that are not measurable in any statistics. However, for those whose personal finances were
already stretched, income losses such as these can result in major consequences for their
personal circumstances.
•
The converse of the above point was that there were businesses that had dealt poorly with
staff in the current downturn. There was a concern that employment law was ignored in
some cases but also that it was too complex for smaller businesses, in particular, to cope
with successfully. The consequences of this for the employees affected adversely are very
significant indeed.
•
The major task for all businesses at present was to conserve cash. Any measures to do
that would help business at present. Examples of current changes in normal practice that
were helping included:
o
o
•
Landlords, especially for retail properties, who were willing to receive rent payments
monthly, rather than quarterly
HMRC was recognised as being much more willing to receive tax payments on an
instalments basis for all taxes, including VAT
There was a great deal of debate about the role of the major banks and the availability of
credit. Representatives of the banks stated that there was a willingness to lend for the right
proposition. The view of other professionals was that the banks were currently very risk
averse, so that even well founded propositions were rejected. The lack of confidence in
valuations for security purposes contributed to that. The timescale for approvals of lending
proposals was increasing to 8-12 weeks, which was also a problem when businesses
needed cash quickly.
24 The general view was that banks were not lending in a reasonable way – having been
reckless in recent years in investment banking, the pendulum had swung too far to risk
avoidance in commercial and retail banking. Whilst there was not yet much evidence of the
removal of financing facilities that occurred in the last recession of the early 1990s, damage
was being done to businesses that had a good track record.
There was a strong view that the major banks had consolidated so much that there was no
competition for loan finance. There was genuine concern that until the banks started
lending sensibly the recession would not end, coupled with an acceptance that Government
had given them two competing objectives – to restore the health of their balance sheets
and to restore previous levels of lending.
•
Government measures and initiatives – the view was that measures taken to try and
ameliorate the impact of the credit crunch and downturn had not yet had an impact in the
real economy. There was criticism of the 2% VAT reduction and the costs it had imposed
upon retailers. Support schemes such as the ‘Enterprise Guarantee Scheme’ were seen as
well meaning but difficult and slow to access. There was little assistance available to help
larger businesses.
The issues in the above two points were commented on by two major Wiltshire businesses:
‘In my business it is getting very much tougher as each month passes. The Government initiatives
have had absolutely no positive impact on my particular business. In fact, even though we are
relatively healthy with good profitability and cash flow over the last few years, our bank has recently
halved our overdraft facility and charged us an extra 1% for the remainder. That could have brought
a less well positioned business down; we are fortunate and can probably withstand the extra
pressure, for now. I expect things to get very much worse and am extremely concerned about the
next 12-18 months.’
‘(there should be)....some combined pressure from Local Authorities on Central Government to step
in and check current callous banking practices, where businesses are being squeezed on borrowing
costs and facilities by banks simply keen to re-generate enormous profits. Even we as an excellent
customer with excellent credit rating are being squeezed by.......... and I have heard numerous
stories around the patch of other businesses being forced to pay higher borrowing costs or have
facilities withdrawn. It doesn’t seem at all in keeping with Central Government policy .......’
•
There was considerable criticism of the current planning regime, especially in West
Wiltshire. Strong representations were made that £millions of major development
investment in the area had been lost because of a lack of priority, urgency and
professionalism in the planning process. The costs now imposed upon the development
process were considered excessive. The most worrying perspective was a perceived
negative approach to ‘business applications’ - a sense that the planning process was about
how an application might be refused, rather than supported and improved so that it could
be approved.
25 •
An important issue about sustainable and accessible transport was made by a number of
businesses and their representatives. The basic point was made by a very successful
engineering business:
‘On a second transport point, rail transport does provide regeneration and growth. Can
we put the north south Wiltshire rail link on the agenda? At the moment stations such as
Melksham are poorly served. Cannot RDA and others combine to seek proposals for an
enhanced service?’
There is a campaign group seeking to achieve much better rail services through the
‘TransWilts’ rail corridor linking Swindon, Chippenham, the West Wiltshire towns and
Salisbury. Their case has been strengthened by recent work published by the Department
for Transport on 11th March 2009 ‘Delivering a Sustainable Transport System: City and
Regional Networks Data Book’ which provides a range of strategic assessments that
support the case. The level of out-commuting in Wiltshire has been referred to in the
economic analysis. The pressures on the A350 and A303 main road routes are well known.
The case for better more sustainable transport for Wiltshire’s businesses and people is a
good one and should continue to be pressed upon First Great Western and other relevant
parties.
•
Finally, it should be noted also that there are some businesses in Wiltshire that continue to
perform very well and have recorded some of their best results in the period to December
2008.
Ideas for Actions
Positive suggestions to assist businesses were many and varied. They included:
1
Short term cash flow and cost reduction measures suggested
• Spread payments for business rates over 12 rather than 10 payments – small but every
little helps!
• Large companies and public sector to pay SMEs promptly
• Increase awareness of HMRC willingness to spread payments
• Reduce business rates and increase awareness of small business rate relief
• Reduce or remove car parking charges.
2
Rebuild confidence
If we cannot influence national media, work can be done with Wiltshire media to start to rebuild
confidence in the local economy. Examples of activity suggested were:
• promote good news re local business successes
• when consumer activity is strong emphasise it e.g. car sales, house sales
• highlight bank investment in new developments
• improvements in economic statistics should be highlighted; bad news put in a proper
context
• run ‘buy local’ campaigns without being overly protectionist
• seek to find a use for empty shops in high streets
• ensure town centres were not allowed to degrade in order to increase the likelihood of
new business take up at an early stage of the upturn.
26 3
Support investment and improve Wiltshire’s infrastructure
• local authority investment in roads
• press First Great Western for improved rail services
• seek support for financing new developments
• change the culture in the planning process
• deliver greater flexibility in short-term change of use planning applications for empty
retail premises
• in the longer term seek to allocate more land for employment use
• promote new thinking about the future of town centres
4
Help SME survival
Increase awareness of the help available free from Business Link and local professionals.
Encourage businesses to get proper help to address employment, financial, marketing and other
business issues to enable their continued existence and development.
However, there is an issue about access to significant expertise, where small businesses leave it
too late or do not use it at all, partly because of a fear of the cost. Consider a fund to support small
business access to specialist expertise with a subsidy.
5
Start Up Support
Whilst there is some training available, there is merit in considering greater assistance to new
businesses that can develop a sustainable financial model for products or services that support a
sustainable economy. There was a strong view that this is the way we need to be thinking.
6
Government policy
There were messages that needed to be fed back to Government, using Wiltshire’s MPs, regarding
excessive regulation; the need for simplification of the tax laws and new tax incentives to support
new business investment; the behaviour of the banks; the need for improved road transport and
rail services.
27 Chapter 4
The Impact on Wiltshire’s Public Services
Introduction
Wiltshire’s public services are collectively the largest employment sector in the county – the current
County Council, shortly to be joined with the four District Councils to form the new Wiltshire
Council, NHS Wiltshire, Wiltshire schools and Wiltshire College, the Army located in Wiltshire, the
Police Service, the Fire and Rescue Service and the Probation Service and a range of staff
employed in various national government agencies, together account for approximately 62,800
jobs, 31% of all jobs in the county. It should be noted also that approximately 4,600 Wiltshire
residents also work in the public services but out-commute to those jobs.
At this stage of the economic cycle, where the Government has taken a decision to invest in public
spending to assist the level of demand in the economy, the scale of public services employment
helps to underpin the resilience of the local economy.
To assess the impact of the credit crunch on the public services, questionnaires were sent to all
member organisations of the Wiltshire Public Services Board (WPSB) and the Service Directors of
Wiltshire County Council; national surveys by the Local Government Association, the Improvement
and Development Agency (I&DEA), the Audit Commission and others were reviewed and meetings
held with some representatives.
Main Findings
Whilst current employment levels across the public services are not being reduced substantially,
the credit crunch has had a number of important effects:
1
Reductions in Income
•
•
•
2
Falling Investment Income - public service organisations are generally required to operate
with balanced budgets. They have to have positive cash balances which are invested to
generate interest and support the budget as a significant line of income. The major
reductions in the bank rate by the Bank of England and the related reductions in interest
rates by savings institutions have reduced investment income considerably.
Lower revenue receipts – income from activities such as planning and building control fees,
land search charges, car parking charges, lettings of halls and other facilities was under
pressure; Section 106 income was also reducing.
Private sector sponsorship of joint activities has decreased.
Reductions in Capital Receipts
For public services capital receipts are a vital source of funding to support new developments and
investment. The decline in the property market has reduced both the demand for publicly owned
land buildings for commercial use and also the value of those assets. Where deals have been
made, developers are seeking to renegotiate Section 106 agreements and reduce their
contributions on affordability grounds. The overall impact is to slow down the rate of new or
expanded school building; land sale deals have fallen through; and developments that were once
attractive are not proceeding as planned. The inability to maintain or grow capital spending will
affect the quality of public assets such as sports facilities.
28 3
Increased Costs and Demand on Services
The public services, like everyone else, have experienced significant rises in fuel and utility costs,
waste services and construction materials.
Some public services have experienced increased demands on their direct services but also on the
services they commission from private and voluntary sector partners. There has been increased
demand for actions to support business. The Councils have found some additional resources to
increase the capacity of the CABx and credit unions to meet the increased demand for their
services. There has also been some increase in bad debts. Increased numbers of pupils are
entitled to free school meals. Applications for housing benefit have increased substantially. It can
be anticipated that some of these demands will increase as the recession continues.
4
Employment Levels
In general, employment levels are expected to remain fairly stable, although the less than
generous Rate Support Grant Settlement for Wiltshire and the factors above have put pressure on
budgets.
The Army is expecting to see increased numbers move to the Salisbury Plain Super Garrison at
Tidworth as it continues its programme of resettlement. It also has vacancies for young people to
join the regular Army – at a time of recession this becomes a more attractive option for many.
The Probation Service is being affected adversely as its funding settlement with Government has
resulted in budget cuts of 25% over the next 3 years, with a target to operate with 33% fewer staff.
The Police Service has to achieve efficiency savings also but is on target to do so without
significant impacts upon staffing levels.
Conclusion
The public services are an important strength for Wiltshire in the current downturn. However, they
too are being squeezed by the combination of reduced income, increased pressure on costs and
increased demands on services. The Probation Service is being reduced substantially, which is a
concern.
There is an expectation that the new Wiltshire Council will exercise leadership but that has to be
tempered with the knowledge that resources are tight. With the current and expected very low
levels of inflation and even the prospect of deflation, all services will come under pressure not to
increase rates and charges in 2009-10 and even to reduce them. It would also be prudent to plan
for a medium-term scenario at a later stage in the economic cycle where Government policy will
have to reduce public spending substantially. This last point has been emphasised very recently by
the Chief Executive of the National Audit Office when reflecting on the current levels of UK public
sector debt.
‘.......tax increases and spending cuts are inevitable after the election, assuming there are
signs of economic recovery by then....which is why any managers of a public service who
are not planning on the basis that they will have substantially less to spend in two years
time are living in cloud-cuckoo-land.’ Steve Bundred ‘The Times’ 27th February 2009
29 Chapter 5
The Impact on Wiltshire’s Voluntary Sector,
Partnerships and Community Areas
Introduction
To get further insights into the impact upon Wiltshire’s people and places, survey questionnaires
were sent to the voluntary sector, with the assistance of Community First, the Wiltshire
Partnerships and Wiltshire’s Community Area Partnerships. The Voluntary Sector had considered
the credit crunch at its Assembly meeting of 19th November and provided a report of the views
expressed there. This work was supplemented by national research published by the LGA and the
NCVO (National Council for Voluntary Organisations) and the Wiltshire County Council Review of
the Voluntary and Community Sector in Wiltshire and its workings.
The Voluntary Sector
The impacts members reported on individuals and communities were wide ranging. Some are
detailed elsewhere in the report but the major concerns were that:
•
•
People already struggling to ‘keep afloat’ would tip over into casualties with increases in
unemployment, debt problems, family breakdown and housing problems, including
repossessions and homelessness
The elderly, who rely on relatively fixed incomes and savings interest, were being hit by
increases in food and fuel costs and suffer from the loss of local post offices and shops.
Concerns were expressed for the elderly in rural areas who were seen as being particularly
vulnerable.
‘When family breakdown occurs, the home cannot be sold and couples are forced to stay together.’ ‘There is an increase in clients with multiple issues including unemployment, low skills and debt.’
The major issues for the sector itself can be summarised as:
•
•
•
•
•
Increased demand for services as more people need support
Reductions in income, actual or feared, due to lower interest rates, less charitable giving,
less success with fund-raising and sponsorship, less grant funding available and not
inflation-proofed
Reserves will need to be used and eroded
The potential need to streamline operations and consider the possibilities of mergers was
recognised
There was a concern about the potential loss of volunteers but that was balanced by those
who thought that more people would help others and decide to volunteer in more difficult
times.
30 ‘Our monthly mileage rose from 3,500 in the early Autumn to 5,500 in November as more people are using us.’ Link Scheme ‘We are freezing salaries and adjusting service delivery to cope with reduced income.’ There were many respondents who wished to be positive and believed the credit crunch could act
as a catalyst to produce moral, cultural and community benefits:
‘It is a challenge to the belief that money is the be all and end all’ ‘It will encourage people to think local, buy local and support local activities and facilities’ ‘We need to work together to change values in local communities.’
Suggestions for action were many varied but important ones for the sector were:
•
•
•
•
•
The need for clear statements from the statutory sector about the services it wishes to keep
at all costs
The need for more funding – but most respondents were realistic about the likelihood of
that
Do more to promote benefit take up, energy efficiency measures and financial inclusion
services
Don’t increase Council Tax; make charities VAT exempt
Do more to promote volunteering and strengthen the advertising of volunteering
opportunities.
