It’s a strange world in which we now live, pandemics aside despite their horrid impact, we appear to have found a new confidence in the art of central government control and responsibility. For most of my business life, the British Parliament has tried to decentralise decisions moving their impact and consequences further away from centre to the regions, but more recently have appeared to relish in the delight of direct delivery. Recent funding arrangements post Covid have required the direct submission by Local Authorities endorsed by MPs, rather than the considered opinion of the region delivered by 38 LEP’s. The recent Levelling Up Fund bidding in particular will see some 343 unvetted bids direct from Local Authorities versus 38 fully vetted bids from independent LEP’s being submitted to Government, which sadly will slowly grind to a halt under such a deluge of paperwork.
There suddenly appears to be a new found wealth that is driving this desire for closer proximity to the electorate. Whilst billions of pounds have been set aside to support the Covid pandemic and facilitate growth post pandemic, we appear to have found a new confidence in our ability to fund activities despite the level of debt shouldered by most G7 countries. Has our Government gone “Crypto” is the Britcoin a reality to follow the unfettered Bitcoin? Whilst I applaud the support for many businesses provided by Government during Covid, is there a plan at any time afterwards to balance the books?
Will we be faced with redundancies or resignations following the removal of furlough? We are riding high on state aid for our homesteads, but once the guaranteed income is removed will businesses reach that make or break tipping point and reduce their staff levels or will they equally be faced with a deluge of resignations in a restricted labour market? It is my belief that we are facing a false dawn. Remove the enforced Covid arrangements and the new normal will be business as usual. The Hospitality sector in particular has been the first casualty resulting from the labour shortage created by Covid where many overseas workers have returned to the safety of their families in their native countries to see out the pandemic. Returning to the UK has been made much more difficult following immigration rules introduced in the meantime created by Brexit. This has skewed our thinking around unemployment in particular and will stimulate wage increases at this end of the employment market.
Rising house prices resulting from a greater appreciation of the countryside and the need for social distancing, home working offices and a garden, will place greater pressures on many other employers to increase wages. The more than a million empty homes in England and the more than one million homes with planning permission yet to be developed, might become the new wasteland of oversupply, once the impact of higher wages finds its way to consumer pricing, driving up inflation.
Those with the requisite skills will benefit from this “brave new world” ahead and really should take the opportunity to take the offer from the highest bidder to support their families new way of life. Indeed many may love the option of continued home working and others may desire a return to the old ways which may also be the arbiter of change for the future. The people will decide what is right for them and the companies likewise. Decisions around redundancies have been clearly delayed by the furlough scheme, but soon these decisions must be made as we near the opportunity for the resumption of normal service by business and the various safety nets are removed.
And at the point where obfuscation becomes the order of the day, is this the moment when devolution makes more sense again? Will we see a return of decision making back to the regions once the money supply tightens and pleading poverty becomes the new order of the day? The Government will likely have little choice. We are very likely to see rising inflation, higher levels of unemployment a spate of Company closures and a continuance of some Covid measures as public sympathy for Government turns to enmity. We will require structured tendering from Regions once more as the political blame game starts again and Government hastens its departure from their previous decisions.
Business as usual following the release of pent up demand will return with vengeance and it will fall to businesses across the land to foot the eventual bill for the necessary profligacy that the pandemic has incurred. It’s time to create the action plan wherever you sit in all of this and make the right play in what will be a new way of operating for us all.
#TheBigShift @biz4Biz @weldingworld
