Official labour market statistics were published earlier today by the Office for National Statistics and Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD) said, “The mixed picture of the UK labour market conveyed in the latest official figures offer room for both optimism and pessimism. The headline rise in unemployment suggests that the labour market weakened at the turn of the year, well before the impact of the Coalition Government’s spending cuts and tax rises start to take full effect. Indeed, figures showing that public sector employment had already fallen by 123,000 in the year to December 2010 suggest that the eventual cull of public sector jobs by 2015 could be considerably higher than current Office for Budget Responsibility estimates suggests. However, figures showing more people in work in the private sector, including in manufacturing, and fewer on welfare benefits offers hope that the labour market might withstand the economic headwinds better than previously expected.

“On balance the latest jobs figures probably offer more to the optimist than the pessimist, and indicate that the labour market is nowhere near suffering any kind of meltdown. Nonetheless, at the start of 2011 the CIPD cautioned that the official jobs data would be difficult to interpret in the first few months of the year since our own independent survey evidence showed a pick-up in demand for labour toward the end of 2010 followed by a further dip in the first quarter of this year. For the time being therefore the CIPD still expects headline unemployment to reach 2.7 million by the end of 2011 and continue to rise into 2012.

“On the theme of caution, the CIPD repeats its call from earlier in the week for commentators to acknowledge the distorting effects of 16-24 year olds in further and higher education on the headline rate and level of youth unemployment. 1 in 8 young people in this age group are unemployed and almost 30% of those classified as unemployed are full-time students. The UK is experiencing a serious youth unemployment problem which requires an appropriate policy response but talk of a ‘lost generation’ of jobless young people does not aid sensible debate over possible solutions.”

Clydesdale Bank’s Mergers in the Not-for-Profit Sector event will take place on Thursday, March 3 between 2pm and 4pm.

Senior executives involved in the not-for-profit sector are being encouraged to join the call to discuss the funding of mergers, what affect these have on their organisations, and why some in the sector are feeling the strain while others are making the most of opportunities that are now presenting themselves.

The event will be hosted by Brian Colquhoun, regional director of Clydesdale and Yorkshire Banks, and include various guest speakers.

For details, call Nick Broome in Clydesdale Bank’s Peterborough Financial Solutions Centre, on 01733 882720.

Stewart Jackson (left), MP for Peterborough, told the Evening Telegraph: “There are lots more people here who want to set up their business in the city than, say, in the north west. It’s been a tough two or three years with a recession which has made it difficult.”

The number of personal insolvencies in Peterborough went up from 2,099 in 2009 to 2,293 last year. The figures were published in a report from finance firm RSM Tenon.

Iain Crighton, chairman of Peterborough Chamber of Commerce, also saw a silver lining. Speaking to the newspaper, Mr Crichton said any redundancies, combined with the city’s entrepreneurial spirit, could see a boom in start-up business in 2011.

“Any job losses are sad and from a personal point of view it is a tragedy, but every cloud has a silver lining,” he said. “You often find people who lose their job from the public sector have wanted to set up their own business and their redundancy package can help them do that. If there are job losses in the public sector then hopefully we will see a raft of new businesses set up in the city. Hopefully the new businesses will create jobs.”

When the VAT rise to 20 per cent hit (on January 4), an FSB ‘Voice of Small Business’ panel survey showed that just under three-quarters (71 per cent) of the 1,600 respondents expect the rise to not be beneficial to their business.

A further 52 per cent expect to increase prices, 45 per cent expect a fall in turnover, and 36 per cent expect a loss of customers as a result.

Amrita Parker, Peterborough branch chairman, Federation of Small Businesses, said: “Small businesses have had a tough time in 2010, especially towards the end of the year, when what should have been a very busy time as people make purchases before the VAT increase, but the busy Christmas period was hampered by heavy snowfall and severe weather.

“These figures show that almost half of respondents are going to have to increase prices as a result and 45 per cent think it’s going to decrease their turnover – neither of which will help small firms take on more staff.”

The chancellor has said that this rise is here to stay to deal with the structural deficit. The FSB is urging the chancellor to review the increase when the deficit has been significantly reduced and to return it to 17.5 per cent.

