Cider. Cheese. Farming. Basket weaving. The popular view of Somerset easily succumbs to lazy clichés, despite the fact that agriculture and food and drink production make up less than one tenth of its total economic output.
Sectors including environmental technologies and creative industries have been growing steadily over the past few years, diversifying its economic mix. “Somerset is sometimes seen as a rather one-dimensional place,” admits Rupert Cox, chief executive of Somerset Chamber of Commerce. “We need to change people’s perceptions.”
Somerset has had a long history of engineering, particularly in the defence sector: a quarter of the county’s businesses focus on engineering or aerospace work, according to statistics.
Vacuum-cleaner maker Numatic International, for example, employs more than 700 people at its manufacturing base in Chard. And despite exporting more than 40 per cent of its products, the company has no plans to forsake its Somerset roots. “At our base in Somerset we can make more than 5,000 products and get them to people within three weeks. You can’t do that from the other side of the world,” says Andrew Smith, a senior manager at Numatic.
In addition, 24 per cent of companies in the county specialise in business services, such as accountancy, law, training and logistics. Yet Somerset’s lack of a main urban centre, its rural location, poor broadband speeds and limited road network can place additional burdens on businesses at a time when trading conditions are already tough.
Family run Cheddar-maker Wyke Farms is the kind of business you might traditionally expect to find in the county. It has been making Cheddar to the same family recipe since 1861, and employs 300 people in Bruton and Wincanton. But running a £60m turnover business from a rural location can be difficult. “We’re not on the doorstep of any major population centres so our transport and energy costs are higher,” says managing director Richard Clothier. “All our products are heavy and bulky and have to be brought to the market, which is an extra cost.”
Clothier also complains about a lack of workers with the type of skills the company requires. “There are no manual unskilled jobs anymore. All the jobs at Wyke Farm require people with a degree of technical know-how,” he says. “We often have to bring people in from further afield.”
Numatic has similar problems. “We struggle to hire people for certain positions,” Smith says. “IT specialists, for example, are often younger people who prefer the big city.”
Somerset’s drawbacks are not news to local leaders, and various initiatives are under way to improve business conditions in the county. Into Somerset was established in November 2008 to challenge perceptions and encourage business relocation. It is funded by Somerset County Council and attracted 14 companies, in a variety of sectors, to relocate last year. “The business case for relocating to Somerset is strong,” says Cox, who leads Into Somerset and the Chamber of Commerce. “The cost of commercial property is a third cheaper than London and the South East.”
The organisation has identified five sectors – food and drink, advanced engineering and aerospace, creative industries, business services and environmental technologies – that will provide the backbone of the county’s economy in years to come.
“The rustic image of Somerset is one of our advantages and disadvantages,” says David Hall, cabinet member of strategic planning and economic development at the county council. “Into Somerset’s job is to play on the opportunities of being in Somerset but also to advertise and promote its pleasant rural lifestyle.”
Transport connectivity in and out remains an obstacle to business growth. The 34-vehicle pile-up on the M5 in November 2011 brought home how reliant the county is on the South West peninsula’s only motorway. “I don’t want to belittle the loss of life, but it was very bad for business,” says Hall. “The South West was closed for the weekend.”
Somerset relies on the M5 and A303 in and out of the county and both can be prone to heavy delays. “We import a lot of materials from Europe, which arrive at the docks in Southampton and take an age to reach Somerset,” says Numatic’s Smith. “The A303 is a nightmare. It’s a mystery to me why the carriageways haven’t been expanded.”
Somerset Council has joined forces with neighbouring authorities – Wiltshire, Dorset, projects. “The issues relating to the A303 are much bigger than Somerset,” says Hall. “We’ve got to get another main transport corridor into the South West.”
In April 2011, the Heart of the South West local enterprise partnership (LEP) – covering Devon, Plymouth, Exeter, Torbay and Somerset – received the green light from the coalition government. Somerset could use an effective LEP to create more private sector jobs. Taunton has the largest public sector workforce in the West Country: almost two fifths of the town's working population are on the government payroll. “It’s a very imbalanced situation that needs to be addressed,” admits Hall.
