Essex County

Regional Growth Plan

January 2011
Contents of Report

1.11 Lending to SME’s in the East of England

1.12 Credit Unions and Lending Co-Operatives in the East of England

1.21 Regional Alliances and Mutuals in the East of England

1.22 The Future of NHS Care Trusts in the East of England

1.31 Changes to Regional House Prices in the East of England

1.32 Welfare-to-Work Programmes in the East of England

1.41 Local and Regional Benefits of Self-Employment in the East of England

 OBJECTIVE OF REPORT

The aim of the IB Recruitment regional growth plan report is to draw attention to specific strengths and
opportunities within regions of the country where there are partial or significant possibilities for community
involvement, start up enterprises and grass-roots organising in order to facilitate these opportunities in the
short and medium term. The report is in no way an attempt to summarise the economic viability of these
regions. For further information on this report please contact info@ibrecruitment.com.
 AN OVERVIEW
This preliminary report has been compiled for
public use and is a brief overview of progressive
micro-strategies to help support the efforts of
local government agencies and enterprises within
Essex and the East of England. The report has
been compiled by researchers at IB Recruitment
and reflects the findings found in relation to
unemployment and entrepreneurial and economic
growth.
OPPORTUNITIES FOR SMALL AND
MEDIUM SIZED BUSINESSES
1.11 Lending to SME‟s in the East of England
The area encompassing Hertfordshire, Norfolk,
Southend-on-Sea, Suffolk, Thurrock,
Cambridgeshire, Luton and Bedfordshire has huge
potential to facilitate the country‟s economic
growth. Within these regions there are numerous
leading universities and small business networks
which form one of the most entrepreneurial
clusters in Europe. These include both large and
small cap start-ups as well as university driven
spin-offs. More centrally, the growth of the
regions business cycle would be largely supported
immensely by private and public funding
opportunities which in 2007/08 produced lending
growth increases which equalled 16-17% year-on-
year. That figure is now 5-6% year-on-year.
From the recent figures released by the Bank of
England the overall amount commercial lending
to UK businesses and individuals decreased at a
rate of -5% for the entire last two quarters of
2010 (from July to December). Although the rate
of newly issued business loans is expected to
remain negative over the next quarter, the
important fact is that the creation of M2 and M3
capital is currently undesirable for many
commercial lenders as the default rate of new-
start ups has been within the 40-50% region over
the last 5 years.
1.12 Credit unions and micro-lending co-
operatives in the East of England
Part of the process of growth involves fostering
practical entrepreneurship and the creation of
profitable services, at the grass roots. With the
assistance of a local or community banking
project, the region may also benefit from a
reduction in the liabilities held by larger banking
institutions. This decentralisation of borrowing,
creates an additional layer of support. These
organisations can be controlled entirely by private
sector firms or in a joint shareholding
relationship. Support for these projects are
gathering sufficient momentum; a recent bill
proposed in Parliament suggested the intention
to form publicly funded credit unions within a
number of London boroughs, this can also be
supported by the work of new co-operative and
micro-lending facilities. Successful projects would
aim to build on commercial lending practices with
the use of smaller principal amounts, closer fund
management and more rigorous control of
repayment dates, often meaning smaller more
affordable instalments to businesses. This model
is flexible and can be more effective due to the
secured collateral relationships which are required
 OPPORTUNITIES WITHIN PUBLIC Sandwell Community Healthcare Services in
Birmingham demonstrates
SECTOR HEALTH CARE SERVICES
1.22 The Future of the NHS Care Trusts in the
1.21 Regional alliances and mutuals in the East of
East of England
England

Looking further forward, assuming there are no

Since the patient-orientated‟ NHS Plan of 2000,
barriers to entry with in the market for healthcare
which at the time reported five key elements with
services in the EoE; where PCT contracts would be
regards to a modern vision for health and social
open to free market competition from other
care systems, there have been several reports
private sector firms, the scenario is one which
each pointing to the stipulation that a rise in the
would undoubtedly empower NHS nurses,
popularity of social enterprises within the NHS
therapists, administrative staff and other public
would have a significant effect on the efficiency of
sector workers to contribute their services to local
public sector finances. In 2006, there were
subsidiaries. Looking further yet, Care Trusts in
approximately 55,000 social enterprises in the UK,
the area may indeed need to think carefully about
with a combined turnover of £27bn and a
a feasible long-term plan to integrate staff back
contribution of 1% of GDP. By 2010 that number
into the core NHS service, if and when the local
had risen by 12% to just 62,000, with less than 10
economy recovers to pre-recessional cycles.
of those businesses achieving a turnover greater
than £200,000.

