Buddy, I can still spare a dime

I’ve puzzled for a few days how to wrap up the first year of this blog.
The answer's easy, though.
With a thank-you, of course, because 4,880 of you have taken a peek and had a read (or a laugh) at what I’ve had to say.
The biggest audience by far has been in the UK, with useful chunks coming from the USA, Germany and France. So the transatlantic alliance is alive and well and relations with Europe weren’t completely trashed by the Cameron V Sarko bust-up.
I’d also like to say thank you to some regular readers in Russia, India, Hungary and Singapore, and some welcome attention from Brazil and Canada.
What have you been reading? The single most-visited post was ‘Champagne, Chips and property development’, some thoughts about the Invest in Nottingham Club’s London day (and the champagne and chips I had at St Pancras).
But even that was dwarfed by the three posts which followed Westfield’s bombshell decision to sell Nottingham’s Broadmarsh shopping centre on the eve of a planned £450 million redevelopment. I’ll have a few more snippets on that in January.
Various observations on the economy, notably about oil prices, inflation, employment trends and public sector job losses, also appeared to go down well.
Well, I hope they did anyway. I’ve tried to shed light on a mix of major business-related issues in Nottingham and get underneath what seem to me some misleading analyses of where our economy is at.
Once again, I’ll have more to say on that shortly and it won’t all be depressing.
One of the lessons I’ve learned over the years in business journalism is that people who own and run businesses can get really fed-up of clichéd representations of what they do, and don’t regard one set of bad numbers as reason to give up and go home.
So ‘leaps’ in this number or ‘plunges’ in that might make today’s headlines but they tell you little about economic reality. Rifling through the Office for National Statistics website, you soon discover that some of these leaps and plunges aren’t leaps and plunges at all.
Similarly, the biggest beef for me at the moment is the lack of long-term perspective in some reporting of our economic predicament. Yes, we are going through an unprecedented economic crisis, but we are doing so during a period of unprecedented wealth and health. So, buddy, I can still spare you several dimes.
Whether its Christmas, the holidays, Hanukkah or just another day at the office, have a good one.

Eon or eeyore?

More consumer misery...
I take a call on my mobile from someone who says he is from the energy firm E.on. It goes something like this:
He begins: “Is that Mr Baker?”
Me (wearily): “Who is this?”
Him: “I’m from the customer winback team at E.on, and as a valued former customer...”
Me: “I’ve never been a customer of E.on.”
Him: “Oh, is that right? Well, I just wondered if you could tell me who your energy supplier is at the moment ‘cos I want to talk to you about some special deals...”
Me (even more wearily): “Do you seriously think I’m interested in doing business with someone who cold-calls me, on my mobile, at work, and tells me I’m a former customer when I’m not?”
Him, laughing: “Oh, okay, then. See ya.”
Dismal.

Mary Portas on retail: The future isn't the past

Mary Portas’ 55-page review into the future of Britain’s failing High Streets can be summed up in seven words: The future doesn’t lie in the past.

She begins her lengthy examination of traditional town centre retailing by gently pointing out that a key part of the problem is the failure of planners, retailers, landlords and even the public at large to face up to reality.
That reality is that supermarkets and shopping centres have thrived because they offered something which High Streets shaped by another era were always going to struggle with. The days when shoppers could park on the street and meander from shop-to-shop were dying as long ago as the 1960s and 1970s.
From the 1980s onwards, the writing has been on the wall: people leading increasingly busy lives have been looking for four key criteria from their retail experience – convenience, value, speed and an experience (as opposed to a simple transaction). Supermarkets, shopping centres and websites easily tick those boxes. High Streets don’t
Yet planning policies and councillors on planning committees have persisted in trying to preserve an economic model which fractured long ago. I’ve heard many a councillor say that they don’t want a big supermarket on their doorstep because of the damage it might do to local shops.
They should read this one paragraph from Mary Portas’ report:
“The phenomenal growth of online retailing, the rise of mobile retailing, the speed and sophistication of the major national and international retailers, the epic and immersive experiences offered by today’s new breed of shopping mall, combined with a crippling recession, have all conspired to change today’s retail landscape. New benchmarks have been forged against which our high streets are now being judged. New expectations have been created in terms of value, service, entertainment and experience against which the average high street has in many cases simply failed to deliver. These reasons alone conspire to create a new shopper mindset which cannot and should not be reversed.”
Or to put it more succinctly, shoppers have already left the High Street behind. A policy which seeks to preserve it in its current form is almost certain to prolong its suffering and delay its recovery.
Mary Portas may not be the first person to delve into the future of retailing, but councils would do well to pay particular attention to her investigation because it comes at a critical time – and there is an absolutely crucial difference in her approach.
Where others have carried out academic, economic and planning-based analyses, her report is that of a retailer and consumer. Where others focused on improving process, she started with a simple question: what do shoppers actually want?
They clearly don’t want the High Street to carry on trying to serve up a pale imitation of supermarkets or shopping centres. It therefore has to do something different.
What is that something different? Clues are beginning to emerge. It would be about a mix of uses which may still take in some conventional retail formats, but would also look at services which cannot be delivered online and work better locally, socially useful services (like council departments themselves), residential use, leisure and event-based use.
Councils do need to look long and hard at the continuing relevance some of their policies and consider whether they infact do more harm than good. Refusing a planning application for a particular type of shop because it involves a different use is barking mad if the property stays empty. And surrounding the car-borne consumer with parking restrictions, price rises and traffic wardens is an open invitation to go elsewhere. What value is there in a short-term hike in parking revenues when it contributes to the long-term decline in business rates?
The authorities who impact on the way our High Streets operate have got to take on board the scale of the change that has happened in retail and its whirlwind speed. Decades ago, shoppers used to trawl the shops and the streets physically looking for ‘bargains’. These days they go on discount websites, receive email alerts and, in some cases, wield smartphones capable of what’s known as Near Field Communication – so the store can ‘talk’ to them when they walk past.
Against that background, sitting in a council chamber and voting to block a supermarket development is like facing a tsunami with a bucket. Or telling consumers they should go back to a time when they had to spend more time looking for a limited variety of goods which cost more.
Your average independent small-town retailer cannot hope to compete with a global, technology-driven onslaught. Mary Portas’ point is that they shouldn’t even try – they should do something else.
That’s where the debate about the future of retailing in Nottingham’s town centres and high streets has to go next.

When the A453 speeds up, so will the economy

The reporting of the Chancellor’s Autumn Statement (that’s the mini Budget he said he was getting rid of) has been almost ritually gloomy
Growth worse than forecast, borrowing worse than forecast, cuts worse than forecast, unemployment worse than forecast (that’s enough worse than forecast – ed.)
There are a couple of reasons for the headline gloom-fest. For starters, this is not what George Osborne said would happen, and it lands him in a suspiciously similar position to his political opponent, Nottingham High School old boy Ed Balls. So some would say he is properly being held to account, others that it’s political schadenfreude.
The second reason is that we appear to have a fixation with news agendas:
“I think it’s grim, what do you think?”
“Well, yeah – it does sound grim, doesn’t it?”
“Terrible, pretty grim really.”
Now, it would be a brave person to stand up and suggest anaemic UK growth and the euro zone horror story signal that happy days are here again.
But I’ll try to dial in a little bit of perspective.
Besides a potential hiccup in this quarter and the next (that’s the R-word or the Double-D phrase), the economy is likely to grow a little bit over the next year.
As that’s a national average, some regions of the UK are likely to grow more than others.
The East Midlands looks like it’ll be one of them.
I says that because I saw a piece of research towards the end of last week from the Institute for Public Policy Research which analysed when employment in the regions was likely to get back up to its pre-recession peak.
Some of its research does sound, ahem, grim. Northern regions may not see employment peak again until 2018 or beyond. That’s a lost decade.
But other regions will see it return to the high by 2014. And we’re bracketed together with the south, south east and east of England in this group.
One more point of perspective. Whether it was courage, confrontation or carelessness, the Chancellor chose the day before the public sector pensions strike to announce that these workers could also look forward to pegged pay increases and more job losses.
In total, the Office for Budgetary Responsibility is now estimating that more than 710,000 public sector workers will have lost their jobs by 2017.
In isolation, that’s a huge number. But, as I’ve blogged before, it is a proportionally small part of the economy – of the UK workforce of 30 odd million, 6 million are employed in the public sector. So the job losses would amount to less than 2.5% of our total workforce, and over that length of time at least some of those jobs will be replaced by private sector growth (not as many as George Osborne would hope, though).
Besides the raft of measures aimed at encouraging lending to small and medium-sized businesses, the major headline for us was that we finally appear to have dragged the A453 widening project over the line.
After only 30 years of trying...
This single carriageway link between Nottingham, the M1, East Midlands Airport and the East Midlands Parkway railway station has accurately been described as the biggest car park in Nottingham.
Beyond the jokes, it has cost the local economy millions in delays, and Boots dropped some heavy hints in private that it regarded progress on this project as a factor in future investment – especially after the decision to turn part of its sprawling and under-utilised campus into an enterprise zone.
While we don’t have a definite start date, that project will now begin before 2015, which is earlier than expected. Turning it into a four-lane road should reduce congestion and cut journey times.
More significantly, it is also likely to open up swathes of land for residential and commercial development, and I wouldn’t be in the least bit surprised to see land transactions and planning applications start to shift in this area.
We can’t kid ourselves – it’s going to be slow progress for a while now. We could well have a situation where, when the A453 finally speeds up, so does the economy.

