Collaboration key in Liverpool City Region as small business confidence suffers sharp decline across the North West

FSB commits to working even closer with LCR Combined Authority, Councils and leading business organisations to help firms hit by soaring costs, high taxes and staff shortages The latest quarterly Small Business Index from the Federation of Small Businesses (FSB) shows a sharp decline in small businesses confidence across the North West, prompting a commitment from the FSB to work even closer with the Combined Authority, Councils and other leading business groups in Liverpool City Region.

The quarterly index shows a fall from:- +3%, in Q1 of 2022 to:- -27% in Q2; below the national average (-24.7%). Comparatively the strongest performing Region is the East of England (-10%), and the weakest being the East Midlands (-43%), but all Regions have returned a concerning level of confidence.

With the exception of a dramatic decline throughout the Pandemic, these figures show business confidence in the Region is at its lowest since the quarterly survey began. The challenging economic environment against a backdrop of surging operating costs, a high tax burden, and a significant labour shortage is devastating the small business community, threatening the futures of hundreds of thousands of small firms and sole traders.

Paul Wareham, North West England Policy Representative, said:- "Small Businesses have reported a tough second quarter of 2022 as multiple issues dampen the ambition shown in the 1st quarter of this year. Confidence amongst small businesses in the North West has plummeted from a +3 reading in Q1 to 27 at the end of Q2. The optimism felt at the turn of the year has disappeared for many small businesses who are seeing rising costs across the board, with recruitment difficulties and supply chain complications also causing headaches. FSB continues to make the case for extra support to small businesses to get them through a difficult period. The lack of business confidence makes business planning and investment very difficult for the smallest firms and we need to see this turnaround quickly."

Key headlines from the report are:-

►  While 50% of small business respondents aspire to grow in the coming year, 25% expect a fall in investment in their businesses, suggesting that those aspirations may need to take a back seat for now. Of those businesses which expect to grow, ⅔ (65.1%) cite the domestic economy as a potential barrier to expansion, a figure which has risen from 58.6% in the Q1 report;

►  Fuel (cited by 64.2%) and utilities (63.5%) were the main factors behind cost increases, both up notably from the 1st quarter and much higher than this time last year.

►  44% of businesses reported falling revenue, with 36% saying that income has increased; and 38% expect revenue to fall again in the near future.

►  Lack of access to appropriately skilled staff was also noted as a significant concern by 33.9% of businesses. Q2 2022 also saw more small businesses reporting a fall in employee numbers than growing their payrolls, the 1st time this has happened since Q1 2021.

►  More positively, a net balance of 7.2% of respondents anticipate that their employee base will increase in size in Q3, although this is around half the figure who predicted the same ahead of Q2 (14.5%), and many may find it difficult to get the people they need on board.

►  63% of small businesses expect the wages they pay to increase in the next 12 months, but this figure is starting to slow, in the previous quarter 74% expected wages to rise. This could be indicative of affordability.

Throughout the Pandemic, the Liverpool City Region Business Group which is Chaired by the FSB, has acted as an effective platform to co-ordinate local business opinion to national and local Government, providing access to support and guidance and an:- 'on the ground' source of SME data and information.

The group has the most extensive membership of all employer representative bodies across Liverpool City Region. For many years it has served as a collaborative vehicle allowing these membership organisations to engage and work on economic and enterprise strategy, and the provision of support for businesses, with Liverpool City Region Combined Authority, Local Enterprise Partnership (LEP), Councils and national Government representatives.

Membership includes the FSB, CBI, IoD and the Women's Organisation, which runs the Enterprise Hub providing start-up support across the City Region.

Michael Sandys, FSB Area Leader for Liverpool City Region, said:- "FSB's Small Business Index figures are certainly concerning and we need action from the Government now to help businesses struggling with this cost squeeze; a reversal the recent hikes to national insurance contributions, reducing business rates for small firms, a cut in VAT, particularly on energy, where we're also saying the Government should extend help for households provided through the Council tax system to micro businesses through the rates system, and targeted reductions in fuel duty. We also need strong leadership, ensuring local Councils are pulling in the same direction to attract inward investment and make Liverpool City Region the best it can be for our people and businesses. The recent reports by Government commissioners into Liverpool City Council's shortcomings are disheartening and we need action to address these problems now. The new Strategic Futures Panel, set up by the Government to assist the Council on its improvement journey, is a step in the right direction. It will be chaired by Metro Mayor Steve Rotheram and there is a vast amount of experience and expertise in City leadership in the form of Sir Howard Bernstein, Chief Executive of the City of Manchester from 1999 to 2017, and Baroness Judith Blake, Leader of Leeds City Council from 2015 to 2021, as well as a nominated business leader. We have already pledged support of the FSB and Liverpool City Region Business Group; committed leaders from the major business organisations who are working together every day to help and support local businesses. FSB is committed to further developing this collaborative work, which has been forged over many years of the group's existence, and I'm confident that we extremely well placed to help our local politicians bring necessary change, and continue to support and guide small businesses through these challenging times."
 

Students congratulated on GCSE success

PROVISIONAL data shows that Liverpool's GCSE results have improved. Liverpool's grades reflect the national trend with students sitting the 1st public examinations since 2019. The proportion of students achieving Grades 4+ (C-A* in the previous grading system) in English and maths combined has increased from 2019, from:- 57.4% to 63.9%.

Increases are also seen in the individual subject scores: from 69.5% to 74.2% (gap to national average 3%) in English 4+; and from 62.9% to 67.1% (gap to national reducing to 8%) in Maths 4+.

The 7+ grades (A-A* equivalents) were: English rising to 24.8% which is the above national average, and maths was 20.2%, 3.8% below the national average.

Once again the School Improvement Liverpool Community Languages Project has particular cause for celebration. 58 students were entered for GCSEs in Arabic, Chinese, Polish and Portuguese, with 100% gaining Grades 4+, and half achieving a Grade 9 (the equivalent to an A*).

Cllr Tomas Logan, cabinet member for education and skills, said:- "The cohort of young people who received their results today started their GCSE courses in September 2020 when schools were facing the challenge of teaching during the Pandemic. You have our congratulations and admiration for what you have achieved when faced with extraordinary circumstances and we all send you our best wishes as you move on to the next stage of your education or further training. My thanks today also go to Liverpool's teachers and our other school staff who worked so hard to support our students."