Research and observations from the work leading to this report suggests that:
•
Whilst local authorities cannot be expected to fill the holes left by losses of other income,
they may wish to operate an emergency grant or emergency loan scheme to assist
important agencies in financial difficulty
•
The voluntary sector consists of a large number of groups and associations. This produces
strengths and weaknesses. The strengths are the ability to focus on relatively narrow areas
of need, either by issue or area, and to secure very motivated support from those who have
a strong commitment to the cause or the place. The weaknesses are the difficulty for the
‘lay person’ in understanding what is available, which organisation does what and knowing
where to go to get support; the overheads associated with the running of so many individual
organisations; the lack of clarity over which organisation does what in helping to organise
and support the work of the sector.
31 Messages from Partnerships
Some are reported elsewhere e.g. community safety, but three particular areas of interest that are
not were:
1
Environmental Issues
The Environmental Alliance and other contributors suggested that impacts being seen and future
impacts feared included:
•
•
•
•
•
•
•
Reduction in fossil fuel use ( in the UK), partly associated with lower levels of economic
activity but also the heavy increases in fuel prices
The lessening in demand for recycled waste which led to some questions about the
continued viability of the activity
Reductions in local government and voluntary sector income
A slowing in household waste growth
Developers attempting to avoid Section 106 agreement burdens
Increased willingness to travel long distances to find jobs, with consequent increases in
carbon emissions
Increasing pressures for cheap food with negative impacts on mixed farming and
biodiversity.
The Alliance made a number of important points with regard to the future, which chime well with
observations from economic and business contributors to the report. Their proposals were that:
•
•
•
•
•
2
The development of future policy and services should be underpinned by the recognition
that communities that are resilient to and reduce the impact of climate change are also
resilient to economic changes.
There should be greater encouragement to people to get out and enjoy the free, natural
world and boost their wellbeing so as to help combat depression and mental ill-health.
There should be more promotion of waste minimisation.
There should be development of greater self reliance with more growing of own foods and
the sharing of goods and skills.
There should be the development of a new type of ‘sustainability/environmental
apprenticeship’ for unemployed people to help develop the right skills for a sustainable
future.
Health and Well-Being Issues
There was recognition from the Board and other respondents that there was, as yet, no evidence
to suggest that there were identifiable impacts upon Wiltshire residents’ general health and wellbeing as a result of the credit crunch. As set out in Chapter 7, the hypothesis is that these effects
are more likely to manifest themselves at a later stage in the economic cycle, when the
consequences to individuals and families have had time to make an impact.
When considering the medium-term, it was felt there are potential effects on many areas.
Potentially negative concerns include:
•
•
•
Increases in stress related problems including anxiety, depression, and mental health and,
in the worst case scenario, suicide.
Higher stress levels leading to increases in smoking and drug and alcohol misuse,
supported by price reduction campaigns by retailers.
Reduced participation in physical activities that cost money.
32 •
•
•
Increases in obesity fuelled by perceptions about the relative cost of ‘healthy eating’.
Losses in income and increased demands on services may reduce the ability of agencies to
meet the needs of the population.
The reduction in available jobs affecting the ‘lifechances’ of young people and the
rehabilitation ex-offenders.
More positively it was suggested that:
•
•
3
Reductions in disposable income may result in more people stopping smoking and
misusing drugs and alcohol.
The publicity being given to ‘coping with the recession’ might encourage more people to
take decisions to improve the quality of their lifestyles whilst reducing their spending.
The Children and Young People’s Trust
The Trust Board identified similar issues but focussed on the vulnerabilities of young people. The
Board, and many others, expressed concern for the young people of Wiltshire who may shortly be
seeking employment. The fear expressed is that they will find it very difficult to obtain employment
with consequent damage to their self-esteem, motivation and personal development.
The scale of this potential problem is measured by the number of young people, aged 16-18, who
are Not in Education, Employment or Training (the so-called ‘NEET’s group) as a percentage of the
16-18 cohort. The data available suggests that this group has not yet grown as a result of current
job losses at this stage of the downturn. There was a ‘spike’ in September, where the numbers
increased significantly to over 900 but the Connexions Service has worked hard with those young
people to find them places. The historic picture suggests a level of NEETs running at 550-700. The
number at the end of December 2008 had reduced to 777 out of a 16-18 cohort of 11,678.
However, many would consider that number, and the general historic level, to be too high and a
waste of young potential.
A range of people have suggested that next August/September will be a ‘pressure point’ when the
2009 school/college leavers who might wish to take up employment may find it very difficult to do
so. This was a particular point made by the business community who expressed a concern for the
33 development of Wiltshire’s young people. This scenario could well create a much larger NEETs
group than in 2008, in which case the Connexions Service and others will need a greater range of
options available to ensure the positive development and use of the skills and energies of
Wiltshire’s young people.
Community Areas
On e of the concerns for Wiltshire has to be the potential for a particular area or place to be
affected very adversely by a combination of impacts resulting from the economic downturn. There
are historically many examples of towns that have been very dependent for employment on one
major employer or a few employers in the same industrial sector, which have been blighted for
many years as a result of the loss of those key employers. Despite a small number of speculative
concerns, there is no sense that a major employer is likely to be lost in the near future. Whilst there
has been some closure of post offices and pubs, no concerted loss of local services has been
reported.
All of Wiltshire’s community area partnerships were sent a questionnaire and a copy of the GWE
economic analysis for their area. The major theme that has come out of the returns and recent
meetings with a couple of the pilot Area Boards has been the downturn in retail spending, leading
to a loss of retail shops, together with the closure of some professional offices e.g. estate agents.
The developing concern is for the ‘street scene’ in town centres, if there are too many vacant
premises that are not being cared for properly. This would ‘put off’ any potential new businesses,
reduce the number of people coming into town centres at all and so worsen the situation for
remaining businesses, whilst encouraging anti-social behaviour, minor damage and worse.
Conclusion
At present there is little evidence of immediate significant problems for the voluntary sector,
partnerships or Wiltshire’s communities. There are concerns and the position will need to be
monitored. The environmental concerns are associated with climate change and its interaction with
the economic effects. The most significant issues that arise at this stage are for:
•
•
•
•
•
Young people and the potential for an increase in the NEETs group.
The need to develop and promote volunteering.
The need to give much greater attention to sustainability in all facets of policy.
The town centre ‘street scene’.
A clear route into help and advice for those who need it.
34 Chapter 6
The Views of Wiltshire Residents
Introduction
In order to gain some insights into the impact on Wiltshire residents a survey was commissioned
from the Corporate Research Centre of Wiltshire County Council. The survey received over 2,200
responses and provides a valuable picture of the opinions of Wiltshire people. The results are set
out in the pages that follow.
Main Insights
•
Lack of confidence
There is a high level of concern about the impact of the credit crunch. A significant proportion of
respondents (11%) had seen job losses affect them or their family and 40% felt less secure in their
job. There was pessimism about the ability of Wiltshire to cope with the consequences and a
particular worry for rural communities and the agriculture industry, although in all of those cases
the evidence suggests a case for cautious optimism. People do not think it is going to be over
quickly.
•
Support for action
There was strong desire to see the Council lead a response to the credit crunch and a lot of
support for many of the measures suggested. It is interesting to see particularly strong support for
energy saving, help for small businesses and improvements in the planning process. It is
interesting to note that residents do not want to see developments proceed at all costs, however.
Many do want to see affordable housing requirements maintained as part of the granting of
planning permission.
•
The majority are managing the situation
77% have reined in their spending in some way. 73% do not report any increase in their level of
debt. The main financial impacts they are concerned about are rising utility bills, the reductions in
savings income and rising food prices.
The consequences of some of the savings made by residents have been seen in the loss of
income for local businesses e.g. pubs, restaurants and clothes retailers, with a ‘knock-on’ effect for
business owners and their employees and the retail and services scene in Wiltshire’s towns.
•
There is, however, a significant minority who predict adverse effects
27% have seen increases in their levels of debt. 24% are concerned about losing their job and the
business survey suggests those fears are not unfounded. 10% believe they will struggle to pay
their mortgage or rent, with 5% fearing repossession of their home.
To put the percentages more starkly: out of 2,200 Wiltshire residents – almost 600 have increased
debt, 530 fear losing their job, 220 may not be able to pay their rent or mortgage, 110 fear losing
their home.
35 36 37 38 39 40 41 42 43 44 45 46 Chapter 7
The Impact on Social Issues
Introduction
The project has sought to identify social problems that have been exacerbated by the credit
crunch. Surveys have been undertaken of the voluntary sector that supports many Wiltshire
residents in need of assistance, the major public services and various partnerships. Meetings have
been held with some of the key groups and agencies. Data has been sought wherever possible but
timely, relevant statistics are not readily available in many areas. There is an argument also that
we are still at an early stage of the economic downturn so that some potential social impacts are
not yet evident.
What are the main social impacts?
There are many hypotheses about the social impacts of recession and speculation as to the effects
can range very widely indeed. For this study, a basic hypothesis has been used. It is illustrated in
the schematic diagram that follows, which is intended to suggest that none of the effects occur in a
logical ordered sequence but that there is a broad phasing that can be described as follows:
Impact Phase 1:
The economic downturn causes a reduction in income and/or an increase in costs for individuals
and families.
Associated with this will be issues to do with employment/unemployment and the need for
assistance to seek new employment and/or obtain state benefits or live off savings.
Businesses close down and vacate retail, office or industrial sites.
Impact Phase 2:
The effect of a reduction in income will depend upon individual/family circumstances – particularly
the level of indebtedness and the costs of servicing/repaying that debt, the level of
savings/reserves, the value of any assets and their levels of spending. Those with high levels of
debt costs, relative to their disposable income and minimal assets are most at risk of becoming
‘casualties’.
The difficulties that arise are likely to be with debt repayments and potential default, leading to
repossession measures by creditors and/or bankruptcy or individual voluntary arrangement
processes.
A major risk here for individuals and families is the loss of housing through repossession or
evictions.
Empty business premises may be subject to graffiti and vandalism and become sites that attract
anti-social behaviour.
47 Impact Phase 3:
The strains of these problems will have consequences for relationships, individual physical and
mental health. They will be evidenced by increased demand for statutory and voluntary sector
services. They may also lead to other problem behaviours – increases in family breakdown and
domestic violence, increases in acquisitive crime as a means of getting income.
Business premises can see an increase in arson as a result of serious anti-social behaviour or as a
fraudulent act. Increased number of empty premises in retail centres can create a depressing
‘street scene’ and undermine remaining retailers.
The consequences are increasing demands for services from the statutory and voluntary sectors,
which are themselves under pressure from the effects of the credit crunch and the economic
downturn.
48 A Social Impacts Schematic
Economic
Downturn
Unemployment
Reduced
Income
Business
Closures
Debt Problems
Empty Premises
Graffiti
Creditor Actions
Repossession or eviction
Bankruptcy
Family Breakdown
Increased stress
Domestic violence
Anti-social
behaviour
Vandalism
Depressing
‘street scene’
Arson
Acquisitive crime
Health & mental health
problems
49 What is happening in Wiltshire?
When people experience difficulties they may approach a very wide range of organisations for
assistance such as JobcentrePlus, local authorities, housing associations, a wide range of
charitable organisations. Many are referred from these organisations to the network that is seen as
the main provider of initial independent advice for residents, the Citizens Advice Bureaux, or use it
directly. In Wiltshire they operate, at present, on a district basis. Data from the Wiltshire CABx for
three quarters of 2008, compared with the same period in 2007, is as below:
Wiltshire Citizens Advice Bureaux
Social Policy Issues Data
April AprilIssue Category
Dec.
Dec.
% of
Total
Issues
2008
2007
2008
% of Total
Issues
2007
Increase
Benefits
Consumer
Debt
Education
Employment
Financial
Health
Housing
Immigration
Legal
Other
Relationship
Signposting
Tax
Travel
Utilities
10,583
975
11,629
146
3,314
755
401
2,704
308
1,720
392
2,122
634
393
293
512
12,280
978
12,267
171
4,185
840
416
2,724
290
1,926
309
2,380
875
375
281
706
29
3
32
0
9
2
1
7
1
5
1
6
2
1
1
1
30
2
30
0
10
2
1
7
1
5
1
6
2
1
1
2
16
0
5
17
26
11
4
1
-6
12
-21
12
38
-5
-4
38
TOTAL
36,881
41,003
100
100
11
in 2008
50 When the same periods are compared between 2007 and 2008, a
significant increase of 11% in activity can be seen. The
predominance of issues to do with debt and benefits can be seen.
However, most significant is the increase in 2008 of issues to do
with employment and the high volume of those enquiries. This
concurs with a response from the National Bullying Helpline,
based in Swindon but serving Wiltshire, which confirms increases
in issues of bullying at work and attempts to remove staff without
complying with employment law. It chimes also with observations
from the business sector that employment law is now extremely
complex, unclear and unwieldy. Many small business owners
cannot understand it and are not able always to afford specialist
advice. They cannot access the limited free assistance that can be
provided by ACASS et al also.
Housing Associations report greater pressure on their debt advice
services. District Councils have seen increased demand for
Housing Benefit advice. Both sets of organisations have and are
providing additional resources for Wiltshire CABx to help cope with
these demands.
1
‘Our redundancy
enquiries have
dramatically risen over
the last 4-5 months.
Previously we may have
dealt with one or two
cases of redundancy per
week, we are now
advising an average of 46 per day. Not all of the
cases are straightforward
redundancies as it
appears that some
employers are using the
credit crunch to get rid of
staff.’
CABx officer The Consequences of Debt
Many of the debt issues raised are to do with credit card and store charge card debts; unsecured
personal loans, often with organisations ranging from the secondary financing sector to ‘doorstep’
loan providers; overdraft problems with banks or building societies; and Council Tax arrears. The
Wiltshire CABx are seeing more people who wish to consider bankruptcy as an option for them.