It is of the utmost importance that the Essex

county NHS Trusts, as well as the other East of
England (EoE) Trusts, are provided with more
adequate intellectual resources to implement the
gradual changes, considering the imminent public
sector withdrawals. With a renewed focus on the
quality of care, a financially prudent and pro-
active strategy to alleviate a sharp increase in the
sector‟s unemployment would be for the senior
In general, the increase in non-profit tertiary
management and directors of EoE PCT‟s (as well
social enterprises in the UK have reflected a
as others located in nearby) to consider endorsing
increasing gap emerging between thorough
the not-for-profit mutual co-operatives as a more
planning and inadequate pragmatism. And if the
viable option for public sector workers.
benefits of curbing the public financial assistance
of regional care trusts are not outweighed by
Drawing attention to the examples of the NHS
their consequences, the result could very well be
heath centres in the Essex County, namely the
the sustained cyclical unemployment of public
Princess Alexandra, South Essex Partnership, BHB
sector staff in 2011.
Community Healthcare, NHS Mid-Essex and NHS
Basildon and Thurrock University Hospitals, which
The unemployment rate in the EoE region is 4.5%
account for a large proportion of the regions‟
which is currently below the national average of
publicly funded care trusts (PCT‟s), these
7.9% and is expected to rise by the end of 2010.
provisions have only been incorporated on a
partial scale. Although, the notably successful
 ANTICIPATED DEVELOPMENTS
IN LOCAL PROPERTY MARKETS

1.41 Changes to regional housing price in the

East of England

A good indicator of the regions economic

position, aside from the well-being of the private
sector, is the state of it‟s property market.
Although the monthly figure shows a 1%
“Overall we‟re still seeing home owners who have
nationwide decrease, since 2009, there was an
repayments that are exceeding the market value
average 1.5% year-on-year price increase in
of their home and the anticipated increase in
England and Wales. Essex County house prices
defaults will be the result of the poorest in the
were between 5% and 6%, which is reflective of
region being unable to sustain such repayment
increases in regions such as Colchester and
levels.” – Alfred Anate, Co-Founder IB Recruitment
Brentwood, as well as London. However, there
wass a relatively higher y.o.y rise in Castle Point,
Epping Forest and Rochford house prices.
Chelmsford is relatively unaffected and there still
Essex Property Index
maintains a proportionally higher amount of East of England Quarterly Property Index
housing starts within the region. The regions final
quarter ad valorem tax was 7.5
6.2
Within the Essex County, the upward price 5.2
3.8
increases reflect sustainable demand in the for 2.8
property in the local economy, the exception of
the Maldon and Heybridge Basin area, which saw
a marked decrease over the Christmas period.

There are several macroeconomic side-effects

which may be incurred during the course of the
first quarter of 2011relating to the overall demand
for secured home financing which is expected to -6.9
contract, this along with an anticipated increase in
the number of secured homeowner loan defaults. A risk for the region lies in the possibility that

According to the BoE‟s Credit Conditions survey during the course of the year, a double-dip

and it‟s Trends in Lending publication, the may cause reduced demand in house price,

evidence in support for this trend is significant. while inflation and interest rates remain high.
 UNEMPLOYMENT AND WORK supporting technologically driven enterprises is of
the utmost importance to IB Financial, we will
INCENTIVE SCHEMES
soon be creating a network forum through which
University technology entrepreneurs can channel
1.31 Welfare-to-Work Programmes in the their ideas & business plans to angel investors,
East of England with a view to obtaining valuable consultation. At
the University level, the East of England has a
According to figures from Reed.co.uk, there was a
wealth of Higher Education institutions which are
9% increase in vacancy advertisements to 104,
all capable of nurturing these business ideas
740. The „welfare-to-work‟ programme is a recent
when they emerge.
and notable investment in the region‟s increasing
unemployment problem as part of the
governments Work Programme. Figures for the
first 12 months of the so called „Flexible New
Deal‟ one of which is pioneered by organisations
such as Serco and Seectec (ongoing since
August/October 2009) shows a total of 16.5k
people were matched to new vacancies, for the
minimum duration of 13 weeks, at a total expense
of just over £500m; a large proportion (95%) of
The other alternative is for already established
which can b attributed to upfront service fees
tech companies to foster the development of new
which were contracted to private sector providers.
businesses. For instance, the Norwich-based
Overall the DWP statistics show a gross benefit of
service firm Proxama Ltd, and it‟s recent
£31.5k per job.
acquisition of an innovative but liquidated
Cambridge Science Park member firm, Hypertag
Furthermore, though there have been an increase
Ltd, is a prime example of vertical integration
in the number of vacancies advertised in January,
which can result in a mutually beneficial
the average salary (£33, 039) has declined by 1%
enterprise that has both a broader scope and
in real terms since December 2010, indicating
greater intellectual property at it‟s disposal. Where
some evidence of sticky wages, which may be a
possible, usually amongst private limited firms,
concern going forward. However, the horizontal
these collaborations will be endorsed. The IB
differentiation of these initiatives are precisely
Financial Tech Forum will be an opportunity for
what is needed to bring together more robust
professional consultation with industry experts
improvements to the regions unemployment rate.
and an opportunity to pursue these avenues,

1.32 Local and Regional Benefits of Self-

Employment in the East of England
This report has been compiled by
Positive data from the Department for Work and researchers at IB Recruitment
Pensions indicate a rise in the amount of people
opting to engage in self-employment towards the
end of 2010, most of which were men. A large
majority of tech-start ups are often University
spin-offs or developed by postgraduate students
later on in their careers. The importance of