< Previous East Midlands Business Link www.eastmidlandsbusinesslink.co.uk SEVERN TRENT ST CONNECT Q&A Q&A Neutralising Nutrient Neutrality ST Connect are helping developers to meet Natural England’s Nutrient Neutrality requirements using onsite community-scale water recycling centres (WRC). We spoke with William Mackveley, General Manager of ST Connect to understand more about Nutrient Neutrality and what ST Connect are doing to help developers. 20-21.qxp_Layout 1 06/01/2023 10:16 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link SEVERN TRENT ST CONNECT Q&A What is Nutrient Neutrality and why is it causing a problem for developers? Nutrient Neutrality is the precautionary approach that Natural England are taking to help protect internationally important water-dependent habitats sites already in an “unfavourable condition” from further damage due to nutrient (Phosphorous and/or Nitrogen) pollution. Extra wastewater from new housing developments may cause further damage and/or hamper recovery efforts. To prevent this, developers must identify and implement long-term mitigation measures acceptable to Natural England which prevent contributing additional nutrients into the water catchments. How do onsite community-scale WRCs help? Onsite community-scale WRCs can be an effective means for removing much of the nutrients generated in the development’s wastewaters. Depending on the site-specific circumstances, an onsite WRC may be able to provide all the mitigation needed to meet Nutrient Neutrality. Publicly operated WRCs complying with an environmental permit are considered one of the forms of mitigation acceptable to Natural England. How long does it take you to deliver your WRCs? You should allow for at least 30 months for the delivery of the WRC. This duration provides time needed for the water studies, environmental permit applications, planning applications, design, construction, and commissioning. For large developments, it may be possible to adopt a modular approach to adding treatment capacity, rather than delivering it all at the start – allowing developers to spread their costs over a longer period. What’s it like living nearby a WRC? Do they smell? We want to be “good neighbours” and provide WRCs barely noticeable to the nearby residents. Odour is kept to a minimum through a combination of aerated treatment processes and sealing or covering the assets with the greatest risk of smells. Blowers and compressors are housed in acoustically shielded cabinets to keep noise emissions as low as practicable. We encourage developers to implement landscaping strategies that screen as much of the facilities as possible. Who will operate these systems, and will they be there in the long-term? What standards are the sites operated to? We operate and maintain our own assets with our inhouse Operations Department. 24/7 remote sensors and telemetry will alert our operators to any issues, should they arise. In addition, routine maintenance and sampling helps us to remain compliant with permit requirements stipulated by the environmental regulators. Our Ofwat licence means we’ll be around in the long-term to keep operating and maintaining these facilities. Are residents going to be worse- off? Our licence from Ofwat means we can’t charge our customers more than had the local incumbent provided these services. In addition, the regulators regularly check that our levels of service are at least equal to those offered by the incumbent sewerage companies. For All Business Development Enquiries Please Contact Business Development Manager Lara Day Email: lara.day@st-connect.co.uk Mobile: 07384 450 701 www.st-connect.co.uk 67&RQQHFW William Mackveley, General Manager of ST Connect 20-21.qxp_Layout 1 06/01/2023 10:16 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk 2023 BUSINESS PREDICTIONS ahead It’s that time of year, when Business Link Magazine invites the region’s © stock.adobe.com/tonktiti Looking 22-25.qxp_Layout 1 06/01/2023 10:17 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 2023 BUSINESS PREDICTIONS Ed Tripp, consultancy director at East Midlands Environmental Consultants (EMEC) There is no doubt 2023 is going to be year of change for the construction and planning sector. Under the Environment Act 2021, all planning permissions granted in England (with a few exemptions) have to deliver at least 10% biodiversity net gain from an as yet unconfirmed date, expected to be in November 2023. Now more than ever sustainability has become a key focal point for residential and commercial developers. Our role as the consultant ecologist is as much about protecting habitats as it is about offering added value advice to developers so that the communities they create incorporate diversity. I predict the role of the environmental consultant will become even more important as new biodiversity legislation is implemented. The cost of living crisis and rising inflation rates are also going to have a major impact on Government funding which under normal circumstances would be utilised for further conservations efforts. This lack of funding could also cause a skills gap within the sector. Finding the right candidates, with the right technical expertise is becoming increasingly difficult. Despite it being a challenging year, the more we support nature, the more it supports us. Andrew Macmillan, partner and office head of Gateley Nottingham The predicted decline in the UK economy for 2023/2024 will mean minimal growth. This will lead to companies restructuring to ensure they remain cost effective, while many may enter administration, leading to redundancies. If instability continues it will become harder for businesses to make decisions on investments and they will hold off until the economy improves. Unless a solution is reached in Ukraine, fuel and energy costs will unlikely improve. This will place many businesses, particularly those in hospitality and retail, under pressure and unable to survive, leading to job losses and having to close. Many retailers are moving