Business News Round Up (10/02/2025)
UK Government opens bidding for new AI Growth Zones
Local authorities across the country are being encouraged to put their communities forward to become a dedicated hotbed for AI infrastructure development, and potentially attract millions in investment. As the UK Government begins ramping up its much heralded Plan for Change, focus will be given to deindustrialised areas of the country in the hope of transforming them into ‘AI Growth Zones’. Under the plans, councils and regional authorities are able to submit proposals for such sites, with the government taking particular interest in those with existing access to power or which might be suitable to establish major energy infrastructure. Energy companies, data centre developers, and others in industry are also being called upon to help drive forward the plans, with timelines, development milestones and partnership opportunities that will help to inform the final selection of sites and broader policy decisions later this year.
https://www.digit.fyi/uk-gov-opens-bidding-for-new-ai-growth-zones
Firms cut jobs and hiring plans ahead of April hikes
Companies cut jobs or slowed their hiring plans last month at the highest rate in a decade in a worrying trend ahead of April’s increase in staff costs. Data compiled by accountancy and advisory firm BDO showed private sector employment dipped to its lowest since November 2012, while business confidence has fallen to a two-year low. Researchers at the Recruitment and Employment Confederation (REC) and big four accountant KPMG found vacancies were at their weakest level since August 2020, when the economy was in the grip of Covid. Permanent staff demand has now fallen for the past 17 months. The Chancellor’s October budget introduced a 6.7% rise in the minimum wage and a jump in the main rate of employer NICs to 15% from 13.8%. The earnings threshold that triggers the tax will fall from £9,100 to £5,000 a year.
North of England SMEs struggle as growth forecasts hit nine-month low
Small business growth forecasts in the North of England have fallen sharply, with a rising number of SMEs predicting contraction or even closure, according to new data from Novuna Business Finance. Following the Bank of England cutting interest rates and reducing its economic growth forecasts for 2025, the new data reveals that UK small business owners are already gearing up for contraction, with major falls in growth forecasts already registered across many key regions – where there has been abrupt change since the start of 2025. The Novuna Business Barometer, which tracks quarterly growth predictions from over 1,000 small business owners, shows that whilst 45% see Q1 as a standstill period, there is a four-year high in the percentage of small businesses saying they will contract by the end of March (13%) and the percentage of enterprises that fear closure in the next three months has hit a two-year peak (8%).
AI at the forefront of £14 million Scottish public sector innovation programme
Artificial intelligence is being used to spearhead a range of cutting-edge solutions in Scotland’s public sector – from reducing cancer risk for firefighters to monitoring puffin colonies. Fourteen companies on the latest round of the Scottish Government’s ‘CivTech’ programme are in line to be awarded up to £9 million to deploy the tech – to tackle challenges faced by the public sector and charities. CivTech 10 is the first round of the programme to focus on AI as the technology becomes increasingly the focus of innovation across multiple sectors, including government. Previous rounds of CivTech have seen £20 million invested into 90 companies and entrepreneurs since 2016. These include software company Volunteero which developed a mobile app to help charities manage administrative tasks.