·        Piper Construction Midlands, whose head office is in Solihull, has ceased trading with the loss of 30 jobs but other companies in the Piper Group are unaffected

·        BizzEnergy, based in Worcester, is now under KPMG administration casting doubt on the future of 160 jobs while the customers have been transferred to Centrica

·        AutoSleepers is to shed about 40 jobs out of its 160 jobs at the engineering business in Willersley, Worcestershire

·        Precision Antennas is to close three sites at Stratford upon Avon, Bidford and Long Marston in 2009, with the loss of 345 jobs, with production moved to China, India and the Czech Republic

·        Walker Renault has closed its car dealership in Stourbridge with the loss of 36 jobs

·        Jaguar Land Rover has extended its redundancy scheme to a further 400 staff

·        HS Printers has gone into Harris Lipman administration with the loss of up to 120 jobs in Worcester

·        Cardale – a firm that makes garage doors – has gone into administration

·        Oswestry Chamber of Commerce has reported severe problems in this town. Over the last six months, a number of businesses have closed including Motor World, Hitchens, Laser Graphics, Stationery Box, Frank Lloyd, PR Sports, Café Barista. Roy Evans Garage will close at the end of November with the loss of 26 jobs.

Business confidence

The Royal Bank of Scotland (RBS) stated that in October in the West Midlands new business and staffing levels were all “declining at the fastest rates since data was first compiled in January 1997”.

A survey of West Midlands businesses showed that in answer to the question:

“Is the level of output or business activity at your company higher, the same or lower this month than one month ago?”

* 47.2 per cent of businesses in October said it was ‘lower’, compared to 21.6 per cent in February.

When asked:

“Is the level of employment at your company higher, the same or lower this month than one month ago?”

* 33.6 per cent in October said it was ‘lower’ compared to 19 per cent in February.

Corporate hospitality is steady and there have been reports of an increase in weddings, but the hospitality sector is beginning to be affected by the credit crunch.

The Midland Association of Restaurants, Caterers, Hotels and Entertainment (MARCHE) has calculated that, collectively, the hospitality sector is the second largest employer in the region.

Recent events that have helped the region include the Conservative Party Conference in Birmingham during late September and early October, which brought £19,263,400 to the area.

However, in the week of 10 November, Visit Britain projected a £180 billion decrease in tourism revenues in 2009 across the United Kingdom and therefore the knock-on effect of this decline in the West Midlands in 2009 could be significant.

In the hotel sector across the UK there was a sharp decline in hotel occupancy (more than 10 per cent). This decline was more pronounced in Birmingham than in equivalent UK cities.

EEF Midlands has reported that for a number of engineering firms, order books were healthy up to September, but since then there has been a steep decrease in orders with many firms deciding to reforecast on a three-monthly basis.

There have been reports of 50 job losses at a Black Country pressings firm and an auto-related firm in Warwickshire has cut shifts. There are reports of some engineering firms deciding on holidays for staff from 12 December to 12 January and there are even reports of a minority of engineering firms deciding on a three-month holiday period. Some engineering firms are reportedly on a four-day week.

Bank charges and insurance

Concerns regarding the behaviour of banks have continued. The Institute of Chartered Accountants in England and Wales (ICAEW) reported that one firm borrowing £3 million had an arrangement fee of £1500, which has recently increased to £30,000. Another business seeking to borrow £15 million was given a £2.5 million arrangement fee, renewable in six months’ time.

The ICAEW has also reported that exporters are facing greater difficulties in gaining indemnity insurance – in one case a business with export interests to Portugal failed to get cover. The same insurance firm also was reluctant to provide insurance for exports to the United States. The ICAEW also reports that it is now difficult for construction firms to gain indemnity insurance.

The Federation of Small Businesses (FSB) also reports problems with HBOS and Lloyds TSB. In particular this relates to exit penalty charges, with one charge raised from £12,000 to £35,000.

ACAS

Many firms have complained about the long wait when calling the ACAS helpline.

A full list of recommendations to mitigate the impact of the credit crunch

Here is what the West Midlands Business Council suggests:

To Government

1.      Introduce the scheme that was adopted in the 1970s and 1980s whereby businesses that have to reduce shifts but do not want to lay off staff receive some compensation from the Government – similar to how Statutory Sick Pay payments for employers works now

2.      Reduction in National Insurance for firms that employ less than 20 people

3.      Tougher action from OFGEM so that recent reductions in commodity prices are passed on to cuts in energy bills

4.      Banks in which the Government have a stake should ensure fair lending practices

5.      Instead of having Regional Funding Allocations scheduled for new-build properties this money could be reallocated for Registered Social Landlords (RSLs) to buy housing from developers – thereby kick-starting the housing market and providing affordable housing for people, including for those people whose livelihoods have been hit by the credit crunch

6.      Support for the housing market is critical to avoid further damage to the wider economy. Some sort of Government support to pay, at least, the interest on mortgage repayments would be helpful to avoid repossessions

7.   In respect of the problem of Credit Default Swaps (CDS) it was proposed that due to the toxic nature of this problem the Government could set up a clearing house devoted solely to addressing this specific issue.

To Advantage West Midlands

8.      Access to finance programme demonstrates a clear programme for mezzanine funding

9.      Turnaround fund established and tailored specifically to firms who are being affected by the credit crunch but who are sustainable businesses

10. Islamic finance offers are put forward. This does not necessarily need to be publicly funded. Sign posting to existing reputable Islamic finance providers can be the way forward

11. With the well-regarded Manufacturing Advisory Service (MAS) it may be beneficial if, at the very least, charges to use this service were reduced by 50 per cent to encourage greater take-up of the service. There are concerns that some manufacturing firms are so badly affected by cash flow problems that they will be deterred from using MAS by the current charging regime. Such an outcome could lead to an increased likelihood of business failure with MAS services not being fully used by the sector

12. With regular evidence now being produced of banks holding back on lending to SMEs, the role of Community Development Finance Instruments (CDFIs) has gained greater prominence as the lender of last resort. Therefore it has been proposed that the recent European Investment Bank (EIB) funds that are available to Advantage West Midlands could be used to recapitalise the CDFIs.

To Business Link West Midlands

13. Business Link provides a service advising businesses of their legal rights in terms of their existing financial arrangements

14. Prominent marketing targeted at established SMEs who needs immediate help as a direct consequence of the credit crunch. The West Midlands Business Council and its member organisations are willing to do all that it can with this marketing in partnership with Business Links and the Agency

15. Some colleagues have stated that Business Link either needs to do more to connect with BME owned firms or that services need to be provided via local bodies. This view is shared by other business colleagues on a more general basis, believing that the intensive support that is needed can not be provided fully by Business Links and that a £500 grant towards the cost of paying for intensive support could be provided.

What are your thoughts and experiences of the credit crunch and its impact on the West Midlands? Are you finding ways to beat it, or have you had to let staff go? What should banks and public-sector organisations be doing to help you? Email stephen_massey@sandwell.gov.uk with your views.