A stagnant economy, the newly formed Labour Market Advisory Board, plus tackling cyber crime
The latest data shows that the UK economy remains stagnant, we let you know what the newly formed Labour Market Advisory Board means for your business, plus the latest plans to improve cyber resilience.
UK economy flatlines again
Figures released by the Office of National Statistics last week show that the UK economy showed no growth in July 2024. This is the second month in a row as there was also no growth in June.
However, looking at the three months ending in July, Gross Domestic Product (GDP) – a measure used to assess the economy – has grown by 0.5% when compared to the quarter ended in April.
The figures suggest that the economy is facing a period of stagnation after the growth and optimism we saw earlier in the year.
What does this mean for your business?
Oftentimes the GDP figures simply confirm what you have already been seeing, but what could these indications about the wider economy imply for your business?
- Cautious consumer spending: No recent growth in GDP could indicate that consumer confidence is wavering. This can lead to reduced spending, particularly on goods and services that are viewed as non-essential. Businesses in retail, hospitality and non-discretionary sectors may be particularly affected.
- Cash flow pressures: Businesses often rely on steady growth to maintain their cashflow. If sales slow it can make it more challenging to manage cashflow, especially for businesses that have narrow profit margins.
- Investment hesitation: The signs of stagnation may make businesses hesitant to invest in expansion, new hires or capital improvements. If you are a b2b business, you may find it tricky to get customers to commit to projects and need to consider what incentives you can offer to get a sale over the line.
- Potential for government support: If stagnation continues, the government may introduce measures to try and stimulate the economy. These might include tax reliefs or grants. Whether or not these could be helpful will depend on the specific measure proposed.
- Sector specific impact: The figures behind July’s headline GDP rate suggest that the services sector remains relatively consistent with a 0.1% growth for the month, whereas production output decreased by 0.8% and construction output dropped by 0.4%. It could be worth considering whether this provides any opportunities for your business. For instance, if you have suppliers who are noticing a drop in orders, now may be a good time to see if you can negotiate a more preferential rate.
- Supply chain risks: At the same time, if reduced demand or fluctuating costs are affecting your suppliers then this can impact on the security of getting the supplies your business needs. Having good communication with your suppliers can be helpful so that you can pick up on early signs of potential issues or price increases. This will help you to prepare for changes or may signal a need for you to diversify with the suppliers you use.
- Competition and market dynamics: If the market is slowing down and stagnating, competition can increase as businesses fight over a limited pool of consumer spending. Prices and margins can be driven down as a result and make it harder for businesses to stay profitable.
Overall, the lack of growth in GDP suggests that you will need to be cautious and strategic over the next few months. A focus on efficiency, customer retention, and maintaining your financial flexibility may be needed so that you can weather any potential downturns.
Up and down turns in the economy are an inevitable part of business life, but as experienced business advisers we know how to chart a path that can help your business continue to thrive and grow. Please feel free to contact us at any time to see what help and tools we can provide you with.
See: https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/july2024
New Labour Market Advisory Board: What it means for your business
On Monday, 9th September, the newly formed Labour Market Advisory Board, appointed by Work and Pensions Secretary Liz Kendall MP, had its first meeting. This board is no ordinary group—it’s a collective of experts drawn from business, industrial relations, and academia, all focused on tackling what’s being called the “greatest employment challenge for a generation.”
What’s the big issue?
The UK is facing a significant employment crisis. It’s the only G7 country whose employment and inactivity rates haven’t bounced back to pre-pandemic levels. Nearly 2.8 million people are currently out of work due to long-term sickness, which not only affects individuals and families but also has a knock-on effect on businesses and the economy at large.
What’s the board’s role?
The Labour Market Advisory Board is tasked with developing new ideas and initiative for the Work and Pensions Secretary to consider.
At the first meeting, the new approaches were discussed, including how to tackle the underlying problems that keep people out of the workforce, such as poor physical and mental health. The Board also looked at how to help the government achieve its ambitious goal of an 80 per cent employment rate.
What could this mean for businesses?
- Localised Approaches to Employment: There are hints that a White Paper to be published this autumn will show that the Secretary of State plans to devolve power to local areas, enabling them to tackle inactivity with tailored work, health, and skills plans. This could mean more localised support for businesses, with strategies designed to address specific regional challenges.
- Overhauled Jobcentres: Plans are in the works to merge jobcentres with the National Careers Service. This could lead to more streamlined services, helping businesses to find skilled workers more easily.
- Youth Employment Initiatives: The same White Paper is expected to include plans for a new youth guarantee for 18-21-year-olds. If your business has been struggling to attract young employees, this initiative might offer new opportunities.
- Focus on Health and Well-being: With the Board’s focus on addressing the impact of ill-health on economic inactivity, we might see new initiatives aimed at improving workplace health and well-being. This could benefit businesses by reducing absenteeism and increasing productivity.
Why Should You Care?
While it’s difficult to know at this stage how the government’s plans will actually affect day-to-day business life, changes to recruitment and training, employee well-being and productivity all have the potential to affect your business. Therefore, it pays to be aware of what’s happening in these areas, especially as changes can provide new opportunities for growth and development.
SIA Changes: New requirements for door supervisor and security guard licences
Businesses providing security services and holding SIA licences need to be aware of changes affecting door supervisor and security guard licences.
Starting from 1st April 2025, anyone renewing these licences must complete a mandatory ‘refresher’ qualification. The refresher training will be available from 1st October 2024.
Key requirements:
Before taking the refresher training, employees and others must have a valid Emergency First Aid at Work qualification (or equivalent). This qualification must be presented to their training provider when they are registered for the course.
Options for Door Supervisors:
For employees that hold door supervisor licences there are two options:
- Renew their door supervisor licence by completing the door supervisor refresher training.
- Switch to a security guard licence by taking the security guard refresher training.
Whichever option is chosen, an Emergency First Aid at Work qualification must be held before the refresher training can be taken.
These changes come on top of a number of changes that have been made over the past few years. For further details about all the changes, see: https://www.gov.uk/government/news/changes-to-the-training-you-need-for-an-sia-licence
New cooperation announced to tackle cyber crime
The Information Commissioner’s Office (ICO) and the National Crime Agency (NCA) have announced the signing of a Memorandum of Understanding that details how the two organisations will cooperate to improve the UK’s cyber resilience.
The aim is that their working more closely together will help organisations and businesses across the country to have better protection from the activity of criminals who steal data and hold it to ransom.
The Memorandum confirms that the ICO will encourage organisations to report cyber crime to the NCA at the earliest opportunity.
They will also share information about cyber incidents with the NCA on an anonymised, systemic and aggregated basis. Where appropriate, they will also do so on an organisation specific basis to help the NCA protect the public from serious and organised crime.