Business News Round Up (19/08/2021)
Covid impacts Scotland’s finances
New figures highlight the impact coronavirus has had on the economy and public spending in Scotland. The Government Expenditure and Revenue Scotland (GERS) 2020-21 statistics show record public spending of £99.2 billion, an increase of 21% on 2019-20. This increase reflects the scale of Scottish Government support during the pandemic, with £9 billion invested in public health measures, NHS Scotland, businesses, and financial help for individuals. Revenues totalled £62.8 billion, down from £66.2 billion in 2019-20. This includes a drop in North Sea receipts of 35% as worldwide demand for oil and gas fell sharply, as well as lower receipts from non-domestic rates and VAT. In common with countries around the world, the significant rise in spending caused by COVID-19 meant Scotland’s notional deficit, the difference between income and expenditure, rose – up 13.6 percentage points to 22.4% of GDP.
Low interest in job seeking ‘adding to shortages’
Only 11% of workers who are on furlough or not working are actively seeking a job and are contributing to the current shortage of staff, according to new research. Some seem “relaxed” about finding work and one recruitment economist has warned that many may find the situation changing when the furlough scheme ends, and employers decide they are no longer needed. The labour market has rebounded strongly since the end of lockdown, with the unemployment rate falling to 4.7% across the UK and job postings surging past pre-pandemic levels. At the same time, employers across a range of sectors – from chefs and lorry drivers to bar staff, hairdressers, and vets – are struggling to fill vacancies. Research by jobs website Indeed suggests a lack of urgency among many of those not working or on furlough to find a new role may be contributing to these challenges. Overall, just 7% of all workers surveyed, including those working full or part-time, said they were urgently seeking a new role, rising to 11% among those on furlough or unemployed.
Scottish scale-ups record levels of venture capital investment
Venture capital (VC) investors continue to deploy record amounts of money into Scottish scale-ups, with more than £322.3m raised in the first half of 2021. The latest quarterly report published by KPMG Private Enterprise, using PitchBook data, recorded more than £258m invested into fast growth Scottish businesses in the second quarter. A strong Covid-19 vaccination programme and greater business confidence in the post-Brexit environment resulted in 60 deals being completed during the second quarter, up from 20 the previous quarter. Providers of consumer products and services, as well as healthcare businesses, attracted the largest deals in the second quarter, including £36.17m raised by Glasgow-based culinary tech business Enough, in a deal led by Nutreco and Olympic Investments. Edinburgh-based Current Health also attracted more than £31.42m in a deal led by Northpond Ventures. Later stage deals continued to attract the most investment in Scotland, but interest in earlier stage deals grew with more businesses beginning to raise Series A and smaller rounds.
https://www.insider.co.uk/news/scottish-scale-ups-record-levels-24785113
£21bn UK student economy is good news for retail + hospitality, reveals new report
New figures released today unveil the surprising value of the UK student market. Uncovered by Student Beans, the online platform providing success for businesses with Generation Z, these new findings highlight the lucrative reality of the student economy and why Gen Z is more financially savvy than we think. In total, around 2.4 million students enrol in university programmes across the UK. Of this figure, 94% of eligible students take out student loans via Student Finance England to fund their degree fees, maintenance costs – or both. Almost a quarter (23%) of students have additional sources of income from part-time work, and 1 in 5 UK students are supported financially by their families. The latest 2021 figures reveal that in total, UK students are collectively receiving an annual income of£20.9 billion – an average of £8,725 per university student. Of this figure, Student Beans reports that UK students are spending £12.7 billion per year. Despite the significant amount of disposable income, Gen Z students are making sensible purchasing decisions, with findings revealing that students are splitting essential and discretionary purchases close to 50:50.