Small firms will be hit hard by the rise in VAT as, unlike big businesses, they can’t absorb the increase. This will mean that small firms will have to pass the full cost on to customers, reduce stock levels or find cost savings elsewhere – potentially costing jobs and undermining the government’s private sector led recovery, according to the FSB.

It has been calling on the government to help alleviate the stresses and strains on hard hit firms’ cash-flow by increasing the threshold at which they begin to pay VAT, from the current rate of £70,000 to £90,000. This has the potential to create up to 35,000 jobs and help small businesses when they need it most, the FSB claims.

Mr Parker went on to say, “If the government truly believes that the private sector is going to strengthen the recovery we need to see action. Increasing the threshold at which companies have to register for VAT will put almost £900 million back in the pockets of small businesses. Without this small firms will struggle to bounce back as the spending cuts start to bite.”

Simon Chaplin, director of Peterborough accountants GreenStones, said, “We all know that the government had to act. Nevertheless, in seeking to cut our deficit faster than anywhere else in the world at such a fragile stage in the economic recovery they are gambling on an unprecedented scale. Essentially they are betting on businesses in our region, and elsewhere, digging the country out of the hole by filling the gap left by the £81bn in cuts and 490,000 job losses. And that is undoubtedly a very big ask.

“If the country is going to avoid the devastating effects of losing that bet, businesses in our region are going to have to step up to the plate by becoming more successful so that they create more demand, more jobs and more wealth. And that means that local entrepreneurs must leave no stone unturned in their drive to become better at everything they do. Simply repeating the past won’t be good enough. Businesses must innovate. They must test new ideas and actions. They must measure how well those innovations work. They must build on the things that are proven to work best, and they must stop doing the things that don’t work so well.

“To play our part in ensuring that the country wins rather than loses, [here comes the plug – ed] GreenStones is offering a free Business Builder meeting to any of the region’s businesses. The meeting will help them discover new ways to create more jobs, profits and wealth, and turn them into an improvement action plan so that things really do get better.”

Neil Darwin, director of economic development at Opportunity Peterborough, said, “Yesterday’s spending review is something of an anti-climax for Britain’s businesses and local economies. The cuts we know about are as severe as expected, but there is still a huge amount of detail lacking as to exactly where and how they will fall in the towns and offices around the UK.

“What we do know for sure is that the loss of nearly half a million public sector jobs, a move to ‘modest’ capital investment in social housing funding and the curtailing of welfare benefits across the board will put a major stranglehold on our regional economies. For cities like Peterborough that have significant economic and sustainable development ambitions, attracting inward investment and maintaining growth will now be an uphill struggle. Unlike our larger counterparts – Manchester, Bristol, Birmingham and indeed London – we have a much less resilient and established private sector base to counteract the loss of public sector spend and face a potential chasm in infrastructure funding unless we can look at innovative sources of income and make best use of assets across the whole public sector.

“Clearly, there will be economic fall-out at a local level and belts will have to tighten, but whilst the austerity measures may stem our growth ambitions they do not quell them entirely – we just need to be realistic. The good news for Peterborough is that we still boast a low cost of living combined with a high quality of life, housing will remain relatively affordable compared to the wider region and the growth of emerging sectors in the region should give us immunity against the worst of the cuts. The environment sector in particular – which is so prominent in Peterborough’s business landscape – seems to be one of the few winners in this review with the creation of a Green Investment Bank and further funding for wind power investment.

“Staying committed to sustainable and economic development in the coming years and months will be tough, but we like other vital, local economies across Britain, must be sure to grow, not slow in the austerity aftermath or risk being overwhelmed by it.”

Keith Hamilton, head of external affairs for EEF, which represents manufacturers in the east of England, said, “There will be some relief for manufacturers that the cuts were not as bad as feared, with some positive announcements in the protection of the science and education budgets and support for low carbon technologies. The private sector will have to play a much bigger role in the future of the economy and while the statement showed that the Chancellor understands the areas on which to focus, we now need the detail of how we are going to get there.

“However, for companies the suspense is not yet over and they need clarity on the government’s strategy for growth and, in particular how it will work with the private sector to leverage investment. Industry has already started to increase its investment but this will only be sustained if the government sets out a clear framework for the longer-term.