completely online, which is more bad news for the high street. Remote working is continuing post-pandemic. Employees have got used to the flexibility hybrid working brings and some businesses may consider a purely remote workforce, removing the need for expensive office space rent, rates and utilities. This is not good news for town and city centres. Another knock-on effect is technology developments and an increase in usage of AI. Many businesses will develop solutions to enable automation of manual and routine workloads. Additionally, businesses would be advised to ensure they are familiar with the latest GDPR regulations and that they have good protection against cyber-attacks. Last but not least, the UK labour market is likely to remain very tight, resulting in low employment and rising job losses. Many companies are implementing freezes on recruitment and the minimum wage increase will impact on the potential for pay rises and bonuses for employees. Nishi Patel, Managing Director at N-Accounting We will be in recession in 2023, and in a recession it is much harder to borrow, so businesses must be far more organised with their cashflows in the coming months. If borrowing is needed it must be planned for in advance. It is vital that companies find ways to add value to their offering, and attempt to do more with the same resources. The main focus for all should be on maintaining profitability, and in order to do that, businesses must hold their nerve and, whatever the circumstances, never discount. During the 2008 recession, most businesses slashed their prices, but that caused long term issues for them when they tried to pull themselves back up. In a recession, people don’t stop spending money, they just want better value. And they are more likely to part with cash if they can see a business’s credibility. Therefore, it is important for businesses to work harder on their marketing and be specific about who they are helping. They need to ensure that their culture is clear, accessible for all and owned by the whole team so that everyone is performing at their best to remain competitive and deliver value. Finally, companies must also work harder on their solution and be clear on how they can help. Even if businesses have a dip in sales, or a quieter time, they should focus any capacity they’ve got on creating good quality content, because even if they’ve got a good solution, they need to get the word out there and tell their story. 22-25.qxp_Layout 1 06/01/2023 10:17 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk 2023 BUSINESS PREDICTIONS Sam Kirk, CEO of Clockpress Holdings, the parent company of J-Flex Rubber Products and Composites Evolution In recent years the phrase “cautiously optimistic” has been mooted, however as we head into 2023 it feels more cautious than optimistic. For SMEs in manufacturing, there are still plenty of supply chain related challenges to overcome in the New Year. Like many sectors and households, the cost of energy could have a considerable impact on manufacturing output, and although the government support provided some relief, many will be eager to see what happens once that scheme comes to an end. The raw material market remains volatile in certain areas with whispers of further shortages or price increases to come. This feels like history repeating itself – certainly over the last 2-3 years – and at times it’s felt like cartel-type behaviour by the multi- billion-dollar corporations producing the raw materials. There is hope that transport costs – whether that’s sea, air, or road – will start to return to more normal levels soon, and despite the price at the petrol pump gradually reducing, many of the “temporary surcharges” remain in place. Cashflow is also likely to be a major issue for SMEs next year. In addition to the challenges highlighted above, many businesses like ours have increased their employment costs in 2022 whether that be pay rises, bonuses, or cost of living payments. Whilst some will be able to absorb those increases, plenty of firms are still recovering from the impact of the pandemic which means that further price increases are likely next year. It’s not all doom and gloom though! That cautious approach presents opportunities and that’s exactly why my business partner, Chris Barnes, and I set up Clockpress Holdings. Our ambition is to invest in and/or acquire Midlands-based SMEs in the manufacturing sector, and we are always looking for those opportunities to expand our portfolio of businesses. Grace Golden, head of client growth at Purpose Media Without being too pessimistic, as I really hope the hype turns out to be more painful than the bite, I think most businesses will be addressing the threat of recession and reviewing their strategic plans. As has been proven from past recessions, and indeed during Covid, those that treated their marketing budget as an investment rather than an overhead reaped the benefits – as long as the activity is focused and delivers a return on investment. Bricks and mortar businesses that are proactive in implementing a digital marketing strategy will continue to lead their competitors, and I see no let-up in the demand for expertise in areas such as website content and SEO, social media, email marketing, video and PR as these are highly targeted activities that can be tracked and tweaked to get the desired results. As businesses start to reach wider audiences using digital marketing strategies, they shouldn’t dismiss the opportunity for international trading. For those that take up the support and funding available for UK businesses trading overseas they can gain exposure, growth and diversify their business. By following this constructive attitude these businesses should be able to thrive and not just survive, but I also think this approach sends positive vibes to clients and supply chain partners who will remain confident in their ability to continue to supply products and services. So, whilst I think things will remain highly volatile, especially for high street businesses and larger businesses that might find it hard to react quickly, perhaps due to restrictive property leases etc, I think as long as most UK businesses continue to market themselves effectively they should be able to make the necessary adjustments to overheads simply because they can be more agile. Finally, I think the energy crisis will continue to hit hard and we will see many businesses switch towards renewable energy and recycling to save the environment and reduce costs. 