3. Finance and Investment
3. Finance and Investment
This note accompanies workbook 3, Finance and Investment, and provides high level commentary on what the information illustrates.
Tax receipts
Residents and businesses in the West of England LEP contribute an estimated £3.3 billion in taxes to government through Council Tax, Business Rates and Income Tax. The estimate for total tax contribution from the LEP is roughly £10 billion (assuming the LEP area’s contribution from income tax, business rates and council tax is representative of its total contribution).
Small and Medium Sized Businesses Borrowing
Unfortunately data at a West of England level is unavailable however national figures saw a rise in approved finance applications during the first quarter of 2013 for smaller and medium sized businesses. The recent decision to extend the Funding for Lending Scheme for a further year should encourage businesses to be more confident in their financing options.
The first quarter of 2013 saw £1.5bn new loans for smaller businesses, and £3.5bn for medium sized businesses. During the same quarter small businesses repaid £1.8bn of existing loans, while medium businesses repaid £.38bn.
Nationally there were 492,900 finance applications throughout 2012 (408,800 applications from smaller businesses for loans and overdrafts and 42,000 for loans in Q1, reflecting a seasonal improvement in demand in the first quarter of the year, particularly from smaller businesses.
Application approval rates Q1 2013
Smaller businesses – Loans 73%, Overdrafts 74%
Medium businesses – Loans 90%, Overdrafts 93%
For full report produced by the BBA please use the following link:
Foreign Direct Investment
The UK has, for the past 5 years, been the number 1 destination for Foreign Direct Investment (FDI) in Europe. This investment is spread across the priority sectors with key origins being USA and Western Europe. The BRIC countries provide a relatively small number of investments to their economic size. The UK Figures for FDI are skewed by the large number of (smaller scale) investments which land in London, these tend to be sales offices for US/Asian companies looking for an initial foothold in Europe.
The West of England attracts approximately 1% of FDI projects that come into the UK. These, like the UK wide figures, are spread across sectors and markets although there is a correlation with our priority sectors. Major FDI projects include Airbus (AAE, 300 jobs) Nvidia (Mirco-electronics 100 jobs) and Vestas (Low Carbon).Since 2008 the FDI figure this has equated to an average of 8 projects a year, with an average of 89 jobs being created per project.
Visitor Attractions and Hotel Room Sales
The visitor economy provides a dynamic indicator of the health of the local economy. With a buoyant and growing visitor economy indicating that people are spending in the area, and consequently supporting the local economy. Conversely a stagnated or shrinking visitor economy shows the opposite.
Numbers to visitor attractions in the West of England follows an annual pattern of peaks and troughs, peaking during the summer months and dipping over the winter. In the 1st quarter of 2013 the number of visitors to attractions in the West of England were marginally down on the 1stquarter of 2012; but up on the previous quarter (Q4 2012). Whereas, room occupancy for the 1st quarter of 2013 was up on the same period for 2012 but down on the previous quarter. Both the number of visitors to attractions and room sales for on Q3 of 2013 were up on the 3rd quarter of 2012.
The West of England is in a strong position to target both the domestic and foreign holiday market due to its diverse offer, from the historical World Heritage City of Bath, the cultural vibrancy of Bristol, traditional seaside of Weston‐super‐Mare and beautiful surrounding English countryside. The business market also contributes significantly to the local visitor economy, and should be developed alongside the holiday market.