Surge in new tech start-ups in the East as early-stage businesses thrive in ‘great environment’
The resilience of the region’s tech sector has been highlighted by figures showing that the number of new technology companies incorporated in the East of England leapt by 31 per cent to a record 3,730 last year – the largest increase across the UK – and up from 2,853 previously. Laragh Jeanroy, office managing partner, RSM Bury St Edmund, said: “The tech ecosystem in the East of England provides a great environment for early-stage businesses to thrive, with access to cutting-edge ideas and research, funding, and collaboration. So, it will come as no surprise that the region is leading the way with a record increase in the number of new technology companies incorporated in the year – a trend we expect to see continue.” National data shows a total of 51,017 tech companies were incorporated in the UK last year, up 22 per cent from the year before. Key sub-sectors that saw significant growth included software developers, data businesses and IT consultancies. Tech incorporations in London rose by more than a quarter on the previous year’s figure to 26,060.
Ben Bilsland, partner and technology industry senior analyst at RSM UK, added: “The rise in tech incorporations shows there is cause for optimism in this key industry….. But the sector has, and continues to be, marked by layoffs, so it may be that these members of the workforce have been confident enough to go it alone, thereby fuelling incorporation growth.” He also pointed to AI as a driving force behind UK tech incorporations.
Pharma giant to invest £200 million to expand Cambridge life sciences operation
AstraZeneca is planning to spend £200 million to expand its expand its operation in the Cambridge life sciences cluster as part of a £650 million investment in the UK announced by the pharmaceutical giant on Budget day last week. The new facility in Cambridge will house around 1,000 employees and will be next to its £1.1 billion global R&D Discovery Centre which has 2,300 researchers and scientists. The company also plans to invest £450 million to produce vaccines in Speke, Liverpool (photo) and open a new manufacturing facility for one of its cancer medicines in Macclesfield later this year. The government highlighted the investment in the context of full expensing which it says gives the UK the most generous regime for capital allowances in the G7. Chancellor Jeremy Hunt said: “To drive investment we’ve delivered one of the most competitive business tax regimes of any major economy, as part of our plan to help our key industries to grow. Our £108 billion life sciences sector provides over 300,000 high skilled jobs across the UK and is crucial for the country’s health, wealth and resilience.”
Growth expectations climb as region ‘moves up a gear’
Growth expectations for this year have surged after firms in the region saw their first rise in new business in eight months in February according to a key survey of purchasing managers. The NatWest East of England future activity index posted its second-highest reading since it was first compiled in 2012 as hopes rise of an economic recovery as interest rates and inflation fall. The East of England ranked second among the 12 regions, with only the South East registering a stronger outlook. Meanwhile a business activity index for the region posted 53.1, up from 50.7 in January, marking the joint-strongest growth in 22 months. New business rose for the first time in eight months and employment growth was sustained. Rashel Chowdhury, NatWest Midlands and East regional board, said: “The East of England moved up a gear in February, as renewed new business growth boosted output. Moreover, the 12-month outlook for growth was the second-highest since the expectations series began in 2012. Companies are widely anticipating an economic recovery spurred by lower inflation and interest rates. Cost pressures eased for the first time in four months but charges were raised at the strongest pace since last April, so price pressures still have some way to go to return their long-run trends.”
Planning permission sought for major new distribution hub in mid-Suffolk
A planning application has been submitted to Mid-Suffolk District Council to build a significant new distribution hub at Gateway 14, Stowmarket, for a major supplier of eco-friendly construction materials. The 44,000 sq ft unit will be delivered via a freehold development agreement by property developer Jaynic, acting as developer partner for Gateway 14 – a subsidiary of Mid Suffolk District Council. Pending planning permission, construction is expected to start on site in the early summer. Jaynic development director Ben Oughton said: “We are pleased to be making strong headway at Gateway 14 where potential occupiers see the benefits that Gateway 14 provides with its freeport status as well as underlining its locational advantages sitting next to Junction 50 of the A14 providing direct trunk road access into the UK motorway system. This follows on from the 1.17m sq ft distribution hub building for The Range that was completed at the end of last year and will be in occupation before the Autumn.”
Concerns raised over Haughley and Ely rail improvements after Budget ‘cuts’
Suffolk Chamber is raising concerns with ministers, shadow equivalents and MPs that significant cuts to transport budgets announced in the Spring Budget will further delay key work to improve the key rail junctions at Haughley and Ely. The chamber says that although chancellor Jeremy Hunt committed to a one per cent rise in real terms for public spending for the next 12 months, official Budget figures appear to show that the Department for Transport’s resource spending in 2024/25 will fall from £8.2bn this year to only £5.7bn. Stephen Britt, chair of Suffolk Chamber’s transport & infrastructure group, said: “In spite of an outline business case showing that for every £1 spent on upgrading the junctions there would be nearly £5 in economic and environmental benefits, the project has not been progressed by government. This news of big departmental cuts further reduces the chances that the necessary work to significantly move the project forward will begin in the near future – if at all.” Haughley junction, north of Stowmarket, connects the London to Norwich mainline with the branch line to Newmarket, Peterborough and the Midlands. Rail lines from Peterborough, King’s Lynn, March, Cambridge, Ipswich and Norwich all converge on Ely.
Separately, the government gave the green light to the next section of East West Rail, accelerating works to allow trains to run from Oxford to Bedford to run by the end of the decade.
Plans for Cambridge growth take shape in Spring Budget
Government plans to grow the Cambridge economy and deliver new homes by 2050 along with a development corporation for the city to receive a long-term funding settlement emerged in last week’s Budget. Meanwhile, an extra £7.2 million is to be spent to unlock local transport improvements between the Cambridge Biomedical Campus and the city £3 million is to be made available for growth at Cambridge University NHS Trust. Various water saving measures are also planned which could unlock more than 9,000 homes in the Cambridge area.
