Thursday, 29 March 2018
Brexit action stalls in East Midlands, says report
Businesses in the East Midlands reveal that their Brexit preparations have stalled, according to research conducted by Shakespeare Martineau.
More than half of the 130 businesses surveyed are failing to communicate with employees about the impacts of Brexit (56%), despite two thirds recognising that the flow of skilled foreign workers into the UK will decrease after March 2019.
Other areas have also not been given consideration by the region’s leaders. More than half of business owners have not compared costs of EU and non-EU suppliers and 45% have no plans to analyse different trading possibilities. Despite this, businesses believe that the UK’s exit from the EU could leave lasting damage to the EU’s global reputation (69%).
Nationally, UK businesses are less convinced than they were a year ago that Britain will be strong enough to operate independently after Brexit – a sign that the prolonged uncertainty surrounding Britain’s exit from the EU has eroded business confidence - 60% think the UK will be strong enough to operate independently after Brexit, down from 73% a year ago.
Duncan James, Head of the Nottingham office at law firm, Shakespeare Martineau, said: “It is clear that the current information vacuum that exists around Britain’s Brexit plans is leaving business leaders feeling less equipped to make clear decisions about their investments and operational activity. While this is understandable, there are some areas that businesses can focus on now – including reviewing their employment profile, supply chain agility and responsiveness to regulatory change. With the general uncertainty businesses should also be concentrating on cash flow management and cash collection generally.
“As 78% have not experienced any change to trading with the EU so far, it could be that the impacts of Brexit have yet to materialise. Focusing on Brexit preparedness now, will help businesses move quickly when further detail is released.”
Businesses in London are more likely than those in the East and West Midlands to have moved or planned to move business operations away from the UK; 25%, 7% and 13% respectively. While a relatively modest number, this finding is significant because such investments are likely to be focused on pursuing growth or market opportunities.
Duncan James, added: “With a large proportion of local businesses operating in the manufacturing, business services technology and life sciences and medical arena, it isn’t as easy to uproot the business and move to a different location. The loyalty to the local marketplace is testament to the confidence that owners feel in their business models however, reviewing the scenarios that Brexit may present could give businesses the competitive advantage further down the line.”
A primary concern for life after Brexit is access to skills - 73% of East Midlands businesses leaders are concerned that immigration will still be needed to fill skills gaps after Brexit.
Duncan James, added: “Employers must assess their employment profile to understand what proportion of the workforce is reliant on EU workers. Employers are now having to get creative with attracting and retaining their talent to ensure that there are no gaps in supply or business operations. This must consider the potential budget requirements for upskilling the existing workforce or the immigration fees to keep overseas employees.
Duncan James, concluded: “East Midlands businesses are heralded for their entrepreneurialism, and no matter what Brexit throws at the region, I have no doubt that the local business community will respond, move forward and flourish.”
For more information about Shakespeare Martineau's East Midlands Brexit research, visit this link.