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Construction giant Carillion goes into liquidation

Construction behemoth Carillion have given the shock announcement that they are to go into liquidation, putting thousands of jobs at risk.

Little is known about the details as yet, but according to the statement talks between the firm, lenders and government failed to reach an adequate solution for saving the second biggest construction company in the UK.

The company employs a total of 43,000 people around the world – 20,000 of which are located in the UK. It is not yet clear how these people will be affected, however, government have stated that they will continue to provide funding in order to maintain public services currently run by Carillion.

News of the liquidation will undoubtedly come as a shock to construction professionals, who in recent years have seen the firm involved in major projects such as HS2 and the delivery of schools and prisons. They are also the second biggest supplier of maintenance services to Network Rail, and they maintain 50,000 homes for the Ministry of Defence.

Where did it all go wrong?

In a BBC article, Carillion chairman Philip Green said “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.

“In recent days, however, we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.”

Bernard Jenkin, the Conservative chairman of the House of Commons Public Administration Committee, added “This really shakes public confidence in the ability of the private sector to deliver public services and infrastructure.”

“There needs to be a change in the mindset of many of many of these companies… if you’re actually doing a very substantial amount of business at taxpayers expense for the taxpayer, you’ve got to treat yourself much more as a brand of the public service not as a private company just there to enrich the shareholders and the directors.”

“Ironically, Whitehall tends to do contracts with companies that it always does contracts with, because that’s the safe thing to do – that’s the perception. A great many small and medium-sized companies feel excluded.”

Mick Cash, the general secretary of the Rail, Maritime and Transport (RMT) union, concluded “This is disastrous news for the workforce and disastrous news for transport and public services in Britain.

“RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions.

“The infrastructure and support works must be immediately taken in house with the workforce protected.”

According to BBC business editor Simon Jack, some of Carillion’s contracts will now be taken on by other firms whilst others could be renationalised once again.

 

More to follow.

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A new Apple campus at Battersea Power Station redevelopment

Battersea Power Station has now confirmed that Apple has agreed to lease office space within the historic Battersea Power Station.

Apple will be the largest office tenant at Battersea Power Station occupying approximately 500,000 sqft., across 6 floors of the central Boiler House inside the historic icon. Apple is expected to move into the Power Station in 2021.

Battersea Power Station will be Apple’s new London campus and its office will account for circa 40% of the total office space in the whole development.

Apple has today said it is looking forward to opening its new London campus at Battersea Power Station in 2021. 1400 Apple employees from existing offices around London will relocate to this magnificent new development at one of London’s best known landmarks. Apple has added, that this is a great opportunity to have its entire team working and collaborating in one location while supporting the renovation of a neighbourhood rich with history.

Dato’ Johan Ariffin, Chairman of Battersea Holding Company Limited, said “We are delighted to welcome Apple, the world’s most valuable brand, to Battersea Power Station, London’s most iconic development. This move by a brand of such calibre will serve to generate even more interest in Battersea with its vibrant mix of commercial, exciting retail and residential offerings in a cultural setting designed to drive innovation and enterprise. Apple can only strengthen this formula for success.”

Rob Tincknell, CEO of Battersea Power Station Development Company added: “We are delighted that Apple has chosen to make Battersea Power Station its home in 2021. It is testament to our fantastic building and the wider regeneration of the 42-acre site which offers a carefully curated mix of homes, businesses and leisure amidst extraordinary open spaces and new transport links. It has always been our clear objective to create one of London’s most thriving new communities and this commitment from Apple will undoubtedly help us achieve our goal.”

Sadiq Khan, Mayor of London commented: “I am delighted that Apple is moving into Battersea Power Station‎, helping to generate new jobs and economic prosperity for Londoners. It is a further sign that London is open to the biggest brands in the world and the leading city for trade and investment.”

Cllr Ravi Govindia, Leader of the London Borough of Wandsworth said: “I’m very pleased to give Apple a warm welcome to the London Borough of Wandsworth. Apple will become the largest employer in the Borough and we are hugely excited that they will play a keen and active role in our local community.”

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87% of UK builders missing out on business due to poor online presence

Interesting Research conducted by Yell has highlighted invisibility issues online for small businesses.

Yell, one of the biggest providers of digital marketing in the UK, has discovered an overwhelming majority of builders (87%) it researched have wrong or inconsistent information online, including basic details such as a phone number or email.

Feedback shows 89% of customers say they will try another company if the details listed online for a particular business are incorrect, suggesting many small businesses, including builders, are missing out on a lot of potential custom.