Funding for towns
Meanwhile, four towns in the region – Thetford, King’s Lynn, Harlow and Wisbech – are set to receive ten years of funding and support worth up to £20 million apiece to invest in communities and regeneration under the government’s £400 million Long-Term Plan for Towns scheme.
Political cycle
Paul Simon, Suffolk Chamber’s head of public affairs, said: “Essentially, this fiscal event seems to owe more to the political cycle than the economic one. Suffolk was hoping for better – and we certainly deserve better. However, it looks as if Suffolk Chamber has secured one lobbying part-win. The Government has committed to improving the functioning of the R&D Tax Reliefs system by asking HMRC to establish an expert advisory panel to support the administration of R&D reliefs. Suffolk Chamber has been campaigning to reverse HMRC’s current punishment regime which is directly and negatively impacting hundreds of Suffolk SMEs.”
Matt Moss, chair of Suffolk Chamber’s economy group, said: “At a time when core business health indicators – investment, cash flow and sales and orders – are at their lowest levels since the pandemic, this Spring Budget offers comparatively little against these criteria. Treasury approval for the Ely/Haughley rail junctions still remains uncertain, nothing seems to be being done to address the complex and confusing business rates system, and the future funding after March next year of employer-led Local Skills Improvement Plans hang in the balance.”
Tax incentives
Colin Low, chartered financial planner and managing director of Kingsfleet, said: “The chancellor has listened to a number of influential commentators looking for tax incentives for investing in British business. There is to be a review to see if more pension assets can be invested both in British businesses and in high-growth areas where UK smaller companies require long-term patient capital. Likewise, he has provided the potential to increase annual ISA contributions through the ‘British ISA’ which will allow a further contribution of £5000.”
He added:”There have been concerns raised regarding the strength of the UK stock market, so it is encouraging to see investment in British business being further incentivised through the tax system.”
Husband and wife team buy Southwold Pier with plans to invest
A husband and wife team who run an events business, Amy and Charles Barwick, have acquired Southwold Pier for an undisclosed sum from Curious Pier, part of the Gough Hotels group. Law firm Howes Percival advised the new buyers, who are co-owners of Pineapple Events Solutions, which makes bespoke chalets and provides food & drink and event management for visitor destinations. The original Southwold Pier was built in 1900 as a landing platform for the Belle steamships arriving from London Bridge. The present main building dates back from major refurbishment in 1937 but most of the pier was rebuilt in 1999-2001 to 623ft. Charles Barwick said: “We are looking at an initial light refurbishment in places, but this will be phased, as we plan to keep the other areas open to the public as we go. We have great plans to invest in the pier and its facilities.” Howes Percival advised the buyers on all the legal aspects of the deal.
Fast growing spray painting company opens new premises in Norwich
Norwich-based Cladspray Solutions, a commercial spray painting company which features in the the FT’s Fastest Growing Companies list, opened new state-of-the-art premises in the city last week. The new 11,500 sq ft facility on Mason Road has purpose-built offices and a renovated warehouse and provides space for its in-house training program. Representatives from Lotus, Bluespace, and Ovamill attended the event for around 200 guests where former Norwich City FC captain Grant Holt cut the ribbon. Founded in 2013 by managing director Tom Carter, Cladspray Solutions has emerged as a leader in industrial coatings, picking up numerous awards and featuring on the FT’s Fastest Growing Companies list for the third year running. Tom Carter thanked the company’s employees and reiterated a commitment to innovation and supporting the local community.
New senior partner elected at law firm
Law firm Birketts has elected Chris Schwer, the firm’s UK head of property, as its new senior partner to succeed James Austin from 1 April. Having trained at Birketts between 1986 and 1988, Chris Schwer returned to join the firm in 2000 and became head of property in 2005. He specialises in all aspects of commercial property matters, acting for many of the region’s leading investors, developers, landlords, tenants, funders, and charities. Chief executive Jonathan Agar, said: “Over the last 24 years, Chris has played a key role in Birketts’ evolution. Since he took the helm of our property practice in 2005, it has seen more than a seven-fold increase in fee income, and has become our largest practice area by revenue and fee-earners.”
Chris Schwer said: “During my time at the firm, I have taken pride in mentoring and assisting colleagues in their careers at Birketts. When taking on the role of senior partner, a key focus area will be on encouraging social mobility, and promoting the various avenues that exist for those from all walks of life to get into the profession.” James Austin will remain a member of the firm’s corporate team and will also be acting on an interim basis to assist its commercial and technology team, as well as continuing to manage the firm’s complaints process. Jonathan Agar, adds: “The fact that we have retained the firm’s unique culture throughout the last few years of rapid expansion is testament to James’ care and guardianship.”
Photo: James Austin (left) and Chris Schwer
Labour government to focus on ‘growth and stability’ shadow chancellor tells businesses
A future Labour government would focus on economic growth and bringing back stability and confidence to the UK economy, shadow chancellor Rachel Reeves told an audience of 100 business people from Suffolk at a recent event in Ipswich. The event was sponsored by PLMR Genesis and hosted by Labour’s parliamentary candidate for Ipswich, Jack Abbott. Tim Miller, managing director of PLMR Genesis, said: “It was fantastic to have so many businesses from Suffolk at the event and hearing from the shadow chancellor in what will be a pivotal year for politics and the future direction of the country. We look forward to hosting more events in the future for the local business community.” A PLMR Insights Paper – 2024: The Year of the Long Campaign – launched on 1 February examines the political landscape and gives an insight into the views and perspectives of voters as the UK heads into a General Election.