Broadmarsh: They think it's all over...it is now

Capital Shopping Centres now owns Nottingham.
Well, in retail terms anyway.
It agreed a deal today to buy the remaining 25% shareholding in Broadmarsh from the Royal Mail Pension Fund. With the 75% it agreed to buy from Westfield for £55m, it means it now has complete ownership of the centre.
For those interested, it paid £18.3m for the pension fund’s 25%. It’s the same quantum as the Westfield price, and probably a premium over the paper value.
The wording of CSC’s announcement, made to the Stock Exchange, is interesting.
CSC had said it wanted to pump £250m into expanding the Victoria Centre, which it already owns. The fear in Nottingham was that this would mean a more ambitious revamp of Broadmarsh – which would also tidy up a massive eyesore on the southern approach to the city – would be sidelined.
Not only that, but the artist’s impressions of what CSC has said it wants to do to the Victoria Centre are, shall we say, quite traditional (and that’s putting it politely
Anyway, this is what David Fischel, CSC’s chief exec, said in today’s announcement:
“CSC is delighted to have acquired this important asset in Nottingham. Common ownership of Victoria Centre and Broadmarsh greatly improves the prospect of transformational retail and leisure led development taking place within the city to the benefit of the local and wider Nottingham community.
“The Victoria Centre has been at the heart of Nottingham for over 40 years and this acquisition further underlines our commitment to the city, which is one of the UK's top ranking retail destinations. We look forward to working with Nottingham City Council on this exciting opportunity.”
That may just be holding back an already familiar deck of cards. Or it could be an olive branch to a City Council which privately has considerable concerns about what CSC may – or may not – do. Or, it could be an indication that, now it’s got two centres, it will revise both plans.
Legal completion of the purchase hasn’t gone through yet, so I doubt we’ll hear a categorical statement of intent until then. CSC will also be discussing its options with the likes of Harvey Nichols, Marks & Spencer, Apple and Hollister, all of whom had agreements of varying status in relation to Westfield’s Broadmarsh redevelopment.
Either way, it’s time for CSC to start talking to Nottingham.

Is High Pay Commission really tuned into business growth?

I blogged a few weeks back about the High Pay Commission, and it was in the news again over the past couple of days.
If you don’t want to track back through the link, here’s the resume: the High Pay Commission isn’t a Commission in the normal sense of a heavyweight, government-sanctioned probe into a matter of major concern. It’s a one-year project funded by a left-leaning think tank which wants to influence government policy. So the name’s a bit of a fib.
And though it is clearly all about what goes on in the upper reaches of stock market businesses, it doesn’t involve any business people. This Commission’s members are academics and a couple of well-connected London journalists.
The Commission’s mission is written all over its name: a belief that senior executives get paid way more than most, and probably don’t deserve it.
It’s in the news again this week because it has published its final report. It finds that executives right at the top of big stock market firms enjoyed pay rises which disappeared into space, compares that to the less-than-stellar performance of their businesses, and wants other people to have a say in executive pay in future. So no surprises really.
I’d be amazed if anything happened, though, for three reasons.
One is that a government grappling with no growth probably has neither the time nor the inclination to launch into an issue which risks being portrayed as dis-incentivising businesses at the cutting edge of the economy (indeed, Business Secretary Vince Cable has already kicked the Commission’s proposals into the long grass by saying government will look at some proposals next year).
Secondly, some of them sound like Utopia-meets-the-boardroom. The idea that any business would want employees sitting on a committee voting on a proposal about how much the boss gets paid is unrealistic. Why not stop there: we could have selected employees also voting on the sales strategy, couldn’t we? No, actually – it would be stupid.
Finally, while reining in top pay might make ordinary people feel good it will do nothing to make them wealthier. The answer to that is enabling economic growth, not disabling executive pay.
And this is the beef with the High Pay Commission. It’s an entirely London-centric concept: backed by a London think tank, run by people based in London and focusing on a small part of the business universe which is centred on London.
It seems to think silly salary packages doled out by global enterprises should be a big issue for the UK government. But is this really where the action's at?
As I said in the earlier blog, many ordinary business people have no more time for the PLC world than the High Pay Commission does. They think it’s too short-term, and have little respect for stock market chief executives or their jackpot pay packets.
But they don’t lose sleep over it. The big issue for them is the continuing inability of government to act like it gets SMEs – the real bedrock of the economy – on any level.
If it did, there would be fewer rules and regulations, cleverly-targeted tax incentives, better access to finance, and a serious effort to solve the continuing problem of school and college leavers who don’t understand what it takes to hack it at work.
The High Pay Commission’s proposals simply do not register on the radar of key business concerns.
But perhaps they weren’t meant to. Protests not so very far away from the Stock Exchange (and mirrored in Nottingham’s own Market Square) have been making a lot of noise about inequality and unfairness. The Occupy movement is anchored in a belief that capitalism, having landed us all in the soup, is just carrying on like it’s someone else’s problem.
Against that background, PLC bosses paying themselves fortunes according to obscure formulae which seem to come up trumps whatever the weather hardly seems like the stuff of civil society.
So the High Pay Commission is not divorced from reality. It makes some powerful points about the relationship between attainment and reward and public companies’ obligation to fairness.
But the anti-big business rhetoric we see so much of these days is in danger of obscuring a greater truth: that the vast majority of businesses simply aren’t like that, and that it is these businesses that our economic recovery hinges on.
I said in another blog that we were in an era where business has to work a whole lot harder to win public respect, and might start by pointing out the huge contribution it makes to the wealth and wider wellbeing of the communities we live in (don’t forget that 80% of jobs are in the private sector).
If it did, then may be London think tanks would think beyond PLC pay packets when they ponder the best way for business to bring wealth to a wider audience.

If only this was Broadmarsh

I’d love to say that this is how the new Broadmarsh could look.
But I’m afraid it won’t.
What you see above is a design produced by the Newark-based architect Benoy for a one million square foot retail development in Guangzhou, China.
Drawn up by Benoy design director Sarah Lee, it is inspired by some of the world’s major central parks, the flowing lines wrapping round an open space and linking up to a transport interchange.
This is an inspiring global landmark designed by a Nottinghamshire firm.
The tragic irony is that though we clearly have the talent to produce design which wins awards on the global stage, there appears to be no appetite to follow that path here.
The reverse, infact.
Where the Chinese are signing up to ambitious, ground-breaking schemes which win plaudits before they’re even built, Capital Shopping Centres would like to bolt a big brick box on to the end of the Victoria Centre.
The UK’s fifth biggest retail destination outside London has surely got to do better than this:

