Trade Credit Insurance claims in Northern Ireland reach 10-year high

The Head of Trade Credit Insurance at Willis Towers Watson has said that the level of pay outs on Trade Credit Insurance policies have reached a 10 year high in Northern Ireland.

Nigel Birney, Head of Trade Credit at Willis Towers Watson, has warned that the spike in Credit Insurance claims is a reflection of challenges facing Northern Ireland companies as the number of business insolvencies increase at an extremely worrying rate.

Against the backdrop of Brexit and the continuing limbo unlikely to offer any significant respite from the pressures weighing on the local economy, the trading environment in Northern Ireland continues to face challenging times, particularly in the Construction, Retail, Food and Recruitment sectors.

However, in many cases, claims payments from Trade Credit Insurers have offered a lifeline to hundreds of NI businesses, with pay outs in 2018 at significant levels.

Nigel Birney, Head of Trade Credit at Willis Towers Watson said:

“The increase in claims is a barometer of what is happening in the wider local economy and unfortunately it doesn’t bode well.”

Nigel Birney

“We are now at a 10 year high in terms of pay outs which is a clear indication of what is going on. In 2018 we estimate that around £8million in claims was paid to Northern Ireland companies as a result of the failure of one of their customers and unfortunately the trend has continued into Q1 2019 with the failure of a number of high profile local companies.”

“For a business to thrive, risk mitigation is key and protection against non-payment is arguably more vital now than ever before. NI businesses are increasingly turning to Trade Credit Insurance to build that protection around them as well as leveraging the resources of the Trade Credit industry to access critical business intelligence to help make informed business decisions, recognising that avoiding a risk is as important as protecting against it.”

“Our market intelligence informs us that many companies out there are feeling enormous strain on cashflow and that the average Days Sales Outstanding (DSO) is starting to creep up which is bringing many to the brink of failure, particularly in the construction and retail sectors, however all sectors are suffering and this view was validated in a recent press article by leading Insolvency Practitioner Begbies Traynor who have suggested that around 7000 businesses in Northern Ireland are in financial distress.”

“This is starting to manifest itself in the revision of economic forecasts such as that announced by Danske Bank just a couple of weeks ago who trimmed down their growth outlook for 2019 by some 0.2%.”  

He added:

“However, on the flip side, the increase in the number of claims also indicates that an increasing number of more risk aware local businesses use Trade Credit Insurance to complement their own internal credit control procedures and protect themselves against trade debtors defaulting in payment, which in many cases has saved their companies from that catastrophic failure experienced by others.”

Leading insurer Atradius has confirmed that the number of recent claims being made in respect of Northern Irish businesses defaulting or failing has increased significantly representing the highest volume of claims received in a decade. They also state that there has been a 50% year on year jump with increased incidences of high value claims, those above £90k, in 2018.

Tony Gordon, Head of Risk Services at Atradius Ireland said:

“The trading environment for business in Northern Ireland continues to be challenging. 2018 was a tough year for businesses and for the economy and the figures for Q1 2019 are showing no degree of comfort that a recovery is imminent with upward trend in claims volumes continuing.”

“Headline news often pinpoints key sectors such as construction and also foods and agriculture, but in reality, the challenges impact across all sectors. The key is to have access to up to date information and as underwriters it is vital for us to work closely with businesses, constantly monitoring changes and impacts. It has always been important to us to get out and meet businesses face to face and in today’s climate these regular touch points are more valuable than ever.”

“Credit managers already know that success hinges on keeping supply lines open and the flow of information to enable informed decisions is a critical factor. Our constant monitoring and access to real-time information enables Atradius to maintain our risk appetite, even during challenging cycles. Despite the current climate, we are continuing to support in excess of £1bn of trade in NI enabling our customers to continue to grow their businesses.” 

Live NI Consultations from Brown O'Connor Communications

• Reforming the UK packaging producer responsibility system Department of Agriculture, Environment and Rural Affairs. Deadline 13 May.

• Western Transport Corridor Environmental Statement Addendum: Notice of Publication Department for Infrastructure. Deadline 17 May.

• Belfast PCSP Strategic Assessment and Action Plan 2019/20 Belfast City Council. Deadline 29 May.

• Timetable and Work Programme for the Preparation of the Northern Ireland Flood Risk Management Plan 2021-2027 Department for Infrastructure. Deadline 28 June.

• Connect, Invest, Transform Lisburn and Castlereagh City Council 10 year investment plan. Deadline 30 June.

• Draft Disability Action Plan 2019-20 Belfast City Council. Deadline 9 July.

• A City Imagining – Cultural Strategy 2020-2030 Belfast City Council. Deadline 10 July.