Yell conducted research into how the 50,630 builders in its UK database appear online, also asking customers nationwide about their online habits and expectations. The results paint a gloomy picture pointing to some basic errors in small businesses’ approach to reaching potential online customers.

Key facts:

51% of customers said when they were looking for a new service, the most important source of information was a website

Having inconsistent or non-existent information online means small businesses are missing out on potential custom with 54% of people relying on positive online reviews when deciding on a new local business or service

      • There are 93 builders names in the UK beginning with the name “Alan”
      • There are 145 builders names in the UK beginning with the name “Andrew”
      • There are 104 builders names in the UK beginning with “Complete”
      • There are 381 builders names in the UK beginning with the name “Dave” or “David”

If a company’s information online is wrong, it’s arguably worse than not being online at all. – Mark Clisby, Yell’s Marketing Director.

“Not only is the company effectively invisible to customers, it can also seem careless or even untrustworthy. This often happens because companies don’t always know all the listings sites where they appear, or when they move they forget to update their information. It’s easily done, but can be incredibly damaging for business.”

“A lot of small businesses tell me they get all their business from word of mouth and don’t need to be online. However, they’re ignoring the fact that word of mouth has moved online, with more than half of all customers choosing a local business based on online reviews. That’s a lot of work to be missing out on,” concluded Mark Clisby.

To support small businesses, Yell has launched Connect, a service recognising the importance of connections, word of mouth recommendations and referrals. It helps business owners make their details visible online and get in front of the people looking for local products and services.

Connect uses smart technology to automatically list and update business details everywhere they need to be online, accurately and consistently. Details include company name, address, telephone number, logo, opening hours and payment methods on sites such Facebook, Twitter, Google+ and 100s’ of other high profile sites. As part of the service, Connect also helps set up social profiles on Facebook, Google+, Twitter and Foursquare. A centralised dashboard enables customers to view analytics, monitor and respond to online reviews, and post both real-time and scheduled updates on their social networks, as well as update their business details online at the click of a button.

Yell is offering small businesses in the UK the chance to try out Connect by completing a free scan of their business online. By entering the business name and address, Connect is able to identify how visible a business is online and, most importantly, report on how accurate the information is. On average, over 240 people a day are running the free Connect scan to check business details online.

Additional interesting insights revealed by Yell’s research into small businesses across the UK within its database showed that:

        • 5,612 small business names include the phrase “& Sons” or “& Son” but only 30 contain the phrase “& Daughters” or “& Daughter”
        • The most popular letter for small business names in the UK to start with is ‘A’, with 1 in 10 starting with ‘A’
        • The first five letters of the alphabet, A-E, account for 40% of the first letter of all small business names in the UK
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Construction bosses in ‘tax scam’ warning amid calls for HMRC to investigate

Bosses at Crossrail and some of the UK’s biggest construction firms are being warned against engaging in a ‘scam’ which is aimed at dodging new tax rules introduced by HM Revenue and Customs to close tax loop holes and clamp down on ‘umbrella’ employment models.

The warning in a letter to bosses from Britain’s largest union, Unite comes after the union obtained documentation of employment business service providers continuing to offer construction firms an alternative to direct employment to reduce national insurance and employment costs by more than 25 per cent.

Unite is also calling on HMRC to investigate the scam which sees employment business service providers offering ways to side step the new supervision, direction and control test (see notes), which came into force on 6 April, by engaging skilled workers on a self-employed and ‘tax efficient’, basis.

The new ‘test’ was introduced by HMRC in part to prevent employment business service providers or ‘intermediaries’ from engaging workers through a ‘tax efficient’ ‘umbrella’ employment model.

The loophole allowed employment business service providers and employment agencies to minimise employer national insurance contributions and drive down wages by getting workers to claim tax relief on travel and subsistence to supplement their low pay.

In a presentation seen by Unite, one employment business service provider boasts of consulting with ‘highly skilled legal and financial advisors’. The firm goes on to offer a ‘status check’ on whether any skilled workers can be employed without supervision, direction or control. A move not only designed to reduce employment costs and be ‘tax efficient’, but one which Unite says could undermine health and safety and erode industry standards.

Unite national officer, Bernard McAulay said “Everything we’ve seen and heard points to a brazen attempt by employment business service providers to side step a tax loophole which was closed just last week.

“We’ve already had reports from construction workers being pressured to declare themselves self-employed and sign contracts agreeing to accept liability for any unpaid tax and national insurance should the tax man come knocking as a result of this scam.

“The reason HMRC closed this tax loophole in the first place was because employment business service providers were exploiting temporary workers by getting them to claim tax relief on travel and subsistence to top up low wages at the same as minimising employment and national insurance costs.