National figures for personal bankruptcies have increased substantially - in Quarter 4 to December
2008 there were a total of 19,100, up 9.4% on Quarter 3 and 22% up on Quarter 4 of 2007. There
were also 10,344 Individual Voluntary Arrangements (IVAs), up 6% on Quarter 3 and up 16% on
the same period in 2007. There is no analysis available for Wiltshire residents, however.
‘We have also seen a rise in applications for charging orders for small
unsecured debts. It appears that small lenders want to protect their money by
applying to the court for a charging order so they can enforce the sale of a
property to get the debt repaid. This has resulted in unsecured debts turning
into secured, which changes how the bureau provides money advice and also
puts the clients' homes at risk.’ CAB officer
2
Housing Issues
Dealing with actions by creditors, ranging from pressure to pay, the use of bailiffs to legal action,
can then have an effect on the ability to pay rent or a mortgage, with potentially serious
consequences for housing.
At present, however, it would appear that agencies are helping most people to manage these
problems and avoid the loss of their homes, although any loss of a residence is very serious for the
51 people affected. Housing associations suggest that rent arrears are being maintained at relatively
low levels – Salisbury DC report arrears at lower levels than 2007; Selwood Housing report arrears
of 2.21% in April 2008, rising marginally to 2.77% in November 2008, with an increasing number of
small arrears occurring.
Orders at the County Courts for repossessions or evictions also suggest that the position is
relatively stable at present, which may suggest that services being provided by the CABx et al are
working effectively. However, the figures for Quarter 4 have been dampened by the introduction of
a process called the Mortgage Pre-Action Protocol in mid-November. This requires evidence of
reasonable attempts to resolve the problem between lender and borrower before legal action is
brought. It will not be until 2009 data is produced that it will be seen whether this has helped
resolution and the avoidance of repossession or has merely postponed the problem.
Mortgage Possession Claims
County Court Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Total 2008 % Change from 2007
32
41
30
25
128
+14%
Salisbury
121
116
95
84
418
-4%
Trowbridge
Landlord Possession Claims
County Court Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Total 2008 % Change from 2007
77
68
62
74
280
+4%
Salisbury
95
103
120
94
413
-5%
Trowbridge
The data on homelessness also indicates that the consequences of the ‘credit crunch’ have yet to
impact severely on large numbers of individuals. There is a reported waiting list for social housing
of approximately 16,000 but that has not increased significantly in recent times. Homeless
decisions taken by District Councils in 2008 have been as follows as:
Number of Homeless Decisions Qtr.1
Qtr.2
(April-June) (July – Sept.)
24
21
Kennet DC
20
23
North Wilts DC
57
35
West Wilts DC
Not
available
Salisbury
3
Personal and Relationship Issues
There is concern that the consequences of the ‘credit crunch’ are starting to have an impact on
personal relationships, with consequences for families and children. Voluntary sector agencies are
now seeing in early 2009 significant increases in requests for help. They state that there is an
increased incidence of couples having to stay together because they know they cannot sell their
property with resulting increased domestic tension. The CABx report an overall increase of 15% in
such issues in January and February 2009, compared with the previous year. Relate Mid-Wiltshire
had an increase of 18% in client registrations in January and 51% in February 2009, compared
with the same months in 2008, with a worrying increase in young people applying for support.
52 These are early signs of increases in family problems. It will be important for the voluntary sector
agencies that work in this area to monitor trends and liaise closely with Wiltshire Council et al.
4
Crime and Community Safety
(adapted from a Wiltshire Police report)
There is very little empirical evidence to show the effects of an economic credit crunch upon
criminality. It is not believed that everyone who becomes unemployed or suffers reduced income
will turn to crime. The hypothesis is that a recession and the loss of jobs and income could be
expected to have some impact upon crime levels and hence upon demand. With a reduction in
money to support current life styles there is a possibility that some people may be tempted into
committing crime. To avoid unnecessary fears evidence is required to prove or disprove any links
or assumptions about the credit crunch its impact upon crime and community safety. Below is set
out the relevant evidence to date:
4.1
Acquisitive crime – Shoplifting, Theft, Burglary and Fraud
The only crime type that has shown a significant increase in Wiltshire has been shoplifting – up
+29% against baseline and +14% July/Sept against Oct/Dec.
An examination of the main areas where shoplifting is increasing show that both Chippenham and
Trowbridge have had a continuing increase in this type of offence. This is not the case in Salisbury,
where recorded offences have reduced.
Non-dwelling burglary has shown a statistically insignificant increase. All of the other crime types
have reduced both against the baseline and pre and current credit crunch period. Shoplifting, theft
& handling, burglary and fraud are the main crime types that it would be expected may increase.
Whilst historically shoplifting and fraud are under reported at this stage, with the exception of
shoplifting, there has not been an increase in recorded acquisitive crime. National police forces are
projecting a 7% increase in burglary. Wiltshire currently is one of a few forces that have a reduction
in burglary. At this stage of the credit crunch it is not known if the overall reduction will be
maintained or if the predicted increase in non-domestic burglaries will occur.
4.2
Night time Economy
Changes in the night time economy brought about by the reduction in spend be expected to reduce
alcohol related crime and alcohol induced anti-social behaviour (ASB). Currently 29% of all ASB
incidents are recorded between 8pm and midnight, with Saturday, at 17%, being the busiest day of
the week. Whilst there are early anecdotal indications that a reduction is starting to occur, it is too
early to confirm the full extent of this. The Wiltshire areas that suffer most from ASB are
Trowbridge and Salisbury.
There has been a reduction in the level of recorded violent crime. Violent crime reduction has been
a priority area for the force so the current reductions are in part due to the proactive approach
being taken to reduce violent crime.
There is a concern that as licensed premises seek to attract customers there may be a growth in
cheap drink offers. This will need to be closely monitored through Police Officers and Licensing
Officers to ensure that effective controls are in place to prevent irresponsible sales of alcohol and
hence an increase in alcohol related violence and ASB. If the night time town centre economy
should change significantly then there is potential for alcohol related crime and ASB to disperse to
the local neighbourhood areas. Rowdy/nuisance behaviour accounts for 68% of all ASB incidents
reported currently. Neighbour disputes account for 6.43%. It is this type of ASB that could increase
with a change of drinking habits brought about by the credit crunch.
53 4.3
Domestic Violence
Changes in drinking habits, leading to more home consumption plus the increase in stress on
some families through the recession, potentially increase the risk of domestic violence offences.
The level of recorded domestic incidents from April – Dec ’08 has reduced by 8.69% in County
against the same period in the previous year. The largest fall has been in North & West Wiltshire
with a 10.9% reduction. Kennet & Salisbury have a 1.9% reduction. At this stage, therefore, there
is no apparent link. However, this may change as the credit crunch continues to bite. It is too early
to provide firm evidence around this and the situation will continue to be monitored closely.
It should also be noted that Wiltshire Police, in partnership, is looking to increase the level of
reporting of domestic violence. As the support on offer to victims grows it is hoped that they will
feel more confident and thereby feel able to report such incidents. Therefore an increase in the
number of reported incidents would be an expected outcome as confidence from victims continues
to grow.
The need to fully understand the impact upon other services that provide support to victims and
indeed offenders and whether these will be reduced as a result of the credit crunch needs to be
assessed. Changes in support, brought about by credit crunch induced service cut backs, could
have an impact upon this type of offence.
4.4
Empty business premises
The increase of empty shops and business premises in town centre’s raise the risk of an increase
of minor damage, arson and quality of street environment problems. There has not been a
noticeable increase in such problems to date. It is to be expected that the main places affected
would be in the towns most at risk of business closures - Salisbury, Chippenham and Trowbridge although all towns are at risk when empty premises become more common.
In order to address this effectively, processes need to be put in place with Councils, town centre
managers, landlords, estate agents etc to ensure that prompt remedial action is taken where void
business premises are found to be insecure or subject of damage etc. The ‘broken window
principle’ says that a broken window or graffiti does no great harm to an area if promptly
addressed, but if left unattended it sends out a signal that no one cares and that it is safe to
damage things, leave litter etc. Failure to deal with minor issues have an adverse effect upon
neighbourhoods and has the potential to hinder the recovery from the recession in that new
businesses will be reluctant to move into run down areas.
4.5
Arson
There is a risk, linked to the above that there could be an increase in the level of reported arson. In
addition businesses and vehicle owners could be tempted into committing arson to their property
and then making a false claim. There has been a year on year increase in reported arson in
Wiltshire (+42%) when comparing the period Oct/Dec 07 with Oct/Dec 08. When looking at the
July/Sept 08 in comparison with Oct/Dec 08 then there has been a reduction of -20%. Again, there
is no clear evidence that this offence is on the increase.
Economic circumstances could change this and the need to work closely with the Fire Service in
the investigation of suspicious fires will then put increased demands upon Police specialist
services.
54 4.6
Roads Policing
The credit crunch and the changes in economic circumstances have the potential to affect the use
of vehicles. It was found that the high increase in fuel prices during the summer of 2008 had a
correlation in regard to fatal road traffic collisions (RTCs). The reduction in people using vehicles or
driving more economically where they were doing so i.e. not so fast, led to a reduction in fatal
RTCs.
Even though the price of fuel has dropped again, if people are looking to make economies, then
reduced vehicle miles and more economic driving may impact upon fatal RT’s. Vehicles seized for
no insurance has been increasing since October 2008 and this could be an indication that some
people are starting to run the risk of using a vehicle without insurance. Failing to tax vehicles has
also started to increase. Both of these would suggest that anti social use of motor vehicles is on
the increase.
4.7
Linked partnership issues
Any increase in demand will not only affect the Police but it will also impact upon our partners
across the wider criminal justice system - CPS, Courts Service, Probation, Prison service etc. If
there is an increase in offending it would be expected that the number of persons arrested and put
before the Courts would also increase. If this causes delays in the delivery of justice, then it will
impact upon confidence in the whole criminal justice system.
Should it become apparent that there is an increase in the level of NEET youngsters (Not in
Education, Employment or Training) then this would indicate a potential area of risk. The NEET
group is vulnerable both as offenders and victims. Identification of the locations of any increase in
NEETs would be useful in terms of resource allocation. In Wiltshire the number of NEETs has
slightly reduced from its September peak but there is a concern of the potential for a significant rise
in Autumn 2009.
A reduction in probation and or any of the alcohol/drug referral groups has the potential to impact
upon demand. The offending or re-offending rates for some vulnerable groups could increase if the
level of support available to them is withdrawn or reduced. This will increase the demand upon the
Force in regard to investigations and partnership work around managing persistent and prolific
offenders.
If there is a reduction in the level of gifts and donations being provided to the voluntary sector and
charities then this could have a knock on effect to policing. As an example a reduction of support
for the homeless puts a vulnerable group at risk both as victims and offenders. Again it is the major
centres of population that attract the rough sleepers.
55 Wiltshire Police Recorded Crime Statistics
Red = worsening, Green = improving OFFENCE TYPE
OctJulyOctChange Change Qtr. 2
Sept.
Dec.
2007 to
Dec. 07
2008
2008
2008 to Qtr.3 2008
All Recorded Crime
6,183
6,289
5,752
6.97
8.54
Shoplifting
Theft and Handling
Arson
Theft of Motor
Vehicle
Violent Crime
Criminal Damage
Non-Dwelling
Burglary
Dwelling Burglary
331
1,522
24
375
1,504
41
427
1,365
34
-29.00
10.32
-41.67
-13.87
9.24
17.07
210
1,242
1,620
158
1,429
1,444
154
1,193
1,401
26.67
3.95
13.52
2.53
16.52
2.98
523
279
April Dec.
2007
2,812
July Sept.
2008
224
512
268
524
260
April Dec.
2008
2,587
Oct Dec.
2008
185
-0.19
6.81
-2.34
2.99
Domestic Incident
Fraud
8.00
17.41
Other Issues
To date no evidence has come forward of particular problems in relations to equal opportunities
issues because of the recession. There have been no particular issues for rural areas either, other
than the high percentage increases in JSA claimants in some villages and small towns.
Conclusions
The impact of the credit crunch upon social issues in Wiltshire is at an early stage in the cycle. It is
clear that the immediate major issues are to do with family finances and employment and the
provision of advice and support to those people who need it. There are early signs of relationship
and family problems increasing. The other potential areas of social problems have not yet come
forward in any significant way. At this stage Wiltshire is showing itself to be different to many other
parts of the country and socially resilient in the face of the economic downturn. It is important,
however, that these issues are kept under review and that preparations are made to respond to
residents’ needs.
56 Chapter 8
Capital Investment in Wiltshire
Introduction
In considering the potential for improving the economy a consideration has to be the plans that are
already in existence for significant investment and development in Wiltshire. These may have been
adversely affected by the credit crunch, if a shortage of credit and the difficulty of realising
previously planned value from asset sales mean that a project is halted or slowed. There may be
other issues that are barriers to progress that need to be addressed with urgency to increase the
level of economic activity in the county. Some of the opportunities available are set out below.
Housing
Wiltshire has targets for the completion of additional dwellings (net). The plans in place for
expected completions are as follows:
Year
2008-09
2009-10
2010-11
Completions
Target
2,229
2,517
2,565
Projected
Delivery
2,193
2,336
2,578
Variance
-36
-181
+13
The actual completions data for the period 2008/9 will not be available until around September
2009 at the earliest due to the way in which completions are monitored. However, for comparison
purposes it is positive to note that in 2007/08 2,668 net additional dwellings were achieved.
Notwithstanding the positive picture, it will be important for the Council to pursue opportunities for
funding for housing development from Housing and Communities Agency (HCA) and the South
West Regional Development Agency (SWRDA).