• Reshaping Breast Assessment Services Department of Health. Deadline 19 July.

• Reshaping Stroke Care Department of Health. Deadline 19 July.

Retail NI and Hospitality Ulster Welcome Business Rate Review

Retail NI and Hospitality Ulster have both welcomed the announcement by the Department of Finance that a comprehensive review of business rates is to be held. The Department of Finance Permanent Secretary Sue Gray made the announcement today at the Retail NI-DWF Local Government conference at Titanic Belfast.

This Review had been a long-time objective of both Retail NI and Hospitality Ulster.

The Chief Executives of Retail NI and Hospitality Ulster Glyn Roberts and Colin Neill said:

“Both our organisations are delighted that the Department of Finance has announced this review into non-domestic rates. We have consistently lobbied for this over a number of years and are pleased that our joint call has been heard.”

“While this is not an end in itself, it is a means to an end. This review provides us with a roadmap for radical change to an antiquated and not fit for purpose system of business rates which is a major burden for our members.”

“In this review we will be outlining significant changes to Rates, including our proposals for a targeted approach to small business rates relief, a revamp of the Rates Hardship fund, green rates rebate for businesses who invest in carbon neutral technology and greater relief for new start businesses.”

“At the last UK Budget, the Chancellor gave independent retailers and hospitality businesses a third off their rate bills in England. We want nothing less than this for our members in Northern Ireland.”

Eversheds Sutherland bolster banking team with new Senior Associate

Eversheds Sutherland in Belfast has announced Damian McElholm as a new Senior Associate.

McElholm will join the banking group of the international firm bringing considerable experience of advising on large value and complex banking and finance transactions.

Prior to the Eversheds Sutherland appointment, he advised international financial institutions, leading renewable energy groups and acted for a private equity fund.

The announcement comes at a time of growth for the firms Belfast operation who recently announced the appointment of two new partners in Matthew Howse and Lisa Bryson, with total headcount in the Belfast office set to reach 30 in the next year.

The Belfast office works closely with the growing Dublin office, including in providing legal services to clients, including a specialist “Brexit Hub”. The two offices have also recently worked together to deliver high-profile Brexit advice events with the Chambers of Commerce in Newry and Derry.

Eversheds Sutherland Ireland managing partner Alan Murphy said:

“We are thrilled that Damian has joined us, bolstering the firm even further as we move into a period of expansion in Belfast and Dublin.”

“The uncertainty in the current political climate has made top tier legal advice even more important and our clients will really benefit from Damian’s experience in high-level, complex financial transactions. We’re responding to clear demand for trusted advice in a time of political and economic uncertainty and Damian will play an important role in that response.”

New Eversheds Sutherland, Senior Associate, Damian McElholm added:

“This is a wonderful opportunity to play a leading role in the development of the Eversheds Sutherland presence not only in Belfast, but in Dublin and throughout its international offices.”

“Eversheds Sutherland has grown from strength to strength in recent years and has become a byword for excellence in the legal profession in Northern Ireland. This move is a fantastic opportunity and I’m looking forward to the challenges ahead.”

Belfast City Centre Office Block sold for nearly £1.4m

A prominent office block on Chichester Street in Belfast City Centre has sold for nearly £1.4 million. The Grade A office space at 15-17 Chichester Street boasts over 6,300 square feet across 5 floors in one of the city’s prime locations.

The sale of the property to a private investor adds to the growing number of recent developments and transactions on Chichester Street alongside the likes of HMRC’s Erskine House located opposite, Wirefox’s The Paper Exchange and Chichester House next door, currently under redevelopment.

The completed deal comes at a time when the Belfast office market has been described as “buoyant” with occupier demand focussing the attention of investors and developers.

The building is currently occupied by law firm Hool Law who remain as the tenant.  

Neil McShane, Director of Commercial Property Investment Consultancy, INPRIO, who managed the sale said:

“As anticipated, we experienced high levels of interest in the property, with the successful buyer purchasing it for nearly £1.4m, equating to a net initial yield of 6.7%.”

Neil McShane, Director of INPRIO

“Not only was the property an attractive proposition, it is located in a prime location on Chichester Street which is experiencing a renaissance with an emerging mix of Grade A office space, co-working spots, retail outlets and hospitality venues which is a shining example of what can happen in other parts of the city.”

“The investment market in early 2019 is slowly but surely starting to pick up with a number of assets coming to the market. We are now marketing a number of investment properties which we expect will generate strong interest from local investors.”

Mark Riddell, Director of Property Consultancy, Riddell McKibben, represented the undisclosed buyer in the deal.

