Rising to the challenge
Many businesses across the UK have spent the last two weeks processing the Autumn budget and there have been some sobering reports detailing exactly how much extra money some organisations are going to have to find in other to manage.
For major high street retailers, the cost will run into tens of millions (M&S has said National Insurance and minimum wage rises will cost the business an additional £120million next year) and while that will be scaled down for the kind of smaller manufacturing firms operating in the fenestration sector, the numbers are still significant.
One Telford based sheet metal business for example, with ‘a healthy order book’ and 80 staff, will need to find an additional £4,000 a month.
And in this week’s newsletter, Veka’s managing director, Neil Evans, has said that the national insurance increase alone will take £500,000 from its bottom line.
Neil adds that: “Without substantial productivity gains, not previously seen in UK industry, increased costs can only starve businesses of much needed cash to support day-to-day business, the support we provide our workforce and future investments.”
So how are businesses going to find the money? For some, it will be a case of pausing or cancelling capital investment and expansion plans, for others it could mean reducing the workforce – at a time when new people and skills are desperately needed – and investing more instead in automation or AI to make existing workforces more productive.
According to one report, a Sheffield based company called Universal Robots that supplies ‘cobots’ – robots that can work alongside people) has been inundated with inquiries from a broad range of industries, including manufacturing.
And another has highlighted how another firm is already using AI to ‘do all the grunt’ work typically done by graduates.
The fenestration industry will no doubt rise to the challenge of the budget, Neil Evans points out that “Veka remains committed to navigating these changes in support of our customers, colleagues, and the industry” – but I think many other business owners will also agree with his following comment:
“We’d rather be free to invest to directly drive business innovation and competitiveness, in turn support working families and contributing to the Government’s tax yield via business taxes fuelled by improved results.”