Transport Infrastructure
There are schemes that are supported by the SWRDA Regional Allocation of national Government
funding, which have not yet started:
1
2
A350 Westbury By-Pass: this scheme worth approximately £33m has been the subject of a
planning enquiry which ended in October 2008. The Inspector’s report and the Secretary of
State’s decision are awaited. The funding to start the work is available from April 2009.
Swindon-Kemble Rail Scheme: this Network Rail development has been allocated £21.6m
from regional funds and is due to start in 2009-10.
Economic Development
1
Castledown Business Centre: in this development at Ludgershall, near Tidworth, SWRDA
has funded the land acquisition and construction of 21 business units providing new startup business accommodation with priority given to ex military personnel who wish to start a
business on leaving the armed forces; these units are available from April 2009. As part of
this joint venture with SWRDA, Wiltshire County Council is funding the construction of a
Business Innovation Centre and associated business support services for the business
community in the area. The total project value of the capital and revenue schemes amount
57 to £1.3 million; a planning application for the capital scheme has been submitted to Kennet
District Council Planning and is awaiting decision (March 09). The Innovation centre is
scheduled to complete in October 2009.
2
Wiltshire College: the College has two major redevelopment projects in progress:
•
Chippenham – the redevelopment of the campus with a £25m project due to run
from 2009-11.
• Trowbridge – a relocation to create a new town centre campus on the former
Bowyers site. This major regeneration project is costed at £46m and planned to run
from 2010-12. There are other suggestions for adjacent redevelopment of the
former Bowyers site to provide business incubation facilities.
These are two significant construction projects that will bring modern education and skills
training facilities into place at the start of the next phase of economic growth. They will bring
a timely and much needed boost to both towns.
Regeneration
The main projects in the pipeline are commercial developments of various kinds. Those that could
provide some economic stimulus if they could be brought forward quickly include:
1
2
3
The Trowbridge ‘Waterside’ Scheme: this mixed use scheme, plans to create a multiplex
cinema, bowling alley, restaurants and other leisure uses, new library, offices and highquality apartments. The proposals may need to alter in the light of market changes. It is
unclear at present whether the project will start in 2009.
The ‘Ushers’ site, Trowbridge: this will bring a Sainsbury’s supermarket and additional
housing to Trowbridge. The scheme has received planning permission and is due to start
on site in 2009.
Kingston Mills site in Bradford on Avon: site clearing is under way; a mixed
commercial/housing development could start in Autumn 2009.
NHS Service Development
NHS Wiltshire’s ‘Strategic Framework 2009-14’ sets out its plans to improve its estate over that
period, with most of the proposed investment in the earlier years. New Primary Care Centres are
scheduled for Devizes (with an adjacent NHS Treatment Centre), Salisbury, Trowbridge and
Westbury. Chippenham will see investment in the Maternity Unit and redevelopment of the
hospital.
Conclusion
The above is not a comprehensive picture but illustrates that there are a number of significant
investment opportunities for important development projects to be brought forward. These would
assist the construction industry and its materials supply chain. They would bring important benefits
to Wiltshire, as well as being a boost to confidence.
Support from national Government and its agencies e.g. HCA, the Learning and Skills Council
(LSC), together with SWRDA, will be required. It may help also if greater freedoms were given to
Wiltshire Council to pump-prime capital investment in the county in order to provide a rapid
economic stimulus.
58 SECTION 2 A Framework for Action
Chapter 9
Issues in Decision Making
In moving from a consideration of the impact of the credit crunch-economic downturn-recession on
Wiltshire to making decisions about what action might be taken under the auspices of the Wiltshire
Assembly, it is important to reflect on what should influence those decisions. A few thoughts are
offered in an effort to stimulate thinking and to underpin proposals for action - they draw upon
considerations of perspectives, values and aspirations.
Messy Solutions
The Assembly was advised by Matthew Taylor to exercise leadership and to do so by providing
clear and consistent messages to the public about the sorts of lives it wants them to lead:
•
to become more self-sufficient - taking more responsibility for their health, learning,
carbon footprint, pension etc.
•
to be more other regarding – giving more back to society and in so doing to other
people
•
to be more engaged – being prepared to share in making the hard choices that society
has to make.
There are challenges in achieving that whilst recognising the different perspectives people have on
such issues, so he described also the cultural theory that there are four main ways of organising,
perceiving and justifying social relations that need to be considered in policy design and
interventions.
Individualism – pursuing your own interests; competitive Egalitarianism – pursuing the collective good; solidarity Hierarchy – emphasis on being led by the great and powerful; bureaucratic Fatalism – nothing ever changes, just get on with your life These ways of ‘seeing’ underpin our belief systems, values and political perspectives. Sociologists
now suggest that no one approach on its own can be successful – what can be described as ‘the
failure of dogma’.
The different perspectives are constantly in tension and underpin essential debates on policies and
actions. They argue that the best solutions will be determined by the assessment of appropriate
59 actions and processes at a particular time to address a particular set of circumstances. As JM
Keynes is reported to have said when challenged about revisions to his economic thinking, ‘When
the facts change, I change my mind. What do you do sir?’ Such flexibility in arriving at solutions
means that they are unlikely to be ‘clean’, with clear cause and effect, but they may allow progress
to be made because they draw upon and include the conflicting ways of seeing in our culture.
This approach to solutions suggests that the measure of success is whether combinations of public
policy (hierarchy), entrepreneurship (individualism) and citizen’s activities (egalitarianism) have
contributed to the alleviation of pressing, practical, collective problems. Fatalism helps us to
recognise that certain problems demand resources and actions that are beyond the scope of local
solutions, in doing so it releases us to turn our energies to what we can do to make a difference to
where we are.
A Priority of Needs
Decisions about the use of scarce resources need to be guided by a shared sense of the
important considerations to apply in choosing between various courses of action.
It can be argued that human activity and the use of natural, human and technological resources in
an economy occurs to meet the perceived needs of the human condition. Human beings are driven
to meet those needs for themselves, their families and their wider social groupings. Those needs
are of varying kinds, most famously classified in Maslow’s Hierarchy of Needs as illustrated below:
Economic activity to meet those needs generates private wealth, part of which is taxed to provide
public wealth. Public wealth in turn should be used:
• to assist those who are less able to meet their needs from their own personal activities and
resources, and
• to invest in public assets which benefit the population generally and are beyond the
capacity of private wealth to provide.
60 For example, the Government pledge to eradicate child poverty is an attempt to recognise that
the basic ‘physiological’ needs of children are not yet being fully met and need further
resources. The investment in the Armed Forces is a recognition that private wealth cannot
meet the ‘security’ needs of the population.
An approach to the use of public wealth may consider also that the higher is the type of need, the
greater should be the use of private resources to achieve it. The corollary is that public funding,
created for ‘the common good’, should be focussed on the ‘safety net’ principle of ensuring that the
basic needs of the human condition can be met and on the delivery of resources used by and for
the benefit of people generally. The debates and tensions about public as opposed to private
spending are, in essence, about the scale of needs necessary to provide a safety net for
individuals or to meet the common good.
In a period of recession, the overall wealth of a country is reduced from a previous peak. Public
funding and private wealth are reduced (whilst borrowing can expand the funding available, there
are limits to levels of borrowing, as the credit crunch has made abundantly clear). It is then
incumbent upon individuals and the community at large to focus on the prudent use of scarce
resources and to concentrate on meeting essential needs. Such an approach can increase
productivity and build social capital by more effective working in a common cause. It can increase
a sense of well being through motivating people who are then operating at the higher levels of
Maslow’s hierarchy. It links also to the next theme – the importance of sustainability.
A New Sense of Values
The impact study has found common cause between economists, business people,
environmentalists and many others – a sense that our economy and culture had been distorted by
unaffordable and non-essential consumerism supported by the financial institutions through the
ready availability of credit. It would be wrong to suggest that all have participated, but in general,
and as a nation, we have consumed or spent beyond our means. This has stimulated demand
beyond reasonable and sustainable (affordable) levels, particularly for non-essentials. This
process can be evidenced by such things as:
•
•
•
•
•
•
•
•
•
•
Over-inflated house prices.
Too many cars and too many non-essential journeys.
Too little use of public transport.
Rapid growth in more expensive and unnecessary convenience foods such as preprepared vegetables and ready-meals.
Household food waste.
Too many trips and holidays abroad.
Duplicate electrical equipment in the home.
Purchase of new replacement goods before necessary or, in the case of a broken item,
considering a repair.
A general lack of saving as opposed to consuming.
Purchases for non-essential items made on credit, such as furniture and holidays.
These activities have been strongly individualistic, as have been the motivations at the heart of the
financial institutions and many other businesses that have supported and driven it. Looked at
globally, the western democracies have generated societies, whose populations have demanded
massively disproportionate shares of the world’s resources.
There is now a need and desire for a correction to a more balanced set of values but to achieve
that without being patronising or guilt-ridden or nostalgic. The challenge is to forge a sense of what
61 collectively we want to value in the way we behave, use resources, the activities we undertake to
generate wealth and so on.
It is beyond the scope of this report to present a proposed set of those values. However, a
common strand in response to the damage caused by the credit crunch and the downturn has
been the desire to emphasise the important of the concept of ‘SUSTAINABILITY’ in all its senses
and contexts. “Sustainability” applies not only in the environmental context but also in the social,
economic, technological and political context. The concept can equally be applied to the actions
and decisions of the individual, local communities, civil society and the state. This may be helpful
to apply as a criterion in making decisions to use money, time and energy to now address actions
to ameliorate the impact of the credit crunch and to shape the future of Wiltshire. The types of
questions that can be asked in fleshing out the concept of sustainability include:
Economic sustainability: Is the product or service profitable and is that likely to continue? Is
there and will there be a continuing market demand for the product or service in a more
environmentally conscious world? Are the right skills/plant/energy sources/raw materials,
(including water) going to be available in the future to support the product or service? Is the impact
of associated transportation acceptable? Are the future waste implications of this business activity
acceptable?
Environmental sustainability: Are the effects damaging to the biosphere? Are the resources it
uses in short supply and needing to be conserved or rationed? How will it affect the creation of
carbon?
Political sustainability: Is it politically acceptable in a democratic society? Will parties continue to
give their support to it? Will it be acceptable to the majority of the population?
Social sustainability: Does it create or worsen violence, conflict, crime, inequality,
depression/stress, illness, poverty? Does it increase harmony between people? Does it help those
most in need?
Spatial sustainability: Is there room for these activities e.g. new houses, woodland, reservoirs,
factories? Are the commuting, business and leisure transport modes and movements produced by
particular planned developments in the area acceptable in their impact e.g. noise, community
severance, road safety, biodiversity impact, parking, energy consumption, etc.?
Conclusion
In making decisions to innovate and change, it is suggested that the Assembly recognises that
there are no ‘right’ answers but recognises that in accepting and including different perspectives,
solutions can be found that can be made to work. In prioritising the actions to be taken it is
suggested that there is a focus on helping those most at risk of being ‘casualties’ of the credit
crunch, who may then struggle to meet their most basic needs. In aspiring to frame the future of
Wiltshire, ‘sustainability’ is a key concept. Whilst that is the centrepiece of the current Wiltshire
Community Strategy, now is the time to take the opportunity afforded by adversity to support and
encourage new sustainable businesses and business models, whilst encouraging individuals to
take responsibility for pursuing more sustainable lifestyles. 62 Chapter 10
A Menu of Actions
The options for action set out below have been generated by GWE’s research, ‘good practice’
recommendations from across the country and also from ideas generated by those who have
participated in the project to date. They are grouped under the main headings of Business and the
Economy and then Social Impacts for ease of reference but there linkages across those
categories.
Many of these actions can be undertaken by individual organisations and can be overseen by the
Wiltshire Strategic Economic Partnership (WSEP) and the Resilient Communities Partnership
(RCP). They will require prioritisation in the use of public resources both to consider the relative
potential benefits of different measures but also the opportunity cost of investing in one measure
as opposed to another. Many actions can also be supported at Community Area level. Set out in
Chapter 12 is an approach to create an agenda for local Area Boards in relation to the ‘credit
crunch’ impacts in their area.
A number of initiatives have been identified below in green as proposals for consideration by the
Wiltshire Assembly where they involve significant developments, cross-partnership working and
require investment to be successful. The details of those proposals are expanded upon in Chapter
11.
BUSINESS and the ECONOMY: POTENTIAL ACTIONS
1
Support the Cash Flow of Smaller Business and Voluntary Sector Organisations
Issue: The major effect of the credit crunch on businesses is pressure on cash flow and a shortage
of working capital. A lack of cash can cause profitable businesses to close. Larger companies are
able to use their strong purchasing positions to insulate their cash position to some degree – that is
far less easy for small and micro businesses. A similar pressure on cash exists for some
organisations in the voluntary sector.
Many public sector organisations operate with positive cash balances. Interest rates are now so
low that there is little loss of interest if payments to suppliers are paid quickly.
Proposals:
1.1
The Wiltshire Public Service Board (WPSB) member organisations and other public sector
agencies should pay suppliers promptly, in accordance with the terms of the supply and, if
possible, earlier for smaller business and the voluntary sector with a target of 10 working
days.
1.2
WPSB members should secure agreements from their large (Tier 1) suppliers to put in
place similar practices for the onward payment of their Tier 2 and Tier 3 suppliers. When
contracts are let or renewed they should stipulate these requirements contractually.
2
Provide Emergency Support for Small and Micro Businesses
Issue: The owners of small businesses are often unaware of the potential help available to them.
Many business owners have never had to manage their business in a downturn before. There is no
63 financial support to help them access specialist professional expertise when it is most critically and
urgently needed. It is important to minimise unnecessary casualties of the recession, if possible,
especially where the businesses are potentially viable and sustainable with the right guidance and
action.