Hospitality Ulster has met with NI Secretary of State and Shadow Secretary of State calling on them to intervene on knee jerk ‘Special Event’ consultation by Department for Communities

Colin Neill, Chief Executive of Hospitality Ulster

Hospitality Ulster has met with NI Secretary of State and Shadow Secretary of State calling on them to intervene on knee jerk ‘Special Event’ consultation by Department for Communities and to address overall outdated liquor licensing laws.

Hospitality Ulster has met separately with the Northern Ireland Secretary of State, Karen Bradley MP and the Shadow NI Secretary of State Tony Lloyd MP this afternoon at Westminster calling on them to urgently intervene on Northern Ireland’s outdated liquor licensing legislation.

The meetings took place after huge concerns were raised by the hospitality sector and major representative bodies in Northern Ireland who were left flabbergasted that the Department for Communities launched a consultation to make a small tweak in legislation, largely to benefit the company running the hospitality services at the forthcoming British Open in July.

Hospitality Ulster has led the charge to convince elected representative to overhaul the outdated liquor legislation to benefit the sector, enhance the visitor and tourist experience and the wider economy. Whilst there has been significant backing for the changes, little action has been under taken after the collapse of the Assembly.

Colin Neill, Chief Executive, Hospitality Ulster commented after the meetings:

“Whilst we welcome the fact that the Open is coming to Northern Ireland, we need to look at the whole picture and not just pander to the company running the event because they want to sell more drink outside of the current permitted hours.”

“We made it very clear to the Secretary of State and the Shadow Secretary of State that this small change does absolutely nothing for local pubs and restaurants who will be missing out on the revenue. Once The Open packs up, the hospitality sector will be left to operate with the same outdated laws that it has struggled with for years.”

“Just because the big boys roll into town and complains, our civil servants are bending over backwards to rush through legislation even though there is an entire Bill sitting on the shelf ready to go that will address many, if not all of these issues. They need to listen to the rate paying businesses here”

“If this element of the legislation can be changed on a whim, then the wider issues can be dealt with. It couldn’t be more obvious.”

“If this consultation progresses in isolation of wider reform it will be regarded as favouritism towards companies outside Northern Ireland and not looking after the people and businesses the politicians are here to represent.”

Brown O'Connor Communications One Page Brief: Sinn Fein Local Council Manifesto - April 2019

On 15 April, Sinn Féin launched their manifesto for the upcoming 2019 local government elections at an event in Ballymena. Below are some of the key policies from that manifesto:

Regeneration

Councils must promote social value in the procurement process.

Resource locally based tourism projects, which can help boost the hospitality industry.

Support City Deals in Belfast and the North West.

All councils should have clearly mapped out regeneration plans specific to their area.

Agree a new partnership between Executive Departments and local government to share financial obligations of regeneration more equally.

Economy

All councils should pay at least the living wage of £9 per hour.

Every household should enjoy at least 10mbps broadband.

Continue to oppose changes to Sunday opening hours.

Housing

An increase in social housing.

The NIHE must review the method of calculating how many new homes are needed each year.

Every development must include a percentage of social and affordable housing.

Rights and Legacy

A citizen’s charter in every council, much like the Belfast City Council 2018 Mayor’s Charter.

An Irish language policy and Irish language officer in every council.

Introduction of the legacy mechanisms agreed in the Stormont House Agreement.

Cross-border cooperation

Campaign for a Unity Referendum in the near future.

Work to increase cross-border cooperation on education, health and the economy.

Lobby for a 2019 referendum to allow Irish citizens outside the Republic of Ireland to vote in Presidential elections.

Click here to read the full manifesto.

Brown O'Connor Communications One Page Brief: Belfast Region City Deal - April 2019

Last month, the Secretary of State for Northern Ireland, Karen Bradley MP, signed the Heads of Terms alongside the Belfast City Regional Deal partners and the NI Civil Service. The deal is expected to see the delivery of more than 20 projects to help create up to 20,000 new and better jobs, with an annual GVA impact of £470 million.

Who’s involved?

The partners include: The UK Government, Northern Ireland Departments (in the absence of an Executive), Queen’s University, Ulster University and 6 Councils.

Governance

A Joint Council Forum and a Programme Board supported by Steering Groups who will develop programmes in each of the Investment Pillars.

As Belfast City Council is expected to act as the lead authority and accountable body, the Council is currently putting the appropriate management structures in place.

Sectors

Growth sectors targeted will include: Financial, Business and Professional Services; Agri-Food; Digital and Creative Technologies; Advance Manufacturing, Materials and Engineering; Life and Health Sciences; Tourism and; Construction and Materials Handling.

Funding

Funding includes £350 million from the UK Government, £100 million from partner councils, £50 million from the two Universities and if re-established, £350 million from the Northern Ireland Executive, totalling £850 million.