But, as yet, the parties involved have struggled to agree a business plan, let alone start addressing the region’s problems. Somerset missed out on an enterprise zone last year and the weakness of its LEP did not help its cause. “The LEP is a disaster,” says Alan Stone, an associate director at accountancy firm Old Mill. “It’s taken ages to set up an advisory committee when business should be at its heart. It’s not engaging with the business community.”
Some business leaders have expressed concerns that Devon and Somerset make uneasy bedfellows. Plymouth is the only city in the LEP and there are concerns that the partnership will be too Devon-centric. But Cox argues that Somerset and Devon have a lot in common: the challenges of rurality and the same road and rail routes.
“The LEP has some hard work to do in the first quarter of this year finalising its business plan,” Cox admits. “I’m disappointed it’s taken this long. But once that’s sorted out then business leaders can decide whether they buy into it. I’m not convinced it’s going to work but frankly it’s the only game in town for government funding.”
The LEP’s draft business plan should be available by March and formalised by May. “We need to demonstrate progress,” says Hall. “It’s important the LEP doesn’t get bogged down in process.”
Smith adds: “The LEP initiative was such an unguided missile from the start. It’s still a work in progress. It’s one hell of a challenge to try and get something up and running out of the blue with no specification on what it’s supposed to be.”
However, the sluggish start has not stopped Somerset from securing superfast broadband. In May 2011 it was announced that Devon and Somerset will share £30m government funding for the roll-out over the next two years. The government wants the whole country to have superfast broadband by 2015 and has made £530m of capital funding available to support rural deployments.
The Devon and Somerset bid, with support from Plymouth, North Somerset and Torbay Councils, was one of only three approved by the government’s Broadband Delivery Unit. Devon and Somerset county councils have pledged £22m towards the project. The first fibre-optic cables will be laid in Taunton this autumn.
The average broadband speed in Somerset is 3 megabytes per second, but in some rural areas it’s much slower. “In some areas the speed is laughable,” says Smith. Superfast broadband will enable broadband speeds that are at least ten times faster.
“It’s desperately needed,” adds Clothier of Wyke Farm. “The online management systems at a company like ours don’t work properly unless the broadband speed is fast.”
The hope is that the roll-out will also encourage more businesses from outside the county to relocate. “It makes it even more viable for smaller hi-tech businesses to relocate into areas of Somerset that just wouldn’t be possible before,” Hall says.
The shining light on the horizon is the proposed £12bn nuclear power station at Hinkley Point near Bridgewater, which is expected to receive planning permission in early 2013. EDF Energy, which submitted its application in November 2011, has promised to invest heavily in Somerset as part of the project. A third of its investment is planned for the nuclear reactor island, the rest is for associated construction and civil engineering works as well as aligned business activity.
EDF has formed a joint initiative with the Somerset Chamber of Commerce to help local businesses become part of its supply chain. A website has been set up, where companies can register to find out about opportunities related to the project. “We can help them understand the scale of the project,” says Cox. “We have to manage the expectations, because it’s still a year away and confidence in the economy is low.”
During the ten-year construction period, the site will employ 23,000 workers who could have a significant economic and social impact on the area. Once operational, the council estimates Hinkley C could generate £100m of additional income each year.
“It’s a real opportunity to provide sustainable growth to Somerset beyond the time when the power station is operational and bring real jobs into the area,” says Hall.
But, in light of all these changes, local leaders would be wise to keep in mind what has given many businesses their selling point. “One of the benefits of being based in Somerset is that the county is a fantastic brand,” says Wyke Farm’s Clothier. “For many consumers, Somerset-made has honesty about it. It’s unhurried, natural and is seen as organic, sustainable and not overly industrial. We don’t want to lose sight of that.”
Also in: February 2012
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Bright young things
By the time this magazine reaches you, the fifth National Apprenticeship Week will be just around the corner. We haven’t put apprenticeships on this month’s cover just because we enjoy chortling at Lord Sugar being cartoonishly cantankerous with gel-topped young thrusters on the BBC (although who doesn’t enjoy that?), but because this is something that can make a genuine difference in the South West.
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Ready, steady, gro
Question for readers with young children: do you still have an airing cupboard full of blankets, or do you have sleeping bags for your kids?