Proposal: The Wiltshire Assembly should support the Wiltshire Strategic Economic Partnership
(WSEP) and its key partners to:
2.1
2.2
2.3
3
Establish a Wiltshire Business Support Service with a single telephone point of contact
Create a new ‘Emergency Support Scheme’ for small and micro businesses, who urgently
need specialist professional advice to ensure the future of their business
Promote the support service and the new fund with ‘Don’t lose your business’ campaign (or
similar).
Work to Reduce Business’s Costs
Issue: To survive the recession when their income is reducing, business owners have to review all
of their costs. If public sector organisations can avoid increased charges and even reduce them –
every little will help and would be assisted by a low inflation, even deflation, in many costs. Whilst
decisions have been taken for 2009-10 financial year, planning should begin early to achieve this
for 2010-11. If there are opportunities to make changes mid-year, those should also be sought.
Proposals: Wiltshire Council should:
3.1
Market existing business rate reliefs to business - small businesses may be eligible for rate
relief, hardship relief and/or rural business relief. Research suggests that approximately
one-third of eligible businesses have not taken up their entitlement – they should do now.
(N.B. Wiltshire Council is already taking action on this.)
3.2
Review Business Rate credit control procedures and introduce payment plans, as a stage
before bailiff actions, to support businesses, where possible and appropriate.
3.3
Review Business Rate policies and introduce improved and consistent policies for small
business rate relief, hardship relief and rural business relief for 2010-11.
3.4
Lobby MPs on behalf of Wiltshire businesses regarding the Treasury’s proposed business
rates increase of 5% due to start in April 2009 and re increases in 2010-11.
3.5
Examine the scope for rent relief or rent holidays on Council-owned units for viable
businesses.
3.6
Seek to maintain fees and charges at their current levels and reduce them, if possible,
when preparing the budget for 2010-11.
4
Help Wiltshire’s Small Businesses to Gain New Contracts
Issue: Wiltshire businesses need to combat the recession by gaining new business. The public
sector can help by ensuring that opportunities are well advertised and that unnecessary barriers to
success in competitive tendering are removed. Issues of sustainability should also be considered
strongly in the setting of purchasing criteria. Private sector businesses could also support this
approach.
Proposals:
4.1
All WPSB members should place tenders for contracts with them on the ‘Buy Wiltshire’
website. The facility should be promoted to larger Wiltshire private sector businesses also.
4.2
The ‘Buy Wiltshire’ website should be improved and marketed strongly to increase the
awareness of its potential and the opportunities available to Wiltshire businesses.
64 4.3
4.4
4.5
4.6
4.7
4.8
5
WPSB members should review their purchasing criteria to introduce sustainability criteria
into purchasing decisions that reduce carbon emissions, traffic congestion etc.
WPSB members should review their procurement processes to ensure that they are
proportionate and do not act as a barrier to bidding by small businesses.
WPSB members should assess the potential impact of ‘contract concentration’ on the local
business community and supply chain, as part of their purchasing strategies. (N.B.
‘Contract concentration’ is where contracts that were previously let in smaller volumes to a
number of suppliers are brought together into one much larger contract – the aim is
naturally to try and achieve better prices by offering the successful supplier greater volumes
and so achieve economies of scale; it also reduces transaction volumes and costs. A
common effect is to squeeze out smaller, local suppliers in favour of larger national or
multinational companies.)
They should support the creation of ‘purchasing consortia’ to assist the resilience and
diversity of their supply chain. (N.B. A response to the dangers of ‘contract concentration’ is
where small suppliers join together in a consortium, on a geographical or sectoral basis, to
provide a large organisation with a single ‘supplier’ but sourced by a number of smaller
partners.)
Where very large contracts are let, identify the successful supplier firms and promote subcontracting opportunities through the ‘Buy Wiltshire’ website.
Increase the current 14% of Council procurement budget spent with SMEs and extend that
local procurement emphasis to WPSB partners.
Help Wiltshire Businesses to Access National and Regional Support Measures
Issue: Many small businesses are unaware of potential sources of funding and other assistance
available to them. If they are aware they are often discouraged from applying by the bureaucracy
and complexity of the application process.
Proposals: Through the Wiltshire Business Support Service proposed in 2.1 above:
5.1
Assist Wiltshire businesses to take advantage of Government support set out at
www.businesslink.gov.uk/realhelp/finance. The key measures to support SMEs (Small and
Medium Sized Enterprises) include:
• A Working Capital Scheme for short term bank lending to companies with a turnover of
up to £500m
• An Enterprise Finance Guarantee Scheme (the Loan Guarantee Fund, available
through high street banks,) securing additional bank loans to small firms with a
turnover of up to £25m (will enable firms to take out loans to convert existing overdrafts
into loans to enable businesses to free up their current overdraft facilities)
• A £75m Capital for Enterprise Fund (£50m from Government augmented by £25m from
the banks) to invest in small businesses which are struggling to get equity. The Fund
will provide long-term capital to businesses which have exhausted traditional forms of
finance.
5.2
Assist Wiltshire businesses to access the South West Regional Development Agency’s
(SWRDA’s) support measures. These include:
• A new Business Loan Fund for ambitious firms with viable business plans which are
unable get support from commercial banks or private investors. Loans of up to
£250,000 will be available early 2009.
• A Grant for Research and Development over 3 years. Businesses can apply for
between £5,000 and £500,000 depending on the type of project.
• Loans of up to £50,000 from Community Finance Initiatives (CFI).
65 •
Support and finance for land-based businesses (EU-funded) is also available through
the Rural Development Programme for England, administered by SWRDA and the
Rural Enterprise Gateway.
5.3
Market the opportunities strongly locally in Wiltshire.
6
Create A New Source of Finance for Micro Businesses and Start Ups
Issue: A lack of access to reasonably priced credit is a barrier to some people who are looking to
start up a business and to micro businesses that are looking to expand and grow. The mainstream
banks are now refusing loans and overdraft facilities to business propositions that have some risk
but also potential. Some businesses have resorted to obtaining very expensive credit from
secondary finance institutions that has increase the risks to their business substantially. Whilst the
major banks may ease their stance somewhat over time, there is a strong view that Wiltshire
should be seeking to establish some alternative sources of finance, as exist in other parts of the
UK and the South West.
Proposal: The Wiltshire Assembly should instigate a project group to help small businesses get
better access to finance through a Community Development Finance Initiative. This would consider
the options available but specifically the potential for creating a Wiltshire Community Reinvestment
Trust which could provide finance for small businesses, social enterprises and charities.
7
Ensure Easy Access to Available Property Information
Issue: Potential new business ‘start-ups’ and larger investors need current and accessible
information on potential property and employment land that might be available. Property agents
and developers need trend information on enquiries to identify types of demand and gaps in
available workspace.
Proposal: The ‘Invest in Wiltshire’ website holds a commercial property database. Ensure that it is
kept up-to-date and is able to support actions re town centre street scene initiatives.
8
Support Economic Recovery with a rounded Assistance Package for new ‘Start – Up’
Businesses
Issue: The economic recovery needs people to establish new businesses. When individuals are
made redundant, an option for them is to start their own business, often using some of the
redundancy payment they have received. A focus on creating businesses that are sustainable in
terms of the business skills of the owner(s), the financial model for the business and the
product/services and operations of the business demand stronger approaches to support.
Proposal: The Wiltshire Assembly should ensure that the proposed new Wiltshire Business
Support Service is able to provide a strengthened support for new business start-ups by offering a
complete support package:
•
•
•
•
easy access to the provision of advice and guidance and training
easy access to property information
the creation of a new start-up grant scheme, with a particular emphasis on ‘sustainable’
businesses
the provision of ongoing support, networking and mentoring support.
66 9
Speed Up the Processing of Business Development Planning Applications
Issue: To support the process of economic recovery it is vital that potential new businesses and
business investment are not delayed or lost because of unnecessary difficulties in the processing
of planning applications. There has been criticism of the current planning process, especially in
West Wiltshire. Strong representations have been made that £millions of major development
investment in the area had been lost because of a lack of priority, urgency and professionalism in
the planning process. There was a perception of a negative approach to ‘business applications’ - a
sense that the planning process was about how an application might be refused, rather than
supported and improved so that it could be approved. At the same time, it is clear that planning
applications are not always correctly completed and that essential information is not always quickly
provided when requested.
Response: Wiltshire Council is establishing a new planning process and teams, as part of the
creation of the unified Council. The Service Director is fully aware of these criticisms and is working
to address them. The plans to create a process that will deal centrally with major planning
applications are welcome.
Proposals:
9.1
That a strong liaison mechanism is set up between Economic Partnership Managers and
the Planning Department in the new Council, so that issues in the processing of planning
applications can be addressed quickly. Economic Partnership Managers can carry out a
critical liaison role between planners and applicants.
9.2
That pre-application meetings between potential applicants and planning officers are given
priority as a part of the process, so that applicants are given clear guidance on the potential
acceptability of an application and the issues that need to be addressed to assist the
application.
9.3
S106 agreements should be negotiated to support the main requirements of local planning
policy re affordable housing and other contributions. However, there needs to be an
assessment of the affordability of the whole proposal and an avoidance of excessive minor
conditions.
10
Promote Potential Economic Growth Sectors such as Tourism and the Food and
Drink Industry
Issue: There are sectors of the economy that can perform well in the current climate and sustain
economic activity. Tourism is worth £726 million of ‘external’ money to the Wiltshire economy
(South West Tourism, 2006) and has a high multiplier effect. The weakening of the pound against
the euro supports UK tourism. Wiltshire must seek to increase its share of a potential growth
market. Food and Drink should be a key growth and priority sector, alongside tourism, as rising
import prices, cheaper exports and the fact that food is a staple product support its potential for
growth and profitability.
Proposals:
10.1 Invest in tourism and support the continued development of the new Wiltshire Destination
Management Partnership and the ‘Visit Wiltshire’ brand. Enhance and maintain the
Wiltshire Public Product, through further investment and development where possible.
10.2 Ongoing promotion and support of local food and drink companies to help boost tourism
and the local economy.
67 11
Fast-Track New Investment Opportunities
Issue: The recession means that there is less economic activity. The construction industry was
one of the first hit by the economic downturn, followed by suppliers of building materials and others
in that supply chain. There are a range of investment projects that are at various stages of
development but there is the potential to move forward some activity quickly if barriers can be
overcome. Leverage of even a small number of projects can start to build confidence as well as
providing an economic stimulus.
Proposals:
Wiltshire Council should:
11.1 Identify the barriers in any ‘stalled’ development projects and agree urgent actions to
address them.
11.2 Associated with the above, raise again with Government the scope for local authorities to
provide short-term support to development projects.
11.3 Press the case with Government, SWRDA, First Great Western and other for improved
more sustainable rail services for Wiltshire.
11.4 Apply to the Housing and Communities Agency for funding to purchase or fund the building
of social housing in order to both stimulate construction activity and reduce the housing
waiting list.
11.5 Support the allocation of pockets of Council owned land for community enterprises,
allotments and similar small scale ventures.
12
Sustain the Retail ‘Street Scene’
Issue: The retail sector has suffered due to the reduction in consumer spending. Wiltshire has
many market towns where there are increased numbers of empty shops. Retailers are concerned
about the impact on remaining shops and the potential difficulty of re-letting; the police are
concerned about the potential for increased levels of litter, graffiti and damage; individuals and
communities are concerned about the potential for depressing town centres.
Proposal: The Wiltshire Assembly should support a programme whereby actions should be
instigated by town and parish councils, with the support of the Community Area Boards,
Community Area Partnerships and the local Chambers of Commerce to improve town centre
‘street scenes’:
12.1
12.2
12.3
Ensure the active use of vacant retail space across Wiltshire to sustain the street scene,
encourage ‘footfall’ and future re-letting. Ideas being considered locally and nationally
include use for new credit union branches, the recreation of local markets; displays by local
artists; use by schools/college students for displays; use by public services for information
campaigns and consultation activities etc.
Prevent decay and damage. If active use is not possible, display attractive posters. Ensure
that there is a rapid response to graffiti, minor damage, excessive litter and so on and
encourage communities to take more responsibility.
All parties should operate flexibly and speedily in relation to ‘appropriate’ planning
applications for change of use within the planning rules.
68 13
Provide New Opportunities for Wiltshire’s People to Develop their Skills
Issue: The major impact on Wiltshire residents is loss of employment. A major concern is the loss
of opportunities for young people to obtain their first job upon leaving, school, college or university
– with the danger of creating a ‘lost’ generation – those who, when jobs become more available
again are competing with a new round of fresh ‘leavers’, having lost 1 or 2 years of potential
experience and growth. There are also older adults who want to use their skills profitably and many
people who need education and training, especially in lifestyle and sustainability skills that will be
critical in the years to come.
Proposals:
There are many actions that need to be undertaken in Wiltshire that can be summarised as follows:
13.1 Emergency response - SWRDA Wiltshire Area Taskforce and the JobcentrePlus Rapid
Response Service (which offers support to every employer with 20 or more redundancies
and in local communities who have been disproportionately affected by multiple smaller
scale redundancies) need to be supported by WSEP members and others, as required.
13.2 Skills programmes for the unemployed - the projected increase in unemployment in
Wiltshire means that some 3,500-4,000 people may have the opportunity to improve their
skills. Work in partnership with LSC and JobcentrePlus to devise local initiatives to retrain
and upskill.
Support local colleges and training providers to deliver those new
programmes.
13.3 With the backing of the Wiltshire Assembly provide new opportunities for developing the
potential of Wiltshire’s young people. The Council is one of the largest employers in
Wiltshire. It should be supported to create a new, small Council team dedicated specifically
to managing and overseeing new apprenticeship, internship, entry to employment, work
placement and volunteering opportunities. It should explore external funding from LSC and
others to support the initiative. Link with WPSB and private sector re apprenticeship and
internship opportunities. Link with the voluntary sector re volunteering.