Will be enhanced by at least £150 million private sector investment, providing the Belfast Region City Deal with a 10-year £1 billion Programme of Investment.

The 22 proposed projects, which have been agreed in an investment plan are focused on four main Investment Pillars: Infrastructure, Tourism and Regeneration (totaling £450 million), Innovation and Digital (£350 million) and Employability and Skills (£30 million investment in an employability and skills package, including a City Deal Apprenticeship Programme).

Next steps?

Partners will work with the UK Government and NI Civil Service to develop a final City Deal Document; a financial plan; detailed implementation plan, incorporating monitoring and evaluation frameworks; and business cases for all projects.

Work to develop a communication strategy and operating protocol.

Our Lives with Dementia

Last week a new short film about dementia in Northern Ireland was shown for the first time. Supported by The Social Change Initiative and produced by Erica Starling Productions, ‘Our Lives with Dementia’ looks at the lived experiences of four people and families in Northern Ireland who are living with dementia.

The powerful film looks at diagnosis experiences, the impact that dementia has on families and the different service provision that exists across Northern Ireland for people with dementia.

Over 19,000 people in Northern Ireland are living with dementia. By 2050, it is predicted that the illness will affect up to 60,000 people. It is also estimated that by 2040, dementia will claim more lives than cancer.

With an ageing population and increasing numbers of people living alone, dementia is one of society’s greatest challenges. With access to the right support across Northern Ireland, people can live well with dementia. A new Dementia Care Pathway has been developed but has not yet been implemented.

The film shows a stark contrast between the services that are available for people who are diagnosed with dementia and living in different parts of Northern Ireland.

Compared to the services that some of the families in the film are able to access, Stephen, who was diagnosed with dementia two years ago when he was 57, lives in rural Fermanagh and shares in the film how difficult accessing support can be. “We have no awareness courses, very little help at all…Once you’re actually in the system, you hear nothing. Dementia NI is my whole release valve.”

This was a feeling and view that was reflected and discussed during the Q&A session which followed the special screening at Queen’s Film Theatre.

Chaired by Tara Mills, the panel consisted of Emily Wilson, who is in the film with her husband Jim who has dementia, Bernadine McCrory who is the Director of the Alzheimer’s Society in Northern Ireland and Seamus McErlean from the Health and Social Care Board who is the Social Care Commissioning Lead (Older People and Adults) and Co-chair of the Dementia Strategy Implementation Group.

Bernandine McCrory, Seamus McErlean, Emily Wilson and Tara Mills

The audience, which consisted of healthcare professionals, politicians, people living with dementia and organisations who provide support to people and families affected by dementia, joined in on the challenging conversation which focused on the varied service provision, diagnosis stories, and improvements that are needed to help people and families who have been impacted by dementia lead full lives.

While progress has been made, there is still a way to go. Our Lives with Dementia is a touching tribute to those who are living with their diagnosis and it is the hope of the families who are involved that sharing their stories will go some way in helping the wider public understand what it is like to live with a dementia diagnosis.

A full downloadable version of the film can be found here.

Chamber Chief Presses Government Minister Over North West City Deal Progress

The President of the Londonderry Chamber of Commerce, Brian McGrath, today met with the Minister of State for Northern Ireland, John Penrose MP, regarding the City Deal for the North West region.

Along with a delegation from the Londonderry Chamber of Commerce, Brian McGrath emphasised the importance of a City Deal for the North West Region to Minister Penrose and the invaluable opportunities that it could bring and unlock across the region.

The Chancellor of the Exchequer, Philip Hammond MP, and the Secretary of State for Northern Ireland, Karen Bradley MP, have both recently stated that the negotiations on the deal are progressing.

A City Deal in the North West would help to fuel the regional economy, update infrastructure and transform opportunities to enable the North West to compete on a global stage.

During the meeting, the President of the Londonderry Chamber of Commerce made representations of behalf of the business community across the North West, stating that it must be deal that works for everyone and emphasised that the North West Region has a lot to offer in terms of talent and ability to help make the City Deal a success.

Following the meeting, the President of the Londonderry Chamber of Commerce, Brian McGrath:

“Today we held a positive meeting with Minister Penrose regarding progress on the City Deal for the North West Region.

“There is now a clear need to create more certainty on a city deal, particularly with the continued paralysis around Brexit.

“The City Deal would unlock opportunities right across the region, providing support and finance for key and innovative projects, much needed infrastructure updates and could transform businesses and the economy as a whole.

“The Chamber will continue to work with Derry City and Strabane District Council and other partners to make the City Deal a reality for the North West Region. I am looking forward to seeing the negotiations around the City Deal conclude positively and quickly.”