Youth unemployment: A shocking truth

A few thoughts on the political hot potato of youth unemployment.
To have more than a million 16-24 years olds not building up experience of work and contributing to the economy is pretty grim, whichever way you look at it.
History shows that the longer young people are out of work the more difficult it becomes to get them into the habit.
Grimmer still is the fact that the UK’s struggle to get school leavers through the workplace door appears to have been around for much longer than politicians would have you believe.
Buried away in the Office for National Statistics data published yesterday was an Excel spreadsheet which shows the path of youth unemployment since the last recession in the early 1990s.
In the early 90s recession, youth unemployment peaked at just over 900,000 in 1992. It then commenced a long, downward path as the economy gathered speed again, bottoming out at just over 500,000.
But that was in 2001. And the ONS’s figures show that while it has risen steeply since 2008, it was already on a marked upward path which had begun in 2003.
Between 2003 and 2007 it rose from under 600,000 to over 700,000. Right in the heart of the economic boom.
There is also a clear divide in these numbers, one which was also glossed over yesterday.
The unemployment rate among 16-17 year-olds (i.e., GCSE school leavers) hovered around the 20 per cent mark from the turn of the century and wasn’t much lower in the decade before that. Among 18-24 year olds (the A-level to college/university period), it fell from around 15 per cent to around 10 per cent before starting to edge up again from 2005 onwards.
I won’t pretend to know why it is that we’ve had an upward trend in youth joblessness that predates the crunch (though it might suggest when the true stresses in the economy first began to emerge), but there was an interesting contribution yesterday to the debate about solutions.
Derbyshire & Nottinghamshire Chamber of Commerce has been reporting for some time that its Quarterly Economic Surveys have been consistently flagging up a problem with the quality of young people turning up for job interviews.
The problem is that these job candidates lack both basic skills – literacy and numeracy – and an understanding of what it takes to hack it in the working world.
To cut to the chase, it’s suggesting that schools’ relentless focus on driving up exam results has missed a crucial element in the bigger picture of what makes a good employee: that attitude counts just as much as attainment.
The Chamber’s got to be careful that it isn’t accused of tarring all kids with the same brush and suggesting school leavers are a generation of feckless Facebook addicts.
That is a tabloid cliché which won’t help identify a solution.
I know that because the same day the unemployment figures came out, I spent the evening at the Nottingham Post’s inaugural Student Awards. It was an inspiring occasion, with young students from city schools and academies proudly receiving awards for a range of stunning achievement which covered everything from academic brilliance to community involvement and immense sporting and creative prowess.
So we should not lose sight of the fact that great things can and do happen in Nottingham’s schools.
But those ONS numbers point to an urgent and serious issue. The jobless rate among 16-17 year-olds has been rising relentlessly since the early part of the last decade, and is heading into territory which points to a fundamental failure underneath apparently improving educational attainment figures.
That points towards wasted lives and economic under-achievement
The Chamber says the Ofsted inspection regime for schools should be changed so that it also measures how good schools are at preparing people for the working world.
It may be a step in the right direction. But schools – and business – may need to make some giant leaps.

Broadmarsh battle isn't over yet

The Broadmarsh story isn’t over yet. There is one final twist in this tale which relates to the 25% shareholding in the long lease on the centre which Westfield didn’t own.
To recap, Westfield agreed to sell its controlling stake in the operation of the centre to Capital Shopping Centres, the owner of the Victoria Centre.
It was, if you like, a ‘knockout’ deal, one intended to overcome the commercial roadblock caused by both Westfield and CSC wanting to redevelop their centres at the same time.
It is thought – though not confirmed - that the prime movers in this deal were John Whittaker, the Lancashire billionaire whose property business, Peel Holdings, has the controlling stake in CSC, and Stephen Lowy, whose family empire owns Westfield.
You’d have thought that the minority shareholder in Broadmarsh would simply have to accept that the senior partner had done a game-changing deal.
But that’s not necessarily the case.
The 25% shareholder is the Royal Mail Pension Fund. And the terms of its shareholding are that it has pre-emption rights – in other words, it can table a counter offer for the 75% that Westfield has agreed in principle to sell to CSC.
In theory, it has 60 days in which to table a bid.
In practice, it will probably have to make up its mind within the next few days. That’s because CSC has also made an offer to buy its 25%.
We don’t know the terms of that offer, but it will almost certainly contain an ultimatum that unless it is taken up the offer will be withdrawn in less than the 60 days allowed to exercise the pre-emption right.
In other words, it’s an attempt to spike the guns of a counter-bid before anyone has the time to put one together.
This may seem uncompromising stuff, but that’s the way big corporates operate when the value of their business is at risk. No one on the stock exchange would bat an eyelid.
Nevertheless, there is emerging evidence that CSC is going to have to be mindful of the impact this deal has on the reception it gets in Nottingham.
There is considerable political disquiet at the way the sale deal was done – no one in Nottingham knew about it, and the first public confirmation was on the Sydney and London stock exchanges.
Phone calls to all the concerned parties were made last Wednesday evening, but by then the die had been cast.
Standard corporate practice though it was, this did not go down well in the city.
It is against that background that CSC may decide that it wants to go ahead with the expansion of the Victoria Centre and ditch the redevelopment of Broadmarsh.
It needs Nottingham City Council onside to do this. Yet the Victoria Centre was probably not their favoured scheme.
While the Broadmarsh design offered an open environment which cleaned up an eyesore right next to the site of the new transport hub, Victoria Centre’s plan envisages a large-scale – and architecturally dull – extension of an existing sealed mall. It’s making a big box bigger.
Worse in the eyes of city planners, it threatens a potentially significant increase in car-borne visitors in the home of what is arguably one of the best public transport systems in Britain.
Finally, sealed malls are all about keeping trade to yourself. Where would that leave the rest of the city centre around Nottingham’s iconic Market Square?
It is this spectre that is now occupying the minds of the city’s political leadership in a very big way. They see a fundamental part of Nottingham’s future apparently being determined not by elected politicians but by corporate Britain. Whether you think it’s fair or not, corporate Britain doesn’t have a great name right now.
Capital Shopping Centres may well succeed in knocking out potential commercial opposition.
That won’t necessarily translate into support from Nottingham.
One way or another, there will still have to be a plan for Broadmarsh.

Westfield and CSC: This town wasn't big enough for the both of them

So, what are we to make of Westfield’s decision to walk away from Broadmarsh within sight of a much-vaunted £450m revamp?
I don’t think there’s any question that they’ve decided it would be an awful lot easier to make the numbers add up elsewhere – specifically in the south east, which simply isn’t experiencing anything like the downturn seen in the rest of the country.
In Nottingham, they waded through a complex land assembly and protracted planning, only to see the economic tide head back out.
But the signs are that Westfield may not have made the first move in this decision (though it was certainly wearying of a planning process which went on so long a rival appeared).
No one locally knew about this decision in advance. There is evidence, too, that Westfield’s own UK executives may not have been the first to find out, either. Senior figures here were still proceeding with this plan as recently as last week.
From Capital Shopping Centres, under whose name a statement confirming the intended £55m purchase of Broadmarsh was issued yesterday, we have heard nothing.
So who was the driving force behind this move?
One interpretation is that this has the stamp of a clear-sighted attempt to solve the fundamental dilemma facing both Westfield and Capital Shopping Centres: both were pitching the same set of high-profile retailers.
So only one scheme was going to succeed.
This would have affected the prospects – and therefore the value – of the losing side. The respective shareholders in Westfield and CSC would not have wanted that to happen. So there was a price to be negotiated, one determined by the present and future value of one centre and the impact its development might have on the value of the other.
It’s the kind of deal negotiated by people who know development lives on private profits not public plaudits. Pretty no-nonsense hard-heads, I’d guess.
The no-nonsense hard-heads behind this deal have solved their problem. Infact, they’ve handed the dilemma back to the city’s planners and politicians…whose measure of success is defined by the same criteria in reverse: plaudits not profits.
Nottingham City Council wanted the Broadmarsh revamp to go-ahead because it would rid the city of a series of shockingly decrepit 1960s eyesores which should have been levelled by a smartbomb 20 years ago.
Instead, we would have a new, expanded shopping centre featuring big-name retailers in eye-catching street scenes which spoke of an ambitious regional capital.
So one last deal is still to be done. It will determine whether Capital Shopping Centres expands the Victoria Centre and merely dusts a few cobwebs off Broadmarsh, or is persuaded that there is a way of making the Broadmarsh numbers add up in a way Westfield decided it couldn’t.
This will be a very tough negotiation for Nottingham City Council, a negotiation which will determine the way our city looks for perhaps 30 years ahead.
Whether in person or proxy, the man they will effectively be dealing with may well have been cutting a deal with someone in Sydney recently.
He is clearly a formidably determined character. And he now has Nottingham’s retail future in his hands.