13.4 Community learning - the Council, College and the voluntary sector should offer more
courses targeted at helping residents to lead sustainable lifestyles and developing the skills
to do so. Campaigns should encourage cycling, walking, car sharing, public transport,
recycling and neighbourliness and support/implement energy advice schemes and benefits
education. ESF funding should be explored to take such programmes to the more deprived
areas of Wiltshire as identified through the Council’s Mosaic system. (N.B. Mosaic is a
system that analyses population households in various ways using nationally available
data. It can support the targeting of activity to appropriate groups.)
13.5 Develop financial literacy, debt awareness, business startup and allied programmes for use
in schools and other education settings.
13.6 Seek ESF funding support to cover any gaps which exist in helping cover the cost of
childcare or other barriers, such as public transport.
13.7 Consider new initiatives with private sector partners to improve the opportunities for job
matching and volunteer matching.
69 SOCIAL IMPACTS: POTENTIAL ACTIONS
14
Strengthen Emergency Support for Individuals and Families
Issue: The numbers of people who need help and advice to tackle the difficulties caused for them
by the recession are increasing rapidly. Existing services are already under strain. Investment is
needed to ensure that residents are made aware of the assistance available to them, can access
that help easily, are properly assessed and referred to those who can best help them.
Proposals:
The Wiltshire Assembly should support measures to strengthen current arrangements to create a
high profile, high quality, accessible Wiltshire Citizens’ Advice Service:
14.1
14.2
14.3
14.4
15
Build awareness of the need for individuals and families to seek advice early through strong
message campaigns such as ‘Don’t Drown in Debt’, ‘Don’t Lose your Home’ and so on.
Improve access to quality assured, independent advice and help by promoting an
independent voluntary sector service as the ‘first contact point - ‘the place to go, the phone
to ring, the website to access’ – create brand awareness of a service for residents that, in
principle, is analogous to Businesslink for the business sector.
Invest in the capacity of that service to provide advice as demand increases.
Increase the capacity of that service to refer people on to other sources of support in the
voluntary and statutory sectors, as their needs require.
Help Households to Increase their Income and Manage their Debts
Issue: The major issue caused by the recession is loss of employment and/or loss of income that
has a severe effect on the finances of household with high levels of personal debt and expenditure.
Those people are the main initial ‘casualties’ who increase their vulnerability by tuning to ‘doorstep
lenders’ and other forms of expensive credit, which increase the likelihood of creditor actions
leading potentially to bankruptcy, repossessions/evictions and related problems.
Proposals: A number of different but related actions include:
15.1
15.2
15.3
Campaign to increase the take-up of benefit entitlements from a wide range of sources
including Wiltshire Council, the Department of Work and Pensions (DWP), Her Majesty’s
Revenue and Customs (HMRC).
Launch a major anti-debt programme with the advice service in 15 above, Wiltshire Money,
education services and the media. This will involve work to highlight the problems caused
by excessive debt, the provision of advice and assistance to those in need, together with
financial literacy programmes for young people and adults.
Raise awareness of and provide access to new Government schemes to assist people in
difficulty e.g. the Mortgage Rescue Scheme.
70 16
Develop a strong, well supported Wiltshire Credit Union
Issue: In support of the activities in 16 above, it is critical to provide an alternative form of credit
that is offered ethically, locally and linked to debt advice and guidance services. There are a
number of routes for people seeking such finance at present – Wiltshire Money Line through
Community First, which has made 224 loans in 2 1/2 years; four credit unions with 21 outlets around
the county – they have been run on a district basis by volunteers and have currently 1,100
members. In response to the recession, District Councils have provided funding and other support
to the credit unions. They have been discussing merger to strengthen their activities.
Proposals: The Wiltshire Assembly should grasp the problem of debt for many of Wiltshire’s
people and seek to achieve a ‘step change’ in the provision of a strong, locally based form of
alternative credit for those who are excluded from ‘mainstream’ financial services. It should aspire
to create a credit union that over time can build the reputation and presence of those that operate
in metropolitan areas and countries such as Ireland. This will require investment of finance and
expertise to support the four existing credit unions to become a single credit union for Wiltshire.
This Wiltshire Credit Union should sustain a strong local presence but have the scale and expertise
to offer well developed savings and loans services to residents. It should also be promoted to staff
and customers by Assembly members.
17
Help Households with Fuel Costs and Energy Conservation
Issue: Fuel costs are a major part of many household budgets. They have increased rapidly over
the past 9 months. People need help to manage those costs now and in the future. In the interests
of sustainability, energy consumption needs to be reduced by conservation and other measures.
Proposal:
17.1
17.2
17.3
18
Campaign about the level of fuel tariffs, especially for older and vulnerable people; increase
awareness of the tariff savings available; and support switching as appropriate.
Campaign about the energy conservation schemes and assistance available from the
Council and voluntary sector
Provide an emergency fund to enable the poorest to get help from Council energy schemes
without having to make a contribution.
Support relevant Voluntary Services as Personal and Family Problems Increase
Issue: At this early stage of the recession there is little evidence in Wiltshire of some of the social
impacts that are being seen elsewhere in the country and have been seen in previous
recessions. It would be imprudent to assume those impacts will not be seen within the next
12 months. Voluntary sector agencies will then come under considerable pressure to
expand their capacity, without necessarily having the resources to do so.
Proposal:
18.1
18.2
Invest in relevant voluntary sector agencies as demand increases for counselling and
domestic violence, mental health and allied problems increase. The main agencies whose
resources may not be able to cope include Relate, Splitz, and Victim Support.
Monitor the needs for support of older people in rural areas
71 19
Review the Impact of ‘One’ Council Services on Vulnerable Households
Issue: The new Wiltshire Council, together with those agencies that deliver its services, will have
many different contacts with Wiltshire residents, particularly those who are in vulnerable
households. It will need to consider those interactions and how they are best managed to avoid
unintended consequences.
Proposal:
Develop over time a ‘whole Council’ approach to the management of debts due from vulnerable
households.
20 Build Confidence in Wiltshire, working with the local media
Issue: The local business community has emphasised the importance of sentiment. Economists
confirm its importance in affecting the way individuals made economic decisions. Social
psychologists have studied the increased levels of anxiety, fear and stress caused by a recession
and continued negative reporting. The people of Wiltshire have demonstrated their concerns and
fears about this recession. It will benefit everyone if there is a sense that we do not have to be
‘victims’ of forces we cannot control – that we can take positive action in the face of problems.
Proposals: The Wiltshire Assembly should lead a campaign to build confidence. A significant effort
is needed by all parties to alter the way in which the recession is considered and reported. There
are problems as a result of this major economic adjustment and those problems cause real
hardship to individuals and families. However, there are reasons for optimism about the ability of
Wiltshire to weather the worst of the recession. The economy will improve and grow again. There
is an opportunity to create a healthier, more sustainable future. The more positive Wiltshire
residents are about those things, the more quickly will the local economy improve.
The local media will be critical in helping to build confidence in the local economy and the work and
actions of the Assembly and the Council. They can promote good news and successes, run ‘buy
local’ campaigns and information campaigns and support many of the actions proposed in various
ways.
72 Chapter 11
Proposals for the Wiltshire Assembly
Introduction
This chapter presents a set of potential proposals for debate and exploration by the Assembly. It
takes key issues and ideas that have emerged from the impact study that require a partnership
response and investment to deliver practical actions successfully. It creates a set of building blocks
that, in addition to steps taken by individual organisations, combine to provide a strong, local
response to the impacts of the credit crunch in Wiltshire.
The proposals are challenging in that:
•
They do require new ways of thinking, coming together and working together by different
organisations
•
They do require investment of time, energy and money to put in place
•
They do require real commitment and support, if they are to be successful.
They seek to address some key insights from the impact study that are important to Wiltshire and
its residents, businesses and communities:
•
Build confidence to reduce fear, worry and negativity and support a recovery process
•
Try to prevent unnecessary business failures amongst Wiltshire’s vital micro businesses by
investing in greater support for them
•
Helping individuals and families by increasing their awareness of where to get help, their
access to it and the capacity of advice services to respond
•
Build for the future by:
o
developing stronger, local, community based sources of credit and investment
o
providing new opportunities to develop the talent of young people and use the skills
and experience of adults
o
maintaining and breathing new life into town centres.
73 The schematic below outlines the building blocks of the proposals. The descriptions that follow
provide some detail about the proposals.
Wiltshire’s People, Businesses and Communities
The Building Confidence Programme
Wiltshire Business Support Service
•
Emergency Support Scheme
• Start Up Scheme
Wiltshire Citizens’ Advice Service
•
Citizens’ Support Fund
Wiltshire Community Finance Initiative
• Credit union
• Community Reinvestment Trust
Wiltshire ‘Potential’Programme
Wiltshire Street Scene Programme
74 The Building Blocks
A
The Building Confidence Programme
Aim:
To change the tenor of the language about the credit crunch in Wiltshire to one that:
• is concerned about the problems but optimistic about our ability to overcome them and
sees them as an opportunity to build a better society out of adversity
• does not scare and alarm unnecessarily but educates and provides a balanced perspective
• helps people to become aware of the assistance available to them
• celebrates the successes of local businesses and local people and community action as
they meet the challenges
• highlights good news as recovery starts
• seeks to improve the lives of residents and to support sustainable activities and lifestyles.
How: By a concerted communications campaign run and sustained over the next 12 months.
It is fair to say that local, as opposed to national media, has been much more supportive generally
in its reporting of the credit crunch. Some have already run ‘buy local’ campaigns and information
articles about ‘managing finance’, ‘healthy living’ and so on. Others regularly feature local
businesses. However, the key is what appears on the front page headlines and the billboards, the
radio trailers and the news introductions to set the tone and help change the perceptions of the
population.
The media can only support this approach if there is action and activity to report on that will be of
interest to its audience. It is essential for success that Wiltshire Assembly partners ‘sign-up’ to
make this communications campaign a priority. It is from the organisations and their members that
stories, good news and information must come. Elsewhere in this report that are many ideas for
campaigns that can be run that would provide plenty of material.
The campaign should be supported by a web presence that provides information, access for
people and business to the support services available and scope for
Who: The Assembly should agree the establishment a ‘campaign team’ led by Wiltshire Council
Communications Team that includes, representatives of the media, WACC and other committed
partners to prepare the campaigns, link into networks and act as the channel for stories. The
‘campaign team’ should report to the Wiltshire Co-ordinating Group on its work.
B
The Wiltshire Business Support Service
Aims:
To establish a service for businesses in Wiltshire that brings together the private and public sector
to provide a local, personal service for Wiltshire businesses, in addition to the telephone helpline
and websites that are available currently.
To equip that service with funding to create two new schemes to assist the retention and creation
of sustainable micro businesses.
75 Who: It is suggested that the service is overseen by the new Wiltshire Council Economic
Development Team. It will be delivered by Business Link, with the support of GWE Business West,
and promoted and supported by the Wessex Association of Chambers of Commerce (WACC). It
will report to the Wiltshire Strategic Economic Partnership (WSEP).
How: There is a need to ensure that business awareness of the support that can be provided is
increased substantially through better partnership working:
•
•
•
WACC has a proven capability to promote services to the business community and can,
through its chambers and members, provide venues for services to be delivered. It would
benefit from increased membership. As the major private sector partner it will run a ‘hotline’
for the business community as a local Wiltshire access to this service and supplement the
national Business Link offer.
Business Link and GWE have a suite of services and is the gateway to a wide range of
financial, innovation and other sources of expertise and help. It is active in Wiltshire but its
profile needs to be strengthened and its knowledge of business needs in Wiltshire could be
better shared.
Wiltshire Council is creating a new Economic Development Team with a business-led
approach to the way it operates. It is seeking to ensure that its staff are closely involved
with the day-to-day business life of Wiltshire, so that future plans and strategies are well
founded. It too can promote business support services and activities through its own
channels and website. It should fund additional activity by Business Link in Wiltshire but
expect clear feedback in the form of activity reporting and business intelligence.
The added value of better co-operative working should be increased by the creation of two
schemes to support the small business sector in Wiltshire, which directly address two issues from
the impact study:
B1
Wiltshire Emergency Business Support Scheme
Issue: A key task in the current downturn is to try and reduce the number of small businesses that
close with a consequent range of losses and costs to the public purse, as well as damage to the
individuals and families affected.
An insight from the business community is that there is a problem where small business owners do
not access the expertise they need to enable their business to survive partly because of a fear of
the cost. There is no current form of financial support available to address this.
Proposal: The Assembly considers the establishment of an ‘Emergency Business Support
Scheme’ to assist rapid access to the use of specialist professional expertise in situations where a
small or micro business is unable to afford the initial cost.
Criteria: An outline is offered here but the detail would need to be worked through by the
members of the Wiltshire Business Support Service:
•
The business would normally be a small micro business i.e. employing fewer than 10 FTE
staff
•
Access to the fund would be via a Business Link advisor who would have carried out a
diagnostic assessment of the business and determined that professional help was needed
and that affordability was an issue. The Advisor would normally be recommending the
professionals to be selected from the Business Link approved list
76 •
The fund would be managed by the Wiltshire Council Economic Development Team. There
would be an expectation of a standard daily rate with a cap on the total amount of support
per business
•
There would be an expectation that the business was capable of being saved and that it
should be saved i.e. that its business model was financially sustainable and that its
products/services and markets supported a sustainable economy.
B2
Wiltshire ‘Start-Up’ Support Scheme
Issue: Part of the process of regeneration is the creation of new small businesses. When
unemployment strikes one of the options for individuals is to start their own business. Some
training to support start-ups is available from Business Link. There was a strong view from the
business community of the need to ensure that:
•
potential business owners understood the challenges of running their own business and
had the capacity to do so
•
greater assistance should be provided so that new businesses can develop a sustainable
financial model for products or services that support a sustainable economy.
