The news broke recently that the East Coast Main Line will once again be under the control of government. With this marking the third time in a decade that the troubled line has needed government intervention, many people are asking questions.

Whilst successive bidders have clearly seen potential and profitability in the East Coast Main Line, there seems to be a recurring theme of financial loss and failure. With questions flying over the bidding process, profits and the future of the line, let’s take a look at what’s going on.

A Series of Failures

Back in 2005, GNER took over the East Coast Main Line. Tendering a bid of £1.35bn, the deal was the largest contract ever seen in Europe at the time and it seemed the 10-year deal was a sure thing. Fast forward to a year later and already things were looking grim. GNER’s parent company – Sea Containers- was experiencing big financial problems, which had a knock on effect for GNER. After protracted wrangling, GNER was stripped of the route and new bidders put forward their plans.

August 2007 saw National Express take over the beleaguered route for £1.4bn, but they gave the line back to the government as they became mired in the 2009 financial crisis. The government then took over the running of the East Coast Mainline until the acceptance of a joint Virgin-Stagecoach bid in 2015. Coming in at £3.3bn, it was hoped this would be the last of the turmoil associated with the line.

And that brings us up to date. Re-taking the line under state control, the government has contended that Stagecoach and Virgin overbid and over-estimated the profits to be had. The former operators, however, have said that Network Rail has undermined them by failing to update tracks, which would have allowed more trains on the route.

Is the Government to Blame?

Whilst the government and Transport Secretary Chris Grayling have pointed the finger at Virgin and Stagecoach, many people are asking if the government had a role to play.

Labour has stated that the lack of any conditions placed on operators by the government was “ludicrous”. At the same time, the level of bids, the tendering process and government vetting procedures have all come under intense fire. Commentators are also pointing out that these failures ultimately come down on the taxpayer, whilst ticket prices continue to rise.

Whatever the causes and the costs, the East Coast Main Line will be up for bids once again in 2020 and it will be interesting to see how that turns out. 

According to recent statistics, the manufacturing industry in the UK is seeing good levels of growth at the moment.

Regardless of slowing down in the three months leading up to march, the industry is still operating ahead of long-term averages. The survey from business lobby group the Confederation of British Industry revealed that export order books have remained largely unchanged, but could manufacturing firms keep pushing for further growth by embracing the benefits of sustainability?

Read on to find out more about the benefits of sustainable practice for manufacturing firms.

Increases consumer demand

Consumers are looking for more than just products that they like, they also want to buy into brands and companies that they trust, believe in and respect. If, as a manufacturing firm, you start behaving in a more sustainable way, you may find that you are able to attract a new kind of clientele, who like the fact that you care about your environmental footprint.

Employee retention

Employees love the chance to feel as though they are part of something bigger and better, and behaving in a more sustainable way can help you to achieve this. If you create a company culture that is committed to behaving in a sustainable way, you will find it easier to retain key members of staff who are keen to keep up with these behaviours.

Leadership

On a larger scale, you need to consider how sustainable practice can help your company become a key player in the discussion about the environment. Embracing sustainable behaviours can help you propel your business forward and is also going to give you a more positive public perception.

Increase your businesses ability to comply with regulation

The government is responsible for implementing guidelines that businesses need to adhere to with relation to sustainability. As the discussion about climate change and the environment becomes increasingly more commonplace, getting on board with sustainability can ensure that your business is in a position to meet new regulations in a timelier manner.

Attract more investors

Much in the same way that it helps with retaining key members of staff, sustainability can also help with attracting key investors, especially the millennial types that have been brought up in an era of environmental protection messages.

While there is still uncertainty surrounding whether we will have a hard or soft Brexit, it is important that SMEs prepare whatever the outcome is in 2019.

It’s impossible to know what the best course of action to take is because the overall decision is still unknown, but making small changes can help SMEs to stay prepared. Read on to find out more.

Consider a hedge fund

The sterling has already dropped in value, something that many businesses are feeling the effects of. While it has been beneficial for exporters, it has meant an increase in costs for importers. As Brexit negotiations continue, exchange rates could fluctuate even more and businesses will need to come up with ways that they can manage this risk. Hedging products that are considered complicated by traders is one resolution, as is creating a foreign currency bank account, which should help to manage the risk of changeable exchange rates.

Negotiate with suppliers for flexible contracts

If your SME works with suppliers on the continent, it may be beneficial to you to think about negotiating more flexible contracts with them before you make any decisions. If you don’t do this, you may find your business in a less than desirable financial situation if currency movements shift in the wrong way. Tariffs and custom duties might also be applied, which could mean you’d have to fork out even more money. 

Reconsider grant funding strategies

There is still a lot of uncertainty with regards to the continuation of EU grant funding, however, advice from Government is that businesses should continue to apply for these until more is known about how these types of grants will operate in the future. In the meantime, organisations can assess whether UK grants are available and can monitor how these develop. For SMEs it is also worth looking for new domestic opportunities that might arise post- Brexit. 

Unfortunately, it is still impossible to know what the future holds for SMEs regarding Brexit. Some are concerned about the implications while others are not. Either way, preparing for the worst-case scenario will help businesses to identify strengths and weaknesses of their current business operations.

If your SME is looking for expansion funding, or overdrafts, find out about the finance options that we have available here. 

Every business needs to fulfil certain guidelines when it comes to protecting their staff and if they fail to do so, they run the risk of being in breach of the law. 

Recently there has been talk of the government taking steps to modernise worker’s rights in the UK, but what will this mean for your SME? Read on to find out. 

If you work in business and haven’t heard the term ‘gig economy’ being used recently, it’s likely that you need to make more of an effort to keep up to date with current affairs, because this is something that is set to change the entire face of the way that modern organisations operate. 

As was highlighted by Theresa May in one of her speeches, the structures that are in place with regards to workers need to reflect the current working environment. 

• Enforcing workers' holidays and sick pay for the first time and introducing the right for all workers to request a more concrete contract which should subsequently provide them with more financial security. 

• Defining "working time" for flexible workers who find jobs through apps or online so they know when they should be being paid.

• Asking the Low Pay Commission to consider higher minimum wage rates for workers on zero-hour contracts.

• Quadrupling employment tribunal fines for employers showing malice, spite or gross oversight to £20,000.

If you operate an SME and employ any freelance workers, it’s worth considering how the suggestions laid out in this proposal might affect you.