Westfield's Broadmarsh bombshell

It’s a bombshell announcement from Australia which will send ripples not just across Nottingham but the whole of the UK retail industry.
Westfield announced overnight that it has sold its controlling stake in the city’s Broadmarsh shopping centre. And it has sold it to the people who own the Victoria Centre.
The £55m deal will see the Australian shopping centre giant’s 75 per cent share in Broadmarsh taken over by Capital Shopping Centres.
The deal has huge implications for the future development of Nottingham city centre, and its status as one of the top retail destinations in the UK
Westfield was about to push the button on the first stages of the £450m redevelopment – one that Nottingham has been waiting for the best part of 20 years.
So why has it backed out when designs have been drawn up and negotiations with a raft of big retail names have reached an advanced stage?
The official line from Australia – and that’s where this announcement has come from, not London – is that it has taken a strategic decision to increase its focus on ‘larger, iconic centres’ like the giant mall it has developed next to the London 2012 Olympics site.
But the fact that it has sold to Capital Shopping Centres raises another question. CSC is also in the advanced stages of a £250m plan to massively increase the size of the Victoria Centre, and the consensus among property experts was that only one of these two schemes could succeed.
So has Westfield decided to cut a deal where it walks away with a premium on the book value and leaves the field in Nottingham open to one developer?
Either way, its decision to abandon Nottingham is hugely controversial. The city has lived with a weary retail relic for years, watching a previous redevelopment plan sink beneath the credit crunch.
After some difficult negotiations with the city council, Westfield then came forward with a new plan which would not only have redeveloped Broadmarsh but also have tidied up the southern gateway to the city centre, dovetailing neatly with plans to turn the railway station into a transport interchange.
So it was not just retail redevelopment, but tangible regeneration.
As I write, there is no statement from Capital Retail to say what their intentions with Broadmarsh are. But the city will be desperate to keep the idea of a southern gateway alive, and it has real concerns about a Victoria Centre extension which appears to tilt the retail centre of gravity away from the city centre and northwards.
There could be some political recrimination from this, too – has the city allowed a major opportunity to slip out of its grasp for a second time?
Let’s hope not. In terms of spend, Nottingham is still the fifth biggest retail destination outside London, and the interest of the likes of Harvey Nichols predates the current Broadmarsh plan.
Capital Shopping Centres hasn’t spent £55m buying out Westfield for nothing: one way or another, a big investment in Nottingham retail is still going to happen.

A Nightmare on Euro Street

You don’t need to be a professor of political economics to get your head round the disaster area that is the Greek economy.
If you run your own business, then a few simple facts and figures should do the trick. So here they are (warning to any EU finance ministers: look away now).
Greece currently owes around £300 billion in debts. Yet its economy is worth only £200 billion a year (for the purposes of comparison, the UK economy is worth around £1.38 trillion). So it isn’t making enough money to pay.
It’s almost certain that the Greek government told creative fibs about the scale of its budget deficit (the shortfall between its tax income and its spending). We now know that, at times, it has been twice the stated level.
Greece ‘qualified’ to join the euro with a budget deficit supposedly amounting to 3.7% of its GDP. Before the credit crunch hit in 2007, the deficit was already 6.5% - well above any other Eurozone country. By 2009, it was just short of 16%. (We’re not short of budget deficit issues in the UK, of course, but our figure for 2009 was 11.5%, and that for an economy six times the size of Greece).
One of the reasons Greece runs up big budget deficits is that there is widespread tax dodging. In 2005, for example, 49 per cent of tax went unpaid in one three-month period. Overall, it’s thought the Greek government loses as much as £18 billion a year in unpaid tax.
The public sector accounts for around 40% of the Greek economy…which will, of course, needs to be fed a huge and steady stream of tax. Tax-and-spend government is fine - but only if you collect the tax.
In theory, then, Greece will routinely need to borrow supertankers full of money to make ends meet. But the bonds it tries to sell to raise that cash don’t even qualify for junk status now – the financial equivalent of scrap metal.
So, it’s bust.
Not a pretty picture for Greece, and now a Nightmare on Euro Street.
You can see from those numbers that Greece never really had the financial discipline to join a one-size-fits-all currency system where 17 different countries had to meet the same financial rules.
Greece has exploded out of the seams of it, and the rest of the Eurozone countries are now desperately trying to stitch those seams back together. It is a painful spectacle.
Italy is facing the same nightmare scenario for three reasons: it, too, engaged in creative accounting about its budget deficit, it has huge debts, and its prime minister, Silvio Berlusconi, is widely derided as a political clown who has lost control of the country’s finances. This in the third biggest economy in the Eurozone…
Financial markets haven’t just written Greece off. They think it exposes a flaw at the heart of the whole Eurozone project: that you can’t have one currency when there are 17 governments unable to agree on a way forward because their economies are operating at different speeds.
The Greek government’s decision to agree a debt restructuring deal one week but put it in doubt through a referendum the next illustrates the point. Markets won't wait; they will take their own decision.
And this is why the Greek dilemma is not some distant wrangle you can read about over your cornflakes and forget when you go to work (though the antics of some Conservative eurosceptics last week suggest some still think this is a playground knockabout).
The clear and present danger posed by the eurozone crisis is that banks, confronted by losses on loans to indebted countries, put the brakes on lending again, tipping the UK’s biggest export market back into recession - and us with it.
Beyond that, the big question beginning to loom over the whole Greek tragedy is this: is an EU with single currency heading towards a single treasury?

Regional Growth Fund: Has the East Midlands been short-changed again?

The government may face accusations that it has turned its own philosophy on its head with the results of the second round of bidding for the Regional Growth Fund.
This, if you remember, was the £1.4 billion pot of money designed to cushion the blow of the loss of regional development budgets.
The East Midlands didn’t do well in the first round of bidding. In Notts, only one small project was approved, cash which will help a science company expand.
But local politicians – and, significantly, the Derbyshire-Nottinghamshire Local Enterprise Partnership – comforted themselves that the lion’s share of the money, some £900m, was going to be handed out in the second round.
All sorts of local projects submitted bids, a number of them related to small business growth. In Notts, only one bid succeeded again, cash for the Worksop wire rope manufacturer Brunton Shaw..
The decisions released today suggest that the dead hand of national politics has played a part. Derby will, quite rightly, be celebrating the success of the £50m Derby City bid. But it’s difficult not to wonder whether the Bombardier fiasco was in the back of the minds of ministers signing off these decisions.
Giving Derby a second kick in the teeth would have been a political disaster. So good luck to Derby - £50m represents a massive opportunity to make up ground lost through a series of big business setbacks.
Yet it also appears to fly in the face of Conservative philosophy, which suggests the best way to grow a sustainable economy is to avoid an over-dependence on public money.
There was bound to be disappointment in this exercise. While £900m was on offer, the value of the 492 bids nationally totalled more than £3.3 billion.
The point has also been made before that the East Midlands isn’t viewed as a weak economy, so more money is likely to go further north (indeed, nearly 40% of the bids came from the North East and North West).
Yet the East Midlands does appear to have come off badly from this exercise. One of the key measures is the number of direct and indirect jobs which successful bids will support. In the East Midlands it’s 1,400 direct jobs, 7.800 indirect. This is smaller than any other region, including the booming South East.
Three other questions are raised by the RGF result in the East Midlands. One is where this leaves the LEP, which needed a big project to give it some purpose – does the Derby City bid provide that or not?
The second revolves around Boots and its enterprise zone. The company is thought to have put in a bid for £200m. It got nothing, so where does that leave plans for a zone launched personally by David Cameron and Nick Clegg?
It certainly raises the stakes on the fight to win government funding for the dualling of the A453, which Boots views as crucial to the future of its Nottingham site.
The final question is one which seems to have dogged so many civil service business decisions, most notably Bombardier: did it enforce the rules around RGF decision-making literally, or did it interpret them in a way which ensured a desirable result?

Give way...or give up?

It’s long been my belief that the way road signs are erected has little to do with the safe and organised flow of traffic and everything to do with council departments justifying their budgets.

On top of that, it’s turned into a nice little earner for the industry which makes them.

I reached that conclusion years ago after a drive down Southwell Road West in Mansfield where, in the space of around a quarter of a mile, it appeared someone had fly-tipped half of that year’s road sign production.

There were so many that it was impossible to take in all the advice they were giving. Worse, some repeated the same message so often that you began to wonder whether you were living in a goldfish bowl and going round in circles.