Proposal: the Assembly considers the establishment of a ‘Wiltshire Start-Up Support Scheme’ to
assist the formation of new sustainable businesses in Wiltshire that provides a rounded package
including the provision of advice and guidance, training, funding, property advice and ongoing
mentoring, networking and support.
Criteria: an outline is offered but the detail would need to be worked through by the members of
the Wiltshire Business Support Service:
•
The business would normally be a small start-up with relatively low levels of capital
•
Access to the fund would be via a Business Link advisor who would have carried out a
diagnostic assessment of the business proposition and agreed that it should be supported.
The applicant must do the Business Link start-up programme and any further training
recommended by the Business Link advisor.
•
The fund would be managed by the Wiltshire Council Economic Development Team. There
would be a cap on the total amount of support per business
•
There would be an expectation that the business had a business plan that was financially
sustainable and that its products/services and markets supported a sustainable economy.
C
The Wiltshire Citizens’ Advice Service
Aims:
To build upon current arrangements to create a stronger support service for individuals and
families in Wiltshire who are affected adversely by the credit crunch and economic downturn. As a
single service it would be more easily promoted to Wiltshire residents, it would operate to common,
high quality, accredited standards and act as a gateway to advice agencies, information sources
and, if appropriate, other voluntary sector and statutory services.
77 To make funding available to the Service to assist it to respond flexibly to the needs of residents
during the period of the downturn by the creation of a ‘Citizens’ Support Fund’.
Who:
It is suggested that the service works with the Wiltshire Council Community Services Department
who would manage the fund.
The service would consist of the partners in the Wiltshire Advice Partnership:
•
•
•
•
•
•
•
•
•
The four Citizens Advice Bureaux
Sarsen Housing Association
Alabare Christian Care Centre
Will Rolt Solicitors
Shearer & Co Solicitors
Sylvester Mackett Solicitors
Age Concern Wiltshire
Age Concern Salisbury
Action for Blind
How: The proposal is intended to increase awareness in Wiltshire of the support available and
make it easier for residents in need to access the advice and support they need by:
• creating a single brand for advice support marketed by Wiltshire Council, the Advice
Partnership, other partners and the media
• establishing a single telephone contact line with staff able to carry out first line advice and
refer appropriately
• allocating finance to enable Wiltshire Council Community Services Department to respond
flexibly to increase the capacity of the Advice Partnership to meet the needs of Wiltshire
residents during the downturn. It may also support other key voluntary sector providers
where there is evidence of the downturn stretching their capacity to respond adequately.
Progress on the initiative could be reported to the Resilient Communities Partnership.
D
The Wiltshire Community Finance Initiative
Preamble: The major consequence of the credit crunch is obvious – the supply of credit finance
has been substantially curtailed. The major finance institutions are in crisis. It is to be hoped that
government action to support those institutions will result in a return to sensible levels of lending in
the near future. There is no doubt, however, that the criteria the banks will apply to borrowing
requests will be much tighter than they were and that the cost of such borrowing will be higher.
There are already many people and small businesses owners who are unable to obtain finance
from mainstream finance institutions – the financially excluded – that number will inevitably
increase in the years to come. Many of them are forced into the hands of ‘doorstep lenders’,
money shops and other providers of credit at extortionate rates, which in turn generates huge
demand for assistance from the Citizen’s Advice Bureaux and others.
In Wiltshire there are four credit unions run by volunteers with support from a full-time worker from
Community First. In recent times the District Councils and Housing Associations have provide
78 additional funding to help the credit unions operate more effectively. There is an expanded
partnership, called ‘Wiltshire Money’, that has recently been launched to address issues of
financial exclusion. There appear to be no institutions that provide support to excluded small
business or social enterprises in a substantial way, although there are some schemes with a more
rural focus run by Community First.
Whilst strengthening the advice services offered to individuals and businesses can help in the short
term, those services need other sources of credit to whom they can refer clients.
Aim: To create new local arrangements for the provision of credit as a major Assembly project.
This will be a community based finance initiative that will provide savings and loan facilities to
individuals, small businesses and social enterprises in an ethical and professional way. It will link to
the advice services proposed earlier with whom education programmes can be run. It will provide
opportunities for wealthy Wiltshire sponsors to invest in support of local people and businesses
and could pilot ‘business angel’ and other forms of investment activity.
Proposals:
The Assembly considers the establishment of a group, led at the highest level, to:
D1
Wiltshire Credit Union
1.1
1.2
Support the moves already being taken to create a single Wiltshire Credit Union.
Examine rapidly credit unions in Ireland and other parts of the UK and use other ‘best
practice’ from ABCUL (The Association of British Credit Unions Ltd.) to decide what
investment is required urgently to enable the credit union to best meet the needs of
Wiltshire residents.
Generate a much higher profile for the Wiltshire Credit Union, including the creation of town
centre branches.
Promote the Credit Union to Assembly members for its staff and clients with a view to
increasing substantially its user base.
1.3
1.4
D2
Community Reinvestment Trust
Research the potential development of a Wiltshire Community Reinvestment Trust, or similar
entity, that would be set up to raise finance and make it available to support start-ups and
developing small businesses, social enterprises and charities. This would have a separate legal
identity from the credit union but could operate in partnership to generate cost effective scale and
impact in the services they provide.
Once established the Community Reinvestment Trust would look to relevant Assembly members to
promote its services as a potential investment vehicle for partners, their pensions funds and cash
rich investors, who wish to support their local community.
This major and innovative proposal for Wiltshire will take time to research, plan and implement. It
will require expertise in banking, FSA, legal and associated matters to be brought into the project
group. Advice should be sought from the Community Development Finance Association (CDFA),
the Wessex Reinvestment Trust and other similar Trusts that exist in various parts of the country.
79 E
The Wiltshire ‘Potential’ Programme
Preamble: A theme from the impact work was a concern for the prospects of young people due to
a loss of opportunities to secure employment due to the downturn. There were worries also about
the possible loss of volunteers in the voluntary sector. The timing was also quite specific.
Contributors feared:
•
the lack of jobs for school and college leavers who may want employment from
August/September 2009
•
the lack of opportunities to gain experience for young people taking a ‘gap year’
•
the lack of jobs for graduates who will be returning home to Wiltshire after finishing their
university courses in June 2009
•
the lack of opportunities for adults to develop and employ their skills helping others.
Aims:
1
To create a range of opportunities for young people to develop their education and skills
further, to gain experience that will support applications for employment in due course and to
gain skills that help to promote sustainability.
2
To provide adults with the opportunities to use their skills and experience in helping others.
This is a proposal that could engage many members of the Assembly in creatively providing new
opportunities.
Proposal: that the Assembly supports the development of a Wiltshire ‘Potential’ Programme that
will develop and offer:
•
new apprenticeship and entry to employment programmes(E2E) for 16-18 year olds
•
internships for graduates who may want to gain experience in a particular sector and
strengthen their CV prior to applying for a job
•
volunteering opportunities in the voluntary sector.
The work of this programme could be overseen by the Employment and Skills Board of WSEP.
How:
By the creation of small team in the HR function of Wiltshire Council to develop and manage these
new opportunities in collaboration with many others. This team would need to ensure:
•
Close working with the Learning and Skills Council (LSC) and the Government’s New
Apprenticeship Service (NAS) to obtain government funding for the training delivery of
apprenticeships and E2E. Note: the NAS is expected to deliver targets for increased levels of
apprenticeships in the public services and should be very supportive of this proposal.
•
Guidance from JobcentrePlus to ensure that the internship and volunteering offer did not
conflict with benefit rules and also to raise awareness of those opportunities for unemployed
adults.
•
Strong links with:
80 o
the WPSB and private sector supply chain partners to encourage apprenticeship
opportunities and internships across the public services
o
the private sector generally re internships
o
the voluntary sector and especially the Infrastructure Consortium re volunteering
opportunities
o
the advice and guidance agencies – Connexions and Next Steps
o
websites that could provide a ‘matching service’ of opportunities with those looking for
them such as the ‘Do It’ website.
Link to sustainability: there is a strong wish to see opportunities generated that will equip people
with skills that will support the sustainability agenda.
F
The Wiltshire Street Scene Programme
Aim: To involve the community in working together to sustain the town centre environments of our
market towns and so:
•
encourage residents to continue using their local town centres and support local retailers
•
maintain or improve the quality of the town centres as places for potential new businesses
to start building upon initiatives such as Chippenham’s ‘lick of paint’ idea
•
find productive uses for empty premises to support:
o
o
o
o
•
local credit union branches
new town markets for local trading
opportunities to bring public service and voluntary sector initiatives to town centres
artists, schools and colleges who wish to display their work
ensure that the street scene is well maintained and graffiti, litter, minor vandalism is
minimised.
How: By the Assembly supporting the allocation of resources to Community Area Boards to
allocate to town and parish councils to work with their Community Area Partnerships and local
Chambers of Commerce to manage this programme. This should be supported by some
professional help at Wiltshire Council to share good practice and assist with any planning and
other technical issues.
This proposal would engage the emerging Community Area Boards, town and parish councils and
other Assembly partners in positive action in their localities. It would also inform the more strategic
thinking that will be required about the future role of town centres in market towns and the
businesses and services that are sustainable there.
81 Next Steps
Introduction
The recession and its impacts will affect Wiltshire for some years. It is critical that the outcomes of
the Wiltshire Assembly’s deliberations are taken forward and acted upon. Set out below are some
thoughts on the way in which that can be managed within the structure of the Assembly and its
constituent groups and partnerships.
Ensuring Action
Following the Assembly the following implementation steps should be taken:
1
A ‘Combating the Credit Crunch Action Plan’ should be drawn up of the commitments
agreed to by the members involved. This should specify the actions agreed, milestones and
the resources allocated to support them. This should be ‘signed off’ by the Wiltshire Coordinating Group and the Wiltshire Public Services Board in relation to their respective roles
and responsibilities.
2
In relation to each action there should be a named person responsible for its progress, who
should report to one of the Wiltshire Thematic Partnerships. Overall scrutiny of the
achievement of the Action Plan should lie with the Wiltshire Coordinating Group.
3
An important task will be to engage local people’s commitment and energies in the
Assembly’s response. In drawing up the Action Plan, thought should be given to the actions
that can be can be taken locally by Community Area Boards, working with their town and
parish councils and Community Area Partnerships, to support and deliver the main
initiatives agreed. A clear example is the ‘Street Scene’ proposal but there are many others
e.g. support for the Credit Union, work with the local Chamber of Commerce on the
property database, contribute to opportunities for volunteering, internships, apprenticeships
and entry to employment schemes, work with the local media on positive stories etc. An
approach could be for WSEP and the RCP to draw up some guidance for Area Boards for
their consideration.
4
There should be regular reporting and celebrating of success to the Assembly via the
Newsletter and at Assembly events.
5
It would be helpful to have a ‘champion’ for this programme who is able to operate at a
strategic level. This may be a role that should be undertaken by a Councillor in the new
Wiltshire Council who is a member of the new Cabinet.
‘Recession Watch’
This study has been undertaken at a relatively early stage of what may be a reasonably long
recession. Some of the potential negative impacts have not yet been seen. The point at which
improvement in the economy starts to take place in the future needs to be identified. The benefits,
or otherwise, of the actions taken in Wiltshire need to be recognised and understood.
It is recommended, therefore, that some elements of the research that underpinned this report are
repeated at appropriate periods and that a limited number of indicators are monitored to identify
worsening or improvement in the impact of the recession.
82 Refreshing the Data
The following should be considered:
1
2
3
The Employment Forecasting Model developed by GWE Business West Research should
be revised and updated in the light of current unemployment data. A refresh using data up
to March 2009 would be valuable.
The WACC Survey of Wiltshire Businesses should be undertaken again, as normal, in July
2009.
The survey of Wiltshire Residents should be undertaken again by Wiltshire Council in
January 2010 to establish their views one year on and enable comparison with this year’
survey.
Monitoring the Recession
It is suggested that the following data are monitored and reported on the timescales described.
They are not comprehensive but are the timeliest statistics available to get an early indication of
the direction of the recession.
Economic Indicators
JSA Claimant Count and JobcentrePlus Vacancy Levels
Published monthly on NOMIS and within three weeks of the month end.
Jul‐
08
Aug‐
08
Sep‐
08
Oct‐
08
Nov‐
08
Dec‐
08 JSA Claimants 2529 2350 2890 3092
3364
3460
3647
4127
4578 5250 Vacancies 2577 1615 2264 2304
2123
1760
2022
1899
1264 1244 Jun‐
07 Jan‐
08 Jun‐
08 Jan‐
09 83 Social Impact Indicators
It is more challenging to ascertain other social impacts on a timely basis. In order to make some
ongoing assessments, however, it is recommended that relevant agencies are asked to supply the
following data. It may be that the Housing Partnership and the Community Safety Partnership will
be able to provide some data on a monthly basis shortly:
Monthly
1
Social Policy Issues Data from the Wiltshire CABx for:
•
•
•
•
•
2
Debt
Benefits
Employment
Housing
Relationships
NEETs figures from the Connexions Service
Quarterly
1
Housing Issues:
•
•
•
2
Mortgage Possession Claims issued by Ministry of Justice
Landlord Possession Claims issued by Ministry of Justice
Homeless decisions – Wiltshire Council
Crime Statistics from Wiltshire Police for:
•
•
•
•
•
•
•
•
•
•
•
All recorded crime
Shoplifting
Theft and handling
Arson
Theft of motor vehicle
Violent crime
Criminal damage
Non-dwelling burglary
Dwelling burglary
Domestic incident
Fraud
‘Recession Watch’ monitoring could be managed by the W Strategic Economic Partnership and the
Resilient Community Partnership and reported to the Co-ordinating Group members on a monthly
basis, along with periodic progress reports on the Action Plan.
