Few UK businesses well informed about consequences of a Brexit

21 June 2016 Consultancy.uk

The question to stay or leave the UK will be brought before voters this Thursday. Proponents and opponents of the UK’s continued presence within the EU have been lining up their arguments, some good and some downright fraudulent. A new study finds that few businesses in the UK are well informed about the potential consequences of the referendum, while 39% state that they are uninformed. Key questions surround access to the EU market, international markets and legislative changes.

The potential consequences of leaving the EU, in the case voters would steer the country in that direction, are not well understood by UK businesses according to a new study from Grant Thornton. The firm's International Business Report (IBR) finds that only 15% of UK businesses are ‘well informed’ about the consequence of the referendum on their business, 39% felt uninformed, with the remainder (46%) stating that they were 'somewhat' informed. Businesses, the report finds, are in need of information about the potential short-term impact resulting from a leave vote, at 46% of respondents, the consequences of a vote to leave on exports of goods and services, at 36% of respondents, and the impact on tax, at 35% of respondents.

Businesses were also asked about the priorities for a potential post-referendum government, in the event of a leave vote. To them, the top priority is a negotiation of trade deals within the EU single market (68%) in order to support business growth, while international trade deals are also found to be important moves for the government, although less important than with EU states, at 58%. Reviewing UK employment legislation comes in third, cited by 51% of respondents, while making agreements on rules for governing competition, state-aid and anti-trust regulation was also identified as a priority for the government (50%).

Few UK business prepared for the potential fallout from the UK's EU referendum

Businesses also considered the situation in which the vote would go to the status quo, and the UK remains in the EU, in which case they find that government effort should be directed to boosting productivity (at 70% of respondents), followed by pressing for additional reforms within the EU that support growth (cited by 63%). Few businesses (24%), believes that the government should sit on its hands in a bid to promote stability.

The consultancy firm also polled its own people regarding whether they believe it is in the interest of Grant Thornton’s UK stated purpose, of creating a more vibrant UK economy, to stay in the EU – seventy percent of respondents say that staying in the EU provides the firm with a better opportunity to support the development of a more vibrant economy in the UK.

“With the outcome remaining highly unpredictable, we hope that whichever way the vote goes, the government will prioritise the concerns of business and focus on areas which enable a more dynamic, vibrant UK economy to emerge over the coming years," comments Robert Hannah, Chief Operating Officer at Grant Thornton UK. "Whilst the debate so far has been highly emotive and passionate on both sides of the fence, the research suggests there's been a dearth of qualified information on what the impact of a decision to leave would have on UK businesses. This then raises an interesting question around preparedness and planning, which we know from earlier research that very few businesses had done. It also suggests that the voting public may be led more by their hearts when entering the polling booths on the 23rd.”

According to a recent study by Roland Berger, a Brexit would economically harm UK's science and engineering industries.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”