And on top of that, they made a clean, simple road look like officialdom had simply emptied a dustbin all over it.

It was confusing, it was annoying, it was wasteful. And it was just one road. You’ll all have your own favourite roads, dual carriageways, alleyways even, where signs are either completely overdone or totally unnecessary. Or both.

So, I was thrilled to hear yesterday that Transport Minister Norman Baker hoped to “dramatically reduce” the number of road signs in the wake of the biggest review into this nice little earner in 40 years.

Let me quote the Minister: “Sometimes the jungles of signs and tangles of white, red and yellow lines can leave people more confused than informed. This expensive clutter can also leave our roadsides looking unsightly and unwelcoming, so the changes I am announcing today will help councils cut the number of signs they need to use.”

I couldn’t have put it better myself – a clear acknowledgement that councils and highway authorities spray white and yellow paint around like it’s going out of fashion, and appear oblivious to the fact that every new sign is yet another unsightly distraction.

It sometimes seem as if highway teams lurk round corners giving virgin tarmac five minutes to set before they dive in and stab it to death with signs in triplicate.

So, Mr Baker’s announcement is going to bring an end to this ridiculous and expensive little industry, right? Not exactly...

Elsewhere in his announcement are a number of phrases which, I confidently predict, highway authorities will leap on and use as a justification for continuing to litter our countryside with ugly and unnecessary statements of the bleedin’ obvious.

I quote:

“These new measures will significantly cut red tape by allowing councils to put in place frequently used signs without needing to get government permission every time.”

Which may be translated at the town hall as: You’ve got licence to plant more signs.

Or:

“There will be new signs to alert drivers to parking spaces with charging points for electric vehicles and councils will be able to indicate estimated journey times on cycle routes, to help people plan their journeys.”

Which translates as: You can also plant a whole load of new signs alongside the ones you already litter the pavement with.

There is a miserable predictability about all this. A government minister admits there is a problem we’ve known about for years and announces clear and decisive action...which will make no difference whatsoever.

I would love to think councils will leap on this as an opportunity to do things differently at a time when they are painfully short of money.

The cynic in me suggests that they simply can’t stop themselves telling you what to do, and that the desire to preserve departments and budgets means this is a habit they can’t kick.

Cynicism aside, there’s a serious point to all this. Road signage and layouts have in places become complicated to the point where they are distracting and difficult to understand. Planting huge yellow signs which shout ‘Speed Kills’ seems almost ironic.

Roadsides are no place for sloganeering.

The Smell of Fear

I wouldn’t bother looking at the TV news if I was you. It’s not very nice. Draw the curtains and make a cup of tea instead.
Over on the continent, you have a sovereign debt problem about to be turned into a banking crisis by political incompetence. Which, I guess, is what happens when you try to get a room full of chalk and cheese to agree on anything.
Over in the USA, the Republican Congress’s determination to turf Barack Obama out of the White House means both sides can't agree on any long-term solution to the USA’s gargantuan budget deficit before the 2012 Presidential vote. Which is certainly brave, but may turn out to be stupid.
With those two elephants in the room, do we even need to talk about the UK’s flat-as-a-pancake GDP? Thought not.
Much as I’d like to dismiss the problems over in the Eurozone – and the political turmoil in particular is a gift to Europhobes – it presents a clear and present danger to our frayed economy. Despite all the talk of China, India, Russia and Brazil being the Next Big Thing in exporting, the amount of money we earn from them is dwarfed by what we routinely rake in from the likes of Ireland, France, Germany, Holland, Belgium etc.
They are our closest trading partners in every sense, and we need to do more with them.
So, imagine a situation where your business partner on the continent says he can’t pay you this quarter and isn’t currently able to finance any new orders. Unfortunately, that scenario is no longer completely in the realms of fantasy land.
The Eurozone crisis is a story of world financial markets ruthlessly chasing down governments and banks who haven’t given a straight answer to the question ‘When are you going to pay off your debts?’. Greece borrowed so much that, whatever the eurozone might pretend, markets have already decided it can’t pay.
So the next question is what happens to the people it and other debtor nations owe money too? That’s where some European banks come in, and they now find themselves in the same situation that UK banks did in 2007-2008: carrying huge debts that they do not have enough of their own capital to cover.
This, though, isn’t the problem. That lies with European governments. Between them, they can decide to let Greece default on its debts and provide banks with all the funds they need to cope. It won’t be pretty, but it can be done in an organised fashion.
It can, but will it? European institutions are not used to taking decisions quickly, when you dissect those decisions they often turn out to be fudges open to localised interpretation, and there is a history of allowing exceptions through opt-outs or different groupings.
What do world financial markets do when confronted with the failure to answer serious questions about debtors? They take the decision themselves.
That’s what is happening at the moment. When indebted European banks go out into the money markets and seek routine funding to support their cash flows they are being told ‘Fine – but the price has gone up’.
This is exactly what happened here in 2008 when the London Interbank Offered Rate – what banks charge each other for lending money – shot up overnight. UK banks responded by clamping down on lending out the money in their own accounts, and the results of that are still being seen in our own dismal GDP figures.
You’ve seen the Bank of England announce today that it will drop another £75 billion into the UK economy through further quantitative easing. That will help us in the medium to longer-term, and may assist some measures of business confidence.
But only when the European question is answered will we be able to look forward.
The Eurozone may yet get cajoled, pushed and kicked into a categorical pledge to support financial institutions come what may and to accept that Greece won’t pay back some of its debts.
That in itself won’t be a get-out-of-jail card. But the alternative is…well, if the alternative happens I’d send the TV set back.

A deflating experience

Let me introduce you to a business my wife came across during a fraught journey down the M1 the other week.

Welcome to the world of roadside recovery.

My wife suffered a heart-in-mouth blowout while driving our children down to friends and a recovery firm contracted by the Highways Agency took her car to a motorway service station. They charged her £145 for the pleasure.

On the steep side, may be, but it is a charge allowed by the Highways Agency contract, which does not like to see vehicles stuck or tyres being replaced on the hard shoulder. Indeed, one of the first things the Agency tells you is that you’ve got two hours to shift yourself.
Understandably, my wife was stressed out by the whole experience, had two children to care for and asked the recovery man for help to change take the damaged wheel off and put the spacesaver spare on. So he did. It took just over three minutes.
And they charged her £80.
To begin with, he said they wanted paying in cash and kindly pointed out a cash till which she might like to fetch the money from. Eventually, after liaising with 'the gaffer', they accepted a credit card. Which is what she’d used to pay for the Highways Agency fee in the first place.
Cash or credit, a rate which equates to £1,600 an hour for taking one wheel off and putting another one on is, I’m sure you’ll agree, very nice work if you can get it. Better, indeed, than many corporate lawyers charge.
And much better than the professional tyre depot in Northampton which eventually took the flat tyre off the wheel, fitted a new one and balanced the wheel for good measure. They took 22 minutes and charged £65. For parts AND labour.

For some reason, I find the tyre depot far easier to recommend than the Highways Agency-approved Crouch Recovery.

You won’t be surprised to hear that I contacted Crouch Recovery to inquire about their scale of charges.

They kindly agreed to reduce it to £60, which takes that theoretical hourly rate for wheel-swapping down to a miserly £1,200. They protested that they had to cover the costs they had invested in equipment and training. I pointed out that since the wheel-swap was discretionary and not part of the Highways Agency contract their costs had already been covered in the £145.

There was no response to that. There is none: it is an unreasonable charge because it bears no relationship to the service delivered.

The message here is simple. If you travel through the M1 in the East Midlands, make sure you’ve got your own breakdown cover. Otherwise it won’t just be a tyre that deflates.

There is a postscript to this. My wife took a call from the Highways Agency last week asking for some feedback about the way the service had been delivered by their appointed agent.

As the French might say, la vengeance se mange très-bien froide.

Another country



Henley: good for rowing and shopping



A few weeks back I blogged about the difficulty that lurks behind the theory that our High Streets would be so much better if only they were full of independents rather than the same old chains.

It’s an entirely understandable lament based on concerns that High Streets all over the country are at risk of looking the same wherever you go. Choice without choice, so to speak.

But the idea that you can somehow regulate these Clone Towns out of existence is flawed in my view.

Chains proliferate because people like using them. People prefer the lower prices they tend to offer. And, as I discovered in Alnwick in August, a street full of independent retailers isn’t necessarily an attractive one. It can be utilitarian, drab, even off the pace.