22-25.qxp_Layout 1 06/01/2023 10:17 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 2023 BUSINESS PREDICTIONS Martin Austin MBE, Managing Director of Nimbus Disability Businesses who not only meet but exceed their legal obligations to disabled people have the opportunity to boost their ethical credentials and tap into the lucrative ‘purple pound’ which could be the difference in not just surviving but thriving in 2023. There is a growing understanding amongst businesses that disability, simply put, is good for business. Disabled People themselves have spending power in the UK of circa £80 billion and their households have a spending power of c.£249bn after housing costs. This spending power is heavily influenced by their perception of a business’s ability and willingness to work with disabled customers and employees. Then there is the opportunity to embrace wider influence on disabled people’s social circles and also on how a business is perceived locally and in the wider community. Working with disabled people is therefore no longer just a case of meeting legal obligations it’s an opportunity no one can afford to miss and my heartfelt hope is that businesses take the opportunity during these challenging times to assess how they can make a difference both to other people’s lives and the credibility of their own operations. Parm Bhangal of Bhangals Construction Consultants With the interest rates continuing to increase, I expect the construction market will start to slow down in 2023 as people are forced to tighten their belts. It’s a tricky landscape to navigate currently, especially on top of what has been a testing time for the sector with all the previous challenges of Brexit and the pandemic. We have already been hit with a crippling skills shortage and long, unavoidable materials delays. The coming year will be about managing customer expectations, planning ahead and staying up to date with industry trends. Modern methods of construction and artificial intelligence seem to be slowly infiltrating the sector, and no doubt there is more to come in the coming months. Although historically, the construction industry has relied upon traditional skilled tradesmen, the workforce is now making room for the introduction of robotics, automation and computerised design to aid development and efficiency. I believe 2023 will see large developers using more robotic technology and prefabricated off-site building, especially for new house builds with repetitive structures, that can be much more systemised. But this shouldn’t concern those who provide bespoke, tailored, skilled services, which very much still have their own place. What is vital for the coming year is strategic planning. Construction firms should be looking 6 months, 12 months and 3 years ahead to forecast how their business might evolve and focus on the training and investment that is needed, ensuring you adapt to stay strong in the market. Kate Coulson of Ena HR The employment and recruitment landscape has changed massively as a result of COVID-19. Working from home was forced onto a lot of organisations and hybrid working has become the norm. In 2023 I expect this arrangement to continue to grow, particularly now that employers are looking for new and alternative ways to recruit and retain staff. Roles that don’t offer the flexibility of remote/hybrid working will get harder to fill. However, remote teams are harder to manage so businesses need to seriously consider investing more in leadership and management training. Leaders need to be more output focused to manage productivity and require additional skills for forward planning, communication and establishing efficient processes. Culture will also be huge in 2023. With everyone struggling to navigate the cost of living crisis, there is an expectation on businesses to offer pay rises. However, businesses are also seeing their costs rise and there will be many that can’t afford to. So, we will see businesses shift their focus to culture to retain top talent. What are their USPs as employers? What is the vision and common purpose? What can you offer when it comes to growth or career progression? What are your values? Lastly, there is still a shortage of workers in almost all industries. This isn’t going to change in 2023. Developing the skills of current workers to grow with the business is going to be essential. This is not just about training but also focusing on leadership ability, resilience of employees and communication. Martin Austin, right, with Nimbus colleagues Greg Bowler, left, and Mark Briggs 22-25.qxp_Layout 1 06/01/2023 10:17 Page 4 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY I t is international scientific consensus that global, human-caused emissions of CO2 (carbon dioxide) need to fall by approximately 45 percent by 2030, aiming to reach net zero around 2050, if not, the planet will keep heating up. To address this issue, a Net Zero Strategy has been published by the UK government setting out plans to reduce climate-destroying emissions and decarbonise all sectors of the UK economy. Of course, with the invasion of Ukraine and other global issues that have changed the UK economic landscape instigating high energy prices (and other inflationary pressures), the government has commissioned a review into its understanding of the impact of the different ways to deliver its net zero pathway to the UK public and economy – but still remains committed to reaching net zero greenhouse gas emissions by 2050 with Dame Meg Hillier MP, Chair of the Public Accounts Committee, stating: “The government’s net zero strategy requires government, local government, regulators, businesses, and consumers working all together to deliver its targets.” The net-zero strategy will greatly affect the commercial property industry as landlords must not rent out a building that doesn’t comply with the MEES (Minimum Energy Efficiency Standard) ZERO Net planning The rules are in and the property industry must comply – we look into what people should expect as we move into 2023. 