“We welcome the commitment to apprenticeship funding and high level skills training but, as with many areas of government spending, this needs to be matched with reform to deliver a responsive skills system that is built to last.”

“Industry will welcome government investment to support carbon capture and storage and the development of low carbon industries in the UK. However, the current level of funding for the Green Investment Bank will not deliver the private investment necessary and we still need greater clarity on the Bank’s remit.”

“The extra money for the Regional Growth Fund will also be critical in funding important investments in our infrastructure but industry will need clear guidelines as to how it will operate and how funds will be accessed.”

Graeme Leach, chief economist at the Institute of Directors, said, “There is far too much negativity around the spending review. It is not the end of the world, far from it. We know this because of two important fiscal lessons from the 1990s. First, between 1991 and 1997 public sector employment fell by 600,000 - roughly on a par with the falls projected as a result of the spending review – but this did not prevent a sustained upturn in economic growth. Second, over the 1997-99 period fiscal tightening resulted in public spending falling sharply as a proportion of GDP, but this did not prevent the economy recording its fastestperiod of growth over the past 20 years.

“The economic backdrop to this fiscal tightening is clearly weaker now than in the 1990s, but this merely suggests that GDP growth won’t rise as much as then. It does not lead to an automatic conclusion that the public spending squeeze will trigger a double-dip recession. In the long term spending cuts will be positive for economic growth. Tax rises would damage the economy in both the short and long term.”

In August, 4,953 people in Peterborough were claiming Jobseekers Allowance – a fall from 4,974 in July.

The figure also represents a drop of more than 600 from the same time last year.

Twenty-five jobs are being created at clothing store Republic, which announced it would be doubling the size of its Queensgate store, due to open this month.

Wholesale business JTF Trade and Business Warehouses said they could create 40 positions in the city, with the new store possibly opening in the autumn.

• Overall, local base salaries have increased two per cent from last year.
• Secretarial and admin staff have received the greatest increase on average – five per cent.
• When considering specific roles, call centre advisers were the biggest winners with an average increase of 10.3 per cent.
• 37 per cent of organisations report that they differentiate holiday entitlement by seniority and level – significantly more than last year’s survey when only six per cent reported a differentiation.
• Consistent with last year’s findings, those working in jobs coming under the store, warehouse and production classification continue to be the worst affected.
• 71 per cent of organisations offer private medical insurance. Of these, 41 per cent offer it to all of their staff.

The survey shows that manufacturers in the region are continuing to enjoy good trading conditions on the back of strong demand in overseas markets, pointing to solid prospects for growth for the rest of the year.

Among east manufacturers:

• 78% reported stable or increasing total new order volume
• 72% maintained or increased total output
• 74% recorded stable or stronger export markets

Greater confidence across the sector is also continuing to translate into some recruitment, albeit anecdotally this is being driven by temporary or agency working which will give employers flexibility should demand begin to slow.

Uncertainty about future demand had been dampening investment plans, but a number of sectors are now planning to increase in investment.  The positive investment intentions posted this quarter breaks the pattern of previous recessions by recovering at an earlier stage in the cycle.

However, the short-term optimism highlighted by EEF’s survey is shaded with a degree of caution about the risks to growth in 2011.  As fiscal consolidation really gets underway in the UK and others follow suit, together with the weaker outlook for the US and risks to the sustainability of Asia’s growth path, the recovery could yet falter.

Keith Hamilton, Head of External Affairs for EEF in the east of England, said, “Those regional manufacturers with overseas markets have continued to reap the rewards of continued growth in demand over the last three months – Europe in particular turned out to be stronger than expected.

“However, we have to maintain perspective that the recovery is coming from a very low base and the risks to the economy in the medium term haven’t gone away. The rebound in exports and modest improvement in investment will need to become much more firmly entrenched if we are to see a much-needed rebalancing of the economy.”

Tom Lawton, Head of Manufacturing, BDO LLP, said, “Currently manufacturing seems to be one of the UK economy’s success stories, though the spending review casts a looming shadow on all sectors. If the coalition is to effectively rebalance the economy, it must put manufacturing and its exports at the centre of economic strategy for the foreseeable future, and UK manufacturers should exploit opportunities where they can best compete – in innovation, R&D and customer service.