Yet there are places where independents not only thrive but make very good money, and I was in one of them at the weekend.

I knew Henley when I was a lad, having grown up just outside Reading and rowed on the Thames at Henley for the school boat club. It was an affluent enclave even in those days, benefiting from a mix of old money and London commuters.
Multiply that by any factor you care to name now. As you drive through the downland in Berkshire and West Sussex you see carefully managed countryside dotted with paddocks, maneges and gravelled drives leading to characterful piles. It seems like Olde England, but is too carefully cultivated for that.
Put simply, there is not only no recession in this part of the country, it is in fact motoring along as if economic life is perfectly normal and rudely healthy.
Henley town centre, which gravitates gently down towards a river frontage and past the old Brakspears brewery buildings, is dominated by independent shops, restaurants, cafes and galleries. Many are so slick and well-presented that you would easily mistake them for a hip, new chain.
They combine classy fascias with clever window displays showcasing upmarket goods, often without price labels – a sure sign of high-end disposable incomes.

It is also a sign of independent retailers who know how and where to make good money, who understand the power of brand and display, who are good at sourcing fashionable quality, who know their market well, who know how to provide an experience rather than a simple sale.

I suspect Henley is also a well-managed retail centre capable of saying no to things it doesn’t like, with independent retailers making enough money to afford the rents on prime locations. Some national chains were there, but they were having to play by Henley’s rules.

An affluent town in the healthy South East is a total contrast to Alnwick. Places like Henley are microcosms of the now considerable gulf in wealth and economic performance between London and the South East and the rest of Britain. It is, I'm afraid, another country.

But they also tell another tale about independent retail, suggesting that it can thrive in exclusive catchments, but will always struggle elsewhere.

For independents to make a significant comeback in smaller towns and cities – especially as you travel further north – they would need local or national government support of one form or another, through either property-related incentives or help with marketing and training.

But that won’t guarantee success. I go back to what I said about Alnwick: for an independent retailer to genuinely thrive, it has to be extremely hard working, commercially savvy and uncompromisingly committed to succeeding.
People like that are rare. And those that do decide to go down the independent retail route may well be tempted by the internet rather than the High Street because it’s a cheaper way to trade.
Retail is about customer demand, not political ideals. In this climate in particular, it’s also about hard economic facts of life.

The Goodwood School for Real Racers

When I was a kid I followed motorsport in a big way, watching Formula One on TV, visiting the British Grand Prix and the International Trophy when they were at Silverstone and the British round of the European Formula 2 Championship at Thruxton (which was just down the road from where I grew up in Berkshire).

I used to read Pete Lyons’ Grand Prix reports in the weekly mag Autosport, also lapping up page-after-page of reports about sportscars, touring cars, rallying and club racing. On top of that I also bought Motor Sport, the monthly magazine ‘which gave its name to the sport’. Its obsession with pre-war racing was a bit too much for me, but Denis Jenkinson’s Grand Prix reports were brilliant for the way they punctured some of the commercial egos who stalked the sport (he referred to the Players-sponsored Team Lotus as Team Shambles)

These days, the idea of shelling out £150-200 to sit a quarter of a mile from the track ‘watching’ a Grand Prix is the wrong side of silly street for me. I still watch it occasionally on TV, but long for the days when the sport looked and felt like racing rather than a corporate brand strategy developed in a wind tunnel.

Which is what took me down to Goodwood in West Sussex at the weekend. This is the time of year when Lord March stages the second of his increasingly successful representations of motor sport the way it was. July sees the Festival of Speed, where drivers past and present fling all sorts of metal (and carbon fibre) up a hillclimb outside Goodwood House. And September sees the Goodwood Revival.

It’s called Revival for two reasons. One is that it brings back into use a legendary racing circuit which waved goodbye to racing in the late 1960s when Freddie March (the current Lord March’s dad) decided he could no longer carry on ploughing money into modernising the track. The other is that the event is a celebration not just of motor sport in decades past but of life in the 1930s, 40s, 50s and 60s.

So it mixes road and track cars and bikes from those decades with Second World War aircraft, displays of motoring memorabilia (presented as they used to be), and invites the crowd to enter into the spirit of things by dressing in period costume (which thousands did, some to impeccable lengths).

Best of all, it brings these priceless motoring icons within touching distance of the paying public. You can walk within inches of classic sports racing cars worth millions (I made a bee-line for Pink Floyd drummer Nick Mason’s Ferrari 250 GTO) and rub shoulders with drivers and riders (Sir Stirling Moss was busy signing autographs). Unlike F1 drivers doing their corporate duty (something Lewis Hamilton is honest enough to admit he loathes), they turn out because they love it.

And ‘it’ in this case is Racing. The rare metal they drive may be worth fortunes, but they hammered round the track as if they were chasing a championship-deciding win – sometimes with eye-wateringly expensive consequences.

For my money the most impressive spectacle came at the start of the Whitsun Trophy, a race for mid 1960s Le Mans-style sportscars. Standing at Madgwick, the circuit’s first corner, we saw a 30-strong field take off like the Charge of the Light Brigade and hurl itself at the bend.

Leading the field were two Lola T70s, cars which hid F1-style chassis technology under a sports car body driven by massively powerful Chevrolet V8 engines. These monsters attacked the same piece of track with a commitment which meant only one was going to get round it. Sure enough, one went spinning across the tarmac, with other Lolas, Ford GT40s and Ferraris scattering in all directions.

The one thing which gave me hope that Formula One hasn’t completely lost touch with what it is meant to be was the fact that one of the scattering cars was being piloted by Adrian Newey, the designer whose genius has left Red Bull’s Sebastian Vettel untouchable.

He thrashed round in an impressive manner, lunging up the field in a beautiful 1965 GT40 which he keeps for those weekends when he’s not busy out-thinking everyone else in motor sport.

But F1 would have to gulp down a pack of simplification pills if it was to get anywhere near the spectacle we saw at Goodwood. We were closer to the action, the cars weren’t glued to the tarmac in the way today’s winged wonders are, and the drivers were out for some serious fun.

They – and the Goodwood Revival - are what motor sport should really be about: Racers.

Are big bonuses in big firms small beer?

It’s September, and politics is slowly but surely getting back into full swing. Hence the national media has largely lost interest in ‘riots’ in the regions.
So today we’ve seen a renewed debate about whether the Government needs to inject a few quid into the economy and a report by the High Pay Commission suggesting FTSE 350 directors have been lunching on big bonuses while their companies have been going nowhere fast.
The debate about the economy will run and run, but reports which suggest the rich are getting richer while the rest of us struggle is more likely to lodge in the public psyche because it plays to that well-known prejudice that life’s not fair.
Two points about the Commission’s report.
One is that the High Pay Commission isn’t actually a Commission in the naturally understood sense. While Commissions are traditionally set up by government to hold open inquiries into matters of serious public concern, the High Pay Commission is infact a one-year project set up by a London think-tank called Compass, which styles itself as ‘promoting left-wing debate’.
Those origins are reflected in the Commission’s membership and experts panel, which doesn’t include any high-profile business owners or business organisations, and is comprised mainly of academics, consultants and writers concerned with equality and civil society. It also has strong media connections, including former Guardian and BBC journalists.
Nothing wrong with that – everyone is entitled to a view and I’m guessing it’s unlikely the FTSE 350 would collectively invite public inquiry into how much its executives trouser each year in handsome bonuses.
All the same, the name is a bit misleading without explanation.
My big beef is that this self-elected, well-connected body puts so much emphasis on a sector which is unrepresentative of business at large.
So we’ve had another day of headlines about business which encourage the public to think that the commercial world is full of nothing but ruthless fat-cats who are out to screw you for everything they can get.
And that’s an unrepresentative cliche. The High Pay Commission would score some more relevant points if it asked the UK’s vast army of private business owners what they think of their Stock Market cousins. They’d get some pithy responses, I can tell you.
But missing a trick is not the point.
Most businesses are run by people who work their socks off, take considerable personal financial risks, and do it because they are motivated by a desire to make it on their own rather than squirrel away enough readies for a yacht in the Med.
The High Pay Commission may be making some valid points. But stopping FTSE bosses lining their pockets is unlikely to make life better for the public at large. The media focus on it is all a bit London-centric.
Right now, a Commission into what government could and should be doing to provide a cogent business support service for small firms would be far more useful and far more relevant to where our economy is at.