28 Á 26-29.qxp_Layout 1 06/01/2023 10:19 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link COMMERCIAL PROPERTY © stock.adobe.com/Stefan_E 26-29.qxp_Layout 1 06/01/2023 10:19 Page 2 East Midlands Business Link COMMERCIAL PROPERTY regulations, with an E rating being the minimum for a valid EPC (Energy Performance Certificate) currently and then, from 2025, all newly rented properties will be required to have an EPC rating of C or above. Many commercial landlords may feel content knowing their buildings are already rated E or better but need to be vigilant as the Government has set a target of lifting the MEES regulations, relating to the letting of non-domestic buildings, to a B by 2030, and this will affect approximately 85% of the UK’s non-domestic rented stock - helping the UK achieve its target of net-zero carbon emissions by 2050. EPCs indicate; how energy efficient a building is and gives a rating from G (inefficient) to A (very efficient), states how costly powering the property would be and how high its carbon emissions may reach (calculation methods differ between England/Wales and Scotland as a building located in Scotland tends to have a lower rating than would 26-29.qxp_Layout 1 06/01/2023 10:19 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link COMMERCIAL PROPERTY apply to the same building located in England/Wales). Tips to help improve an EPC rating anywhere and also improve property value can include: * converting a building to LED lighting systems which can reduce lighting costs by up to 50% and adding lighting controls, such as occupancy sensing and daylight harvesting lights, avoids wasting light energy in unused spaces and in the middle of the day as inefficient lighting is one of the biggest contributions to CO2 emissions and a low EPC rating * implementing well insulated lofts and cavity walls can improve ratings and correct insulation and also helps reduce noise pollution * upgrading windows to new, high quality double glazing which helps to retain heat * investing in better heating, venting and air conditioning systems to help energy efficiency * switching to renewable energy such as Solar/Photovoltaic panels, biomass, wind turbines and geothermal heat - many commercial properties use energy consistently, especially during the day, which coincides with the peak supply of renewable energy. The new EPC ratings are being phased in with interim milestones as the Government estimates about 10% of non-domestic rented buildings are below the ‘E’ rating, and so, by 1 April 2023, a landlord will only lawfully be able to continue to rent out a non-domestic building if it has an energy rating of E or above. Commercial property landlords also need to remember that even though they may have obtained a valid certificate when the lease was granted on a building - it could have expired as EPCs only have a 10-year lifespan - a current EPC is necessary the whole time that a property is let and this includes during leasing renewals. A further tightening of standards will take place on 1 April 2027 requiring all commercial property EPCs to have a minimum rating of C. Landlords will have to either demonstrate they comply by 1 April 2025 or use the following two years to ensure they do comply - if a property already has a C rating in April 2025, the landlord will be in compliance. The next interim milestone window is 2028 to 2030 whereby landlords will need to present a valid EPC by 1 April 2028 and from 1 April 2030, the minimum rating increases to B. If a commercial property already has a B rating in April 2028, the landlord would be in compliance again but if not, a landlord needs to present a new EPC with a B rating by 1 April 2030 or register an exemption if necessary. Non-compliance with MEES regulations can result in enforcement action and a fine but an EPC doesn’t need to be presented if a building is listed, temporary (only erected for a maximum 2 year), a place of worship/other religious activity, an industrial site, workshop, non- residential agricultural building that doesn’t use much energy, a detached building with floor space less than 50 square meters or a building due to be demolished. Finally, new ‘shell and core’ lettings, renting of a commercial unit in a stripped-out condition so tenants fit it out with heating and lighting at the point of letting, the EPC for these units are likely to be ‘F’ or ‘G’ rating, making it unlawful for letting. So, compliance options would include giving early access to the tenant to fit out the unit or the landlord installing items that the tenant replaces if necessary - the landlord is always required to hold a valid EPC at the point of letting and remember that the tenant’s fit-out may have an impact on the EPC rating. All EPCs are only produced by an accredited energy assessor who will visit the property to carry out an assessment and will then lodge the EPC on a national register. An EPC must be displayed by fixing it to a commercial building if the total useful floor area is over 500 square metres, the building is frequently visited by the public or an EPC has already been produced for the building’s sale, rental or construction. If in doubt about any EPC ratings or requirements seek professional advice or go to - www.gov.uk/energy- performance-certificate-commercial- property - which has everything up to date on this new, climate changing landscape. © stock.adobe.com/hansenn © stock.adobe.com/WATCH_MEDIA_HOUSE 26-29.qxp_Layout 1 06/01/2023 10:19 Page 4Next >