#BDOWestMidlandsReport 2016 WEST REPORT THE MIDLANDS The Midlands Engine GETS INTO GEAR OUR REVIEW OF THE BEST COMPONENTS THE REGION HAS TO OFFER THE MIDLANDS ENGINE GETS INTO GEAR | BDO LLP 2016 WEST THE MIDLANDS REPORT SUBHEADING LEVEL 1 Body text TABLE OF CONTENTS AN HISTORIC OPPORTUNITY Welcome 01 The West Midlands has a lot to shout about. As one of the main economic powerhouses of the UK, it encompasses a wide range of companies that lead not just in this country but What’s happening where 02 internationally, too. And right now the region faces an historic opportunity. Infrastructure 04 With the creation of the West Midlands Combined Authority comes a chance for industry to have a greater say than ever in the allocation of resources to critical pillars of competitiveness Property 06 such as infrastructure, property, skills and welfare. We believe it is a chance that cannot be Skills and education 08 ignored. That’s why we are dedicating this, our second edition of the West Midlands Report, to an Healthcare 10 in-depth review of the Combined Authority and what it could mean for business in the region. International 12 We also, again, highlight the top 200 West Midlands businesses by turnover. The West Midlands Top 200 14 We hope you enjoy it. Top 200 Profile 16 WEST MIDLANDS TOP 200 OVERVIEW BDO West Midlands contacts 18 2015 2014 CHANGE Turnover £130.49BN £124.11BN 5% Operating profit £10.43BN £10.28BN 1% Profit before tax £8.58BN £9.48BN -9% Profit after tax £6.67BN £7.64BN -13% Dividend £1.97BN £2.58BN -24% No. of employees 648,680 629,524 3% Total remuneration £17.09BN £16.46BN 4% Total directors remuneration £298.76M £264.26M 13% Productivity (per employee) £52K £51K 2% Join the conversation online with @BDOaccountant IIand THE#BDOWestMidlandsReport WEST MIDLANDS REPORT 2016 | BDO LLP OUR REVIEW OF THE BEST COMPONENTS THE REGION HAS TO OFFER | BDO LLP welcome How will we remember this time Within the West Midlands, business is While it is clearly the job of politicians when we look back in the future? booming, with the automotive sector to tackle these issues, business leaders alone due to create 20,000 new jobs in cannot stand by idly waiting to be asked for It’s an important question. Our 4 current transition to a Combined the next two years, according to reports . input. With the Combined Authority and In Birmingham, the private sector created the “Midlands Engine” we are seeing the Authority, confirmed last 5 21,000 jobs last year, with the highest creation of important roadmaps that will November in an ‘historic’ £1bn employment rate of any of the eight largest dictate our ability to compete in years to 1 devolution deal , is much more city economies outside London. come. than political window dressing. Birmingham is also now the UK’s fastest If those roadmaps are going to succeed for By uniting seven Greater Birmingham local growing regional tourist destination, with business then business leaders must step authorities and three LEPs into a single the visitor economy growing by half a billion forward and point out the direction of travel. entity, the Combined Authority will give the in just one year, to £5.98bn6. With growth In future it will not be enough to grumble West Midlands a focal point to potentially like this it would be easy to assume business that we were not properly consulted. We rival London or, indeed, any other global leaders could afford to sit back and welcome need to demand a place at the table. city. And this transition comes at a success with open arms. propitious time for us. RICHARD ROSE Nothing could be further from the truth. Lead Partner, 2 Initiatives such as the £34bn “Midlands As this edition of The West Midlands BDO West Midlands Engine for Growth” aim to build on the Report shows, taking full advantage of success of a region that has an economy