LEP faces a turning point



George Cowcher: a key voice on the LEP

At some stage in the autumn the board of Nottinghamshire and Derbyshire Local Enterprise Partnership, officially called D2N2 but otherwise known as a LEP, will meet to discuss its priorities.
While it has a lot of priorities at the moment, it has no budget and no full-time staff. So those priorities are going to be slimmed down.
There’s something else it is drastically short of, too: widespread support in the business community. Granted, some of the biggest corporate names have given it time (Bombardier’s Colin Walton leads the board), and Derbyshire & Nottinghamshire Chamber of Commerce chief exec George Cowcher has been its main voice.
But there are widespread concerns that the LEP has simply not penetrated the psyche of your average business in the two counties.
I know from conversations I’ve had with civil servants that there are concerns that the wider business community has not bought into the LEP concept on any level.
I’ve seen a report drawn up by consultants which also says there is evidence that businesses don’t ‘get’ what the LEP is about.
In an article in the Post on Tuesday, Glenn Crocker, the chief executive of Nottingham’s BioCity, will say that many see the LEP as a “toothless irrelevance”, though he also says very clearly that he does not believe it should be written off.
There are three problems here.
One was identified by George Cowcher himself: businesses have got to wake up to the fact that the days of the East Midlands Development Agency, which had £150m a year to spend on the regional economy, are dead and buried. Businesses, organisations and sectors which relied on an emda funding stream have got to stand on their own two feet; there will be no grants to chase.
Mr Cowcher also tacitly admitted the second: the LEP needs to work much, much harder at raising its public profile. The £50,000 odd it has been given by government to support the development and maintenance of economic data is all well and good, but what purpose does it serve when the LEP is largely silent between board meetings?
The third is the contradiction at the heart of government economic policy. It wanted rid of emda because, in addition to wanting to save money, it did not believe a government agency should be leading business by the nose. Its view, which does make long-term economic sense, is that a sustainable economy is built around businesses which grow naturally.
But, as we’ve already seen, the central message from the organisation which has stepped into this void boils down to this: ‘We’re not emda’.
And if the mantra now is that businesses should help themselves, why will they vest time and money in the LEP? Look at what happened in the first round of bidding for the Regional Growth Fund (what was that about the death of regional economic policy?): one Notts business, Molecular Profiles, secured funding by making a bid itself. Not one of the 38 bids from the LEP - a body set up by government - was accepted by that government.
That may be because the local authority economic development people who give their time to the LEP were stuck in an emda mindset, wanting money for infrastructure, buildings and projects when the government was looking to back businesses creating jobs quickly.
The same problem cropped up in other LEP areas. So why was the process allowed to go so wrong for so long? All it has done is eat away at potential enthusiasm for the LEP concept.
The consultancy report I referred to earlier does make a powerful case for the existence of an organisation which furthers cross-county economic development activity and whatever government thinks about regional policy, it does believe business should have a powerful say in that.
Whether you feel strongly about government intervention in the economy or not, it seems common sense for businesses and local authorities to talk about what’s happening to the local economy, and for them both to make decisions based on solid evidence about the size and shape of the commercial landscape they operate in.
If the LEP is to mean anything, then it needs to be much more visible. It needs to hold events, to talk publicly, to get in the face of government, to produce the odd report – albeit within a sharply focused brief which avoids duplicating what other bodies already do.
There is another event in the autumn which could prove pivotal for the future of the LEP. It is the day when Government announces the results of the second round of bidding for the Regional Growth Fund (and don't ask when because no-one knows yet).
This time, £900 million is available across the country, and I know the LEP has made some hefty bids related to both business support activity and the tourism industry.
If those bids succeed, then the LEP has its sense of purpose.
If they fail again, then it’s surely back to the drawing board - for the Government as well as the LEP.

EU couldn't make it up

My phone rings. It is someone-or-other from the European Union.
Am I interested in a story about how much the EU will be spending in our region up to 2020 and would I like to talk to people about how they are going to spend it?
Of course - there could be some opportunities for local businesses in this. So a chance to look at how the money would be spent locally would be great.
It's never that simple with the EU, though.
To find out about how money will be spent in the East Midlands, they want me to go to a three-day event.
In Brussels.
"But if you're spending money locally, wouldn't it be better to talk to someone here, on the ground, to see where it will be spent?"
Bafflement. Silence follows.
"So it is best I say you are not interested in the story?"
No, I'm definitely interested, I said. But I explained that I couldn't spare three days for one story, never mind one in Brussels.
This did not compute. How could someone not want to go to Brussels...to speak to Commissioners...at an event?
I did think about throwing something in about the irony of a story about a local initiative being done abroad, but it would have been lost in translation between one version of English and another.
In any case, we were clearly inhabiting different universes already.
"OK...so you can't do the story."
"Yes, I can do the story but can we not talk to someone here or over the phone?"
"Erm...it's for this event...OK we leave it there."
C'est la vie.

Sickies, slackers and an Age of Entitlement?

Business has never been easy, but these days it is punishingly tough. In many companies there are fewer people doing more and more, and increasing costs eating away at standstill prices.
While I’m on the cynical side of when-the-tough-get-going strategies (because that’s what you should be doing anyway), there’s no question that work these days is about working harder and longer without additional reward. Can it be anything else in this climate?
Apparently it can. There’s a suggestion that at least a few people think a four-day week, cruising through the day and dashing for the door at 5.30 are all you need to do to bring home a good wage.
Who are they? According to George Cowcher, they are our future. What the chief exec of Derbyshire & Nottinghamshire Chamber is referring to is a generation of kids, some of whom seem to think that work means money for the taking.
Now, I normally take a pretty sceptical view of those who shake their head and mutter dismissively about ‘the young people of today’ or suggest it wasn’t like this in my day etc.
But George Cowcher isn’t that kind of bloke, and he was referring to the hard evidence consistently flagged up in a survey of small businesses in Nottinghamshire and Derbyshire.
His starting point was the continuing puzzle of consistently improving exam results versus the consistently poor standards of literacy and numeracy displayed by people who turn up for job interviews.
That, he believes, may be down to the generation of kids who went through schools before a heavy emphasis was placed on those key skills. Exam passes are one thing, practical everyday skills another.
But the apparently poor work ethic is less straightforward. According to Mr Cowcher, at its worst this manifests itself in people who think it’s OK to throw sickies on Mondays because they’ve overdone the pop at the weekend. But it also extends to graduates who think a degree is the automatic route to a handsome pay packet…even when they can’t keep a phone conversation going and rely on a Word spellchecker for their communications skills.
“It is surprising in this climate,” he told me. “But there is a cohort which doesn’t see work as the major driver in their life and wants something for nothing.”
There is a debate here to be had about whether a decade of economic growth, easy credit and the rise of the consumer economy has led to an era of entitlement, an age when people grow up thinking that a high standard of living is something you are entitled to rather than something you have to work your socks off for.
It may be that we’re going through a period of adjustment, and those that go through the educational system from 2007 onwards will emerge with a more realistic expectations about the relationship between rights and responsibilities.
In my experience, there have always been people who think the world owes them a living and moan loudly when it isn’t served up on a plate. And debates like this have a habit of occurring in cycles.
But you can also criticise individual businesses for the way they took their foot off the gas - and their eye off the ball - during a bubble that was never likely to last.
The surprise for me was someone like George Cowcher – an experienced operator who usually chooses his ground very carefully – delivering some unequivocal criticism.
Does he have a point?

John Lewis: Unknowingly undersold?