____________________________________________________________________________
84 Acknowledgements
This report is the work of many people who have contributed by responding to questionnaires,
providing data, attending meetings, suggesting avenues to explore and pointing me to research
and the work of others. There are far too many to include here and I apologise to those I omit.
However, I do wish to recognise the support given by:
• Dr Keith Robinson and Alistair Cunningham of Wiltshire County Council who invited me to
lead this work, agreed the project brief and have provided guidance and information at
various stages.
•
Jim Plunkett-Cole of GWE Business West whose two economic analysis reports have
brought considerable expertise and rigour to this work.
•
Michael Williams MBE, Chief Executive of Wessex Association of Chambers of Commerce
(WACC) and his colleagues who managed the business survey and the events used to
obtain the views of business.
•
Sarah Cardy, Chief Executive of West Wiltshire Citizens Advice Bureau and her CAB
colleagues, together with Phillipa Read of Community First, who supported the voluntary
sector survey and a range of activities to generate evidence of the social impacts of the
credit crunch; Graham Hogg of Wiltshire County Council for the information on housing;
Jerry Howson of Wiltshire Police who provided the data and analysis on crime in Wiltshire.
•
Len Turner of the Wiltshire Forum of Community Area Partnerships (WFCAP) and his
colleagues who organised the community area surveys.
•
Phil Morgan, Jackie Guinness and their colleagues who devised and delivered the survey
of Wiltshire residents.
• Kathy Geraghty of West Wiltshire District Council who ensured that I received current
research and other reports.
• Councillors Fleur de Rhe Phillippe and Dick Tonge who were both supportive and
challenging members of my advisory group.
• Peter Beech-Allen, Caroline Lewis, Anna Garner and Jill Annal - members of the WSEP
Executive Group, who also provided information, help and assistance at various stages.
• Finally, my thanks are due to Archdeacon John Wraw, Chair of the Wiltshire Assembly for
his support and guidance; David Maynard of Wiltshire County Council for his prompts to
relevant reports and websites and, along with his colleague, Liz Richardson, his assistance
in disseminating this report and the organisation of the Assembly event.
This report and the research activities supporting it were funded by Wiltshire County Council with
contributions from Wiltshire Strategic Economic Partnership, West Wiltshire District Council,
Northern Arc (Business Link) and Salisbury District Council
85 Glossary
ASB
GDP
HCA
IVA
JSA
LSC
MBS
NEETs
SMEs
Sub-prime
SWRDA
WACC
anti-social behaviour
gross domestic product – a measure of the value of the goods and services produce
by an economy over a period
the Housing and Communities Agency: launched in December 2008 this new
government agency brings housing and regeneration activities under one
organisation; it combines the functions formerly run by English Partnerships, the
investment functions of the Housing Corporation, the Academy for Sustainable
Communities, and key housing and regeneration programmes previously delivered
by the Department for Communities and Local Government, including the Thames
Gateway, Housing Market Renewal, Decent Homes.
Individual Voluntary Arrangement: an alternative to bankruptcy an IVA is an
arrangement between the debtor and his/her creditors to repay a percentage of the
debt over the life of the IVA, usually 5 years.
Job Seeker’s Allowance: this is the main government benefit for people who are not
in employment but are looking for work
the Learning and Skills Council: the government agency responsible for managing
and funding post-compulsory education and training below degree level
Mortgage Backed Securities: a type of bond sold by a mortgage lender to an
investor who purchases the rights to the interest and capital repayments on
mortgages in return for the investment
a term for 16-18 year olds who are not in education, employment or training
Small or Medium Sized Businesses: within the category there are size bands
applied where micro businesses have up to 9 full-time equivalent (FTE) employees;
small businesses 10-49 FTE employees; and medium sized businesses 50-249 FTE
employees
a term to describe borrowers for whom there is a higher level of risk of them
defaulting on mortgage loan or interest repayments
South West Regional Development Agency
Wessex Association of Chambers of Commerce – the umbrella organisation for
Chambers of Commerce in Wiltshire and the surrounding areas
86 87 References
Professor M Parkinson et al ‘The Credit Crunch and Regeneration: Its Impact and Implications’ An
Independent Report to the Department of Communities and Local Government (January 2009)
Wiltshire Economic Assessment 2006-07 (March 2008)
PACEC ‘From Recession to Recovery: The Local Dimension’ LGA (November 2008)
Economic Intelligence Unit, Wiltshire County Council ‘Quarterly Economic Review’ (January 2009)
Jim Plunkett-Cole, GWE Business West Research ‘The Economic Impact of the 2008 Slowdown in
Wiltshire: Phase 1 A Wiltshire Economic Model’ (December 2008)
Jim Plunkett-Cole ‘The Economic Impact of the Slowdown in Wiltshire: Phase 2’ (February 2009)
M Blastland & A Dilnot ‘Crash! Boom! Disaster! That’s Enough Crazy Talk’ The Times, 21st
October 2008
Department for Transport ‘Delivering a Sustainable Transport System: City and Regional Networks
Data Book’ (March 2009)
S Bundred ‘Our public debt is hitting Armageddon levels’ The Times 27th February 2009
IDeA/LGA ‘Survey of the Impact of the Economic Slowdown on Local Authorities 2008’ (Dec. 2008)
Audit Commission Report ‘Crunch Time? The Impact of the Economic Downturn on Local
Government Finances’ (December 2008)
CECSNET & CCN ‘The downturn: local authority impacts’ (December 2008)
IDeA ‘Recession: The Local Impact’ (December 2008)
LGA ‘global slowdown: local solutions – councils helping people and businesses’ (November 2008)
IDEA and LGA Recession Case Studies (January 2009)
LGA ‘Backing Communities: Local Solutions’ (February 2009)
J Howson ‘Wiltshire Police: Credit Crunch Report’ (February 2009)
S Bundred, Chief Executive, Audit Commission ‘Our public debt is hitting Armageddon levels’ The
Times, 27th February 2009
New Economics Foundation(NEF) ‘From the Ashes of the Crash’ (October 2008)
NEF ‘Community Banking Partnerships’ Pathfinder Leaflet
Community Development Finance Association Website
Example organisations – Wessex Reinvestment Trust; South Coast Moneyline; Moneyline Greater
Manchester; Aston Reinvestment Trust
88 Wiltshire Assembly: Combating the Credit Crunch
Project Brief
A
The Ambition
For the Wiltshire Assembly to agree actions to mitigate the effects of the credit crunch in Wiltshire.
To do this by building upon the first meeting of the Wiltshire Assembly and leading an inclusive
activity that will:
•
forge further INTEGRATION by using Assembly members, groupings and their networks to
gain information about the varied impacts of the credit crunch on the people, businesses
and communities of Wiltshire –- a listening phase with the Assembly acting as the ‘ears’ of
the community to provide evidence on what is happening and the effects on people’s lives,
behaviour and motivations
•
increase INSIGHT through the examination of what is heard in ways that are considered,
rigorous and proportionate and increase understanding by communicating complex
information in clear and straightforward ways –- an analysis phase with Assembly members
acting as the ‘eyes’ of the community to draw conclusions and create messages
•
create INNOVATION when Assembly members think about how they, and others, can ‘do
things differently’ to combat the impacts of the credit crunch upon the people, businesses
and communities of Wiltshire –- the fresh thinking and decision making phase.
Through this work the Assembly will aim to:
•
•
B
demonstrate the added value of partnership working by making a real difference to the
people, businesses and communities of Wiltshire, and
illustrate the strength and resilience of Wiltshire’s communities.
The Process
An outline plan is described below but it will be adapted as others make their contributions and
submit their ideas on the best approach. It is envisaged that all three elements will be interleaved
because the timescales to address some issues will be urgent but there is logic in the broad
sequencing of the three phases:
The Listening Phase (Integration)
This will consist of a wide range of activities that will seek to build a picture of what is happening in
Wiltshire as a result of the credit crunch: how people are being affected, how they are feeling and
how their behaviour is altering, how they see the future in the short-term and medium-term. It will
create an evidence base to describe what is happening and to be able to monitor changes in the
impact. Whilst there are crossovers, the work will be structured into two groupings:
89 1
1.1
1.2
1.3
1.4
1.5
Economic Impacts
Economic Analysis – already commissioned from GWE by Alistair Cunningham to provide a
rapid update on the Wiltshire Economic Assessment and identify vulnerabilities in particular
business sectors, supply chains and localities. This will be based on the latest available
evidence from Government and other statistics. A key element of this work will be with
Jobcentre Plus on employment data.
General business survey by Wessex Association of Chambers of Commerce (WACC) – this
will provide an evidence base from SMEs in particular with questions that address current
business confidence, performance and challenges, plans for capital investment,
employment levels, relationship with banks and other finance sources and ideas on
measures that would be of assistance.
Specific work with WACC and the ‘largest 50 employers group’ that has been created.
These organisations are the most significant in the county – an understanding of their
business position is vital to assessing economic impacts.
A survey of the position of the major public sector employers in the county re employment,
capital investment, budget/funding challenges and the impact of the credit crunch upon
their services.
A small number of focus groups, organised through WACC, with key professionals that
have close links to the economy – accountants, solicitors, commercial property agents,
bankers. This may need to be done in the economic zones of the county to help illuminate
the GWE analysis.
As the activity progresses there may be the need for specific consultations on trends with groups
such as major retailers, property developers, the banks, employment agencies et al. We should
also establish an ongoing communication channel so that urgent problems and changes in trends
can be highlighted quickly e.g. a Business Hotline. This work will be overseen and steered by the
Wiltshire Strategic Economic Partnership.
2
2.1
2.2
2.3
2.4
Social Impacts
Social Analysis – using the GWE Economic Analysis to inform WCC’s Mosaic model of
Wiltshire’s people and communities to provide a risk analysis of the potential social impacts
upon Wiltshire’s people. This will be undertaken by Phil Morgan and his team.
Citizen Panels – to use the existing structure of People’s Voice, Tomorrow’s Voice and
Carer’s Voice to ascertain Wiltshire residents’ views on the impact of the credit crunch upon
them and to obtain their ideas on measures that would be of assistance to them. These
could be analysed geographically and by age to assist assessment.
Survey of Impacts upon Communities - Wiltshire Forum of Community Partnerships
(WFCAP) and the Resilient Communities Partnership will be invited to carry out a survey of
the impacts in communities. This should assist the identification of parts of the county that
may need specific concentrated support if, for example, the closure of a major local
employer was combined with the loss of services at the same time.
Focus group and other linkages with voluntary organisations working on social issues. At a
general level these would include the Citizens Advice Bureaux, Voluntary Action/CVS,
90 2.5
Community First but would include other groups as necessary to address particular issues
e.g. equality and diversity impacts, migrant workers and their families, volunteering.
Use of Partnerships and their Officers – this activity would seek to measure the impact of
the credit crunch on various social issues by working to agree the key evidence to be used
and indicators of impact. The following are examples :
•
•
•
•
•
•
•
Safer Wiltshire Executive (CDRP) with the Police and Fire & Rescue Services re crime,
anti-social behaviour, arson
Health & Well Being Partnership and the PCT re the health of the population, stress,
mental health
Children and Young People’s Trust Board re effects on young people e.g. NEETs
levels, education performance and progression
Housing Partnership re homelessness, housing shortages, rent arrears
Transport Partnership re costs of transport, usage, rural isolation
Environment Alliance re impact on support for environmental measures and costs
Culture and Sport re participation levels, opportunities
This work should be guided and overseen by the Wiltshire Co-ordinating Group.
The Analysis Phase (Insight)
This work will distil the information gained and identify the main issues for Wiltshire in the short to
medium term as the impacts of the credit crunch become clear. The analysis will be informed by
appropriate regional and national comparisons and by ‘good practice’ activity that we are able to
utilise. It will be overseen by WSEP and the WCG with the involvement of Thematic Delivery
Partnerships as appropriate. The final documents will be part of the presentation to the Wiltshire
Assembly at its next forum on 26th March 2009 – a report entitled:
The Credit Crunch in Wiltshire: an Impact Assessment
This will identify and prioritise the issues emerging. It will also seek to provide balance by indicating
those aspects of Wiltshire’s economy and society that are proving resilient and highlighting ‘good
news’. This report will be supported by:
1
An Economic Impact Scorecard
This will consist of an agreed set of economic indicators that highlight the main impacts of the
credit crunch/recession and illustrate what is worsening and what is improving. The objective is to
create a simple means of measuring the position so that we are able to tell when Wiltshire is
coming out of recession and when actions are overcoming the negative impacts of the credit
crunch.
2
A Social Impact Scorecard
In a similar way this will consist of a key set of social indicators that address the main social
impacts of the credit crunch/recession.
91 The Fresh Thinking and Decision Making Phase (Innovation)
All those involved in the previous two phases will have ideas on solutions or measures needed to
tackle the impact of the credit crunch. Those will need to be captured as we go through the
process of listening and analysing. There is the need to make ‘quick win’ decisions on some
measures to respond rapidly to developing problems – it is envisaged that those might be made by
submissions to the WCG and the ABG with the agreement of the Chair of the Wiltshire Assembly.
The main activity in this phase, however, should take place at and subsequent to the next meeting
of the full Wiltshire Assembly on 26th March where the Impact Assessment & Scorecard ‘Insights’
will be presented together with ideas from partners on potential actions but that part of the
Assembly’s work should be to think creatively about the material presented with members
proposing fresh ideas for further analysis and decision and agreeing the next stage of the work of
this project. The potential output from the Assembly’s deliberations and any subsequent work could
then be formulated as its ‘Credit Crunch: Combat Plan’
George Bright, Project Leader
30th November 2009