“We still hear stories about the difficulties of access to credit, particularly for mid sized manufacturers, so targeted funding from government is to be welcomed. But equally important are appropriate taxation, education, skills and research policies which will position the sector as a key part of the economy and provide the right framework for growth.”

Nationally, the survey was also notable for two other factors. Firstly, the
balance of companies recruiting almost doubled in the last three months to +17%, the strongest in the survey’s history.

Secondly, the investment balance turned positive to +7% for the first time since 2008q2. Compared with previous recessions, where investment balances have tended to lag behind increases in output by over a year, this is a somewhat faster recovery in capital expenditure intentions and signals that companies are becoming more confident to begin investing in plant and machinery.

Looking forward, expectations about future prospects remain positive, with a balance of 27% of companies expecting output to increase in the next three months, and 22% expecting orders to expand. Both of these balances are higher than the previous quarter’s figures suggesting there is confidence that the recovery will continue into the next quarter at least.

EEF also published its latest forecasts for the UK economy and manufacturing. These show the economy growing by 1.5% and 2.1% in 2010 and 2011 respectively whilst manufacturing will grow by 3.7% in 2010 before easing back slightly to 3.2% in 2011.

More than 40% of businesses identified an enlarged workforce as the top priority, given a more flexible approach from their lender, followed by acquisitions and mergers, and expansion of their premises (both 26%).

The research also found that nearly half (46%) of East of England businesses plan to reinvest at least 6% of turnover back into their business for commercial growth next year.

One in five companies (20%) plan to invest more than 10%, although nearly a third (29%) said nothing had been earmarked for growth.

The survey found that most businesses had delayed either salary increases (45%) or recruitment (37%) in the past year because of the economic climate.

Martin Guildford, managing partner at Clydesdale Bank’s Financial Solutions centres in Cambridgeshire, said: “From the research it is clear businesses are telling us that their investment and capital expenditure plans remain uncertain over the next 12 months. The decision of when and how much cash to invest back into a business is very important. These results indicate that the majority of businesses are planning a relatively conservative spend in the next 12 months.”

The research showed that a third of businesses (32%) in the East of England cited a lack of cashflow for delaying investment in the past year. A further 30% spoke of the perceived financial risk in the current climate and another 26% deemed the preservation of working capital as more important.

One in four (25%) said a more flexible approach by their bank would allow their business to take advantage of growth opportunities in the next 12 months.

In response to customer demand, Clydesdale and Yorkshire Bank recently launched a new business support initiative – Investing for Growth – to help successful businesses grow and develop by easing their cashflow pressures. The initiative, which follows the banks’ October pledge to advance up to £10 billion of new lending over the next two years, offers both new and existing business customers a dedicated planning service and a more flexible approach to lending.

A new study by employment law specialists ELAS revealed that the average British worker spends as much as 8hrs 24mins at their office computer researching and booking their next holiday.

As well as spending extra time researching flights and hotels separately, extra tasks include printing off boarding cards, online check-in and booking extras such as transfers, car hire or travel insurance.

Peter Mooney, head of consultancy at ELAS, said those small tasks soon add up.

He said: “Most employers don’t mind turning a blind eye to workers using the internet for personal use as long as it doesn’t get in the way of their work.

“But eight and a half hours is the equivalent of an extra day of holiday for every member of staff.

“Aside from the sheer loss of productivity, employers need to be careful about setting precedents which could lead them open to charges of unfair treatment of staff as and when they say enough is enough.”

The cost to UK Plc of 243 hours of lost time – 8hrs 24mins for every one of Briton’s 28.98million workers – is a staggering £3.023billion.

Had those workers booked package holidays, and so spent a third of the time researching, the cost would have fallen to a still considerable £1.043billion.

ELAS surveyed 1,000 consumers from across the UK on how much time they spent at their desk researching their holiday.

The greatest time was spent choosing and booking hotels, which took the average holidaymaker almost 2½ hours.

A little over two hours was spent choosing destination, 1½hrs was spent selecting flights, while 57 mins was spent researching and booking extras.

A further 68mins was spent on “admin tasks” such as online check-in, printing off boarding cards, printing directions or booking excursions.