I was in John Lewis in the Victoria Centre a few days ago splashing out on a new TV (bigger, better picture quality, can connect to the interweb).
I’m no technophobe, but neither am I a technophile and I like to know that, whatever I’m spending, I’m making the right decision.
I seemed to be heading in the right direction thanks to a young assistant who came over, asked me if I needed some advice and identified the TVs in my range which offered better picture quality. He went off to check stock and look at delivery options, so we were on the verge of a deal.
Only it turns out he didn’t work for John Lewis.
I discovered this from another assistant who came over to respond to the delivery query. His opening gambit: “Can I just ask what exactly you were looking for as he isn’t employed by us and he shouldn’t have been talking to you about televisions?”
The scenario isn’t quite as disturbing as it might sound, but it does throw an interesting light on the way retail sometimes operates.
The young ‘assistant’ actually worked for a company selling TV sound systems (which explained why he had started talking about an iPod dock) which had been given time to demonstrate and sell its wares on the John Lewis technology floor.
But he was on the verge of selling John Lewis short and leaving me with a TV which wasn’t actually the best option. The assistant who took over (an experienced old salt who knew what he was talking about and explained things clearly and convincingly) steered me in the direction of a TV which was £250 more expensive – but, technologically, far better. So, in the end a result.
What I found disturbing was not so much the fact that I got collared by someone who had no authority to sell me anything, but that it had happened in a shop where trust is a central part of the sales proposition.
The selling of particular products by people who work for the manufacturer or agent rather than the retailer isn’t unusual – you see product or franchise concessions in loads of stores. But it has to be flagged up – I thought my needs were being met with a product recommended by someone from John Lewis but that wasn’t the case and I wasn’t told. So something, somewhere went wrong.
I like John Lewis a lot. It remains a standard-setter on the high street. To borrow a catchphrase, in this case John Lewis itself was – nearly - unknowingly undersold.

Retail: What will it take for independents' day to happen?

A shattering silence on this blog for the past couple of weeks because I’ve been up in Northumberland on holiday. There was a shattering silence there, too – in all sorts of ways.
While the rest of Britain was (I’m told) gripped by the riots frenzy there was a smashed window at a small police station somewhere near Sunderland and, er, that’s it.
I stayed in the middle of nowhere a few miles outside Alnwick. Beautiful rugged countryside, so dark only a couple of lights were visible in the distance at night, while the only noise was the distant hiss of tyres from a road up in the crags and the sheep being driven into a different field. Bliss.
It took me a few days to get used to the total absence of an internet connection and an intermittent mobile phone signal, though. But they were an early clue as to why this – and other parts of Britain - remain unspoilt.
The biggest clue was in Alnwick itself. It’s an attractive market town just off the A1 whose major draw is the Castle, where some of the exteriors for the Harry Potter movies were filmed. It’s also the only town of any size for miles around.
What struck me was how few national retail fascias there were on its main shopping streets. Yes, there was a WH Smith, a Boots, a Dorothy Perkins a Morrison supermarket and, outside the centre, a Sainsbury superstore.
But its main retail pitch was nearly all local – a butcher, a hardware store, a kitchenware and furniture business, an estate agency, the usual charity shops, a couple of pubs/bars, the odd local country clothing/fashion store, some gift/trinket shops. There is also Barter Books, which is a story in itself. A clone town it ain’t.
Is that a good or a bad thing, though?
Well, there’s been an ongoing debate about the loss of independent retailers and the dominance of national chains serving up the same flavour wherever you go. Indeed, a government-ordered review into this very subject is currently being carried out by Mary Portas, the former Harvey Nichols branding director who found fame as TV’s Mary Queen of Shops, advising independent retailers.
She’d find plenty to occupy herself in Alnwick. Some of the independents were excellent (notably the butcher, which does a damn fine pie). Some weren’t and they clearly lacked either turnover or imagination (or both).
What that translated into was that there was no compelling reason to go to Alnwick and shop for the sake of a browse and a casual purchase. The independents did not serve up the range or the consumer experience that national chains do.
I’m guessing that the national chains will tell you that the demographic data of a community as sparse as rural Northumberland simply doesn’t stack up for them. They’d ask you to hop in the car and drive down to Newcastle or hop on the train up to Edinburgh if you want the full-on shopping show.
Was my experience that of city people tragically hooked on shopping not knowing what to do? No – it was a story about the way the economy works. Major retailers need big catchments with a good wodge of money within a short drive. If it isn’t there they won’t come.
The independents who do set up shop would need to be very savvy to make good money – especially in a town like Alnwick, where tourism makes demand seasonal.
Yet they clearly survive, and there were few empty shop units that I could find.
Could the debate about independent shops learn something from a place like Alnwick? May be – but I’m not sure it’s an entirely optimistic message.
None of the independents were what I’d call indulgence shops. They were in the main places where you go because you need something. The only independent which you could really call a magnet – Barter Books, the book swap-shop housed in an old railway station – is unique, almost a national institution.
Alnwick’s independents survive because there is little competition. They are small-scale enterprises which didn’t look like they made a lot of money and they benefit from being in the only sizeable centre for miles around.
Tellingly, I suspect that the one Sainsbury store on the edge of the town employs more people than a dozen of the independents in the centre.
This isn’t an argument in favour of big retail – national chains are one-size-fits-all operations who have questions to answer about their treatment of supply chains and their regular failure to invest in great service.
But their absence doesn’t guarantee an alternative high street full of brilliantly run or endearingly quirky independents with a distinctive regional flavour. Some of the shops I saw were either utilitarian or just off the pace.
Good retailing is a mix of good products and great service coming together to provide value, and that doesn’t have to be the preserve of big national chains. But it would take a clever, committed and resourceful independent to meet those criteria.
Are they out there? I'm not sure. And the irony underneath this article is that it was drafted while sitting in Alnwick's newest retail arrival - Costa Coffee...

An Irish saga at Southreef

You’ve heard of planners bringing development to a halt, but a foreign government?
We haven’t had confirmation, but it looks like that’s what happened with Southreef on Canal Street, which may be in the running for the prize of Nottingham’s longest-running development saga.
A £30m mixed-use scheme which occupies a prominent pitch in the city’s prized Waterside zone, it features a mix of apartments, offices and other commercial space.
Or it will do when it’s eventually completed. By any measure, Southreef was an ambitious landmark on an important route into the city centre and it ticks many of property’s most important boxes with ease.
Timing isn’t one of them, though. First unveiled in 2005, it finally got underway in 2007. 2007 was, of course, property’s annus horribilis, the year when a tidal wave of mortgage defaults pulled the rug from underneath any investment in bricks and mortar.
The problem for Southreef lies not in the design or the developers, all of whom have long-established track records round here. It lies with its backers, over-extended Irish banks who eventually had to accept bail-outs from the Irish government…in return for security in the shape of some of the assets they had title to.
These passed into the hands of Ireland’s National Asset Management Agency (based, ironically, in Grand Canal Street in Dublin). Which is why an unfinished landmark in Nottingham has, arguably, been at the beck and call of the Irish government.
Administrators were called in to take over Southreef Properties, the business responsible for trying to finish the development, last week. One assumes that’s because no more money has been forthcoming from Ireland.
It won’t stop the development being completed. Southreef is already earning money from high quality office occupiers like Crytek and tenants inside its apartments.
Southreef will be a great development when it’s eventually finished, as it will be. Just as it may be a while yet before that happens, so it will be sometime before it shakes off its undeserved status as an outpost of the Irish economy.

What those customer services letters really mean...

I’ve been shaking my head in pity at Simon Dare’s vain attempts to get Virgin Media to wake up out of its self-satisfied slumber and realise that when it asks customers for their opinions it might not be a bad idea to turn its ears on.

It’s not fair to single out Virgin Media, of course, because I think we all know that the one area where consumer-facing businesses are always consistent is in being pretty crap at customer service.

It doesn’t matter whether it’s the customer satisfaction surveys, the complaints handling or the new product roll-outs, this is what they really meant to say in that welcome letter...

Dear [insert your misspelt name here]

After carefully considering our own views, we’ve concluded that one of the best ways to continuously improve our business is to continuously empty your pockets (again).

Accordingly, we’ve decided to make a series of changes to your service which will make it cheaper for us to deliver it. That, of course, means that we will have to take a load more money off you.

These clear and simple amendments, which won’t make any difference to anything we do, are explained in the enclosed 96-page booklet of completely impenetrable terms and conditions.

We’re sure you agree that any ideas which improve service will make your life easier. If you can think of any, please tell our customer services team, because they’ve been a bit busy recently trying to flog you something.

If you have any queries about the changes we haven’t made, don’t hesitate to use our new, 13-stage process for getting in touch. Our advisers are always available to talk to you, as long as you call our premium-rate 0845 number, at an hour to suit you – specifically, 3am to 4am on the 12^th of Never.

If you have any additional comments about our service, please tell a mate down the pub.

Assuring you of dim-witted indifference,

Mr Illegible Signature

Head of Customer Response Analysis Programme

[C.R.A.P]

http://www.we’rebigandwe’velosttouch.com/