“This latest mutation of bogus self-employment would effectively see workers, who should be directly employed, being stripped of holiday pay and their automatic enrolment pension contributions, while allowing employers to pay no national insurance and circumvent nationally agreed rates of pay.

“We know that this ‘scam’ has been circulated throughout the construction industry and to companies on major projects, such as Crossrail by of at least one business service provider.

“Unite urges HMRC to investigate and calls on the construction industry to turn its back on ‘shady’ employment practices which are designed to bust nationally agreed rates of pay at the expense of the taxpayer.”

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The future looks bright for family businesses in the construction sector

Family firms across the UK are setting their sights on expansion following another hugely successful year for the sector.

New research by Oxford Economics for the Institute for Family Business (IFB) Research Foundation reveals the vast contribution family firms make to the UK economy – employing over 11.9 million people and making up 87 percent of all private sector firms in the UK.

There are now more than 800,000 family firms in the construction sector, making up almost one in five of all businesses in the industry. Family businesses also account for 94 per cent of all private sector firms in the construction sector – one of the highest concentrations in the UK.

Kate Woods, a spokeswoman from construction family business, Osborne, added: “Osborne echos the amazing and timely achievements of family businesses and this year we are excited to celebrate our 50th anniversary. We rebranded to a vibrant magenta in 2014 and we are committed to finding customer led solutions, listening to our customers and working in collaboration with their needs.”

Since 2013 family businesses have increased employment by six per cent and turnover has also seen a strong rise, increasing by two per cent to reach £1.3 trillion. In addition, family firms paid £125 billion in taxes and contributed over a quarter (26%) of the UK’s entire GDP.

Speaking about the new findings, Peter Armitage, Chairman of the IFB, said “The report sheds light on the sheer size and scale of the family business community. It’s an important reminder of how vital family-run firms are to the UK – serving as the backbone of our economy, with family firms making a phenomenal contribution across all sectors, industries and regions.

“Family businesses have always been at the very heart of the UK economy and based on the steady rise in their recruitment and turnover, it is clear they are here to stay. It’s encouraging to see family firms with such a buoyant attitude towards their future expansion – almost half of family SMEs expect to grow over the next two to three years.”

Growth and expansion is a top priority for many SME family firms with just under half (49%) stating they aim to grow over the next twelve months.

Looking to how they will turn this ambition into reality just under a half of firms (43%) say they will invest in improving the skills of their workforce to support growth, with a third (33%) planning to boost productivity through investing in new machinery and premises.

Looking beyond their traditional activities to diversify their business and customer base, 42% of family firms are planning to move into new markets and 37% are developing and launching new products and services.

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Talking in Your Client’s Language

Many British construction companies have grown by developing overseas. While this brings great opportunities and benefits it also presents many challenges. Over the coming years, export plays a key role in the government’s strategy for economic development. Whether this exporting involves the EU, or one of the new blocks such as the BRICS, MINT, or RISE countries, these are nations that have relatively little exposure to English in their business communications. To target these nations and communicate effectively, it will become more and more important for British business to be able to speak their language.

While most companies are aware of the need to reach out to clients in their own words, there is still an underlying issue of quality. More and more research is showing the “can’t read, won’t buy” problem. Clients who can’t understand a website, brochure or sales presentation, or find it “strangely written” or “written like a translation” are far less likely to buy products or services. Where, in recent decades, British companies were not attempting to translate anything into the client’s local languages, the issue today revolves more around the usability of the translations. This means there is an increasing emphasis on quality and precision.

The need to use specialist linguists cannot be overstated. A civil engineering translator who works on technical engineering documents should be able to understand the same documents and terminology that a working civil engineer would be expected to know. A legal translator should understand how legal terms work in both languages, and be able to match the correct term to the correct idea, rather than just translating from a dictionary. These specialist translation tasks require much more than a simple languages background. Modern translators need to be “engineers who translate” rather than “linguists who try to do engineering”. In some ways, we can think of translating as being similar to “rewriting something in your own words”, imagine trying to do that with a specialist document outside your field. It’s virtually impossible to get good results.

Another important point to remember is that translation is far too often a “distressed sell”. Clients only start looking when the already need a document translated; many smaller companies are reduced to going onto their internet search engine in a panic. The result of this is that there are hundreds of very similar translation agencies with no differentiating skills, all paying a fortune to get onto the front page of search engines.

We recommend being proactive and finding a good languages partner when you have plenty of time to evaluate them properly. Make sure they have the skills and ability to deliver your projects to the required quality, every time. The net result will be better sales overseas, and more growth for British business overseas.

Written by David Smith – Managing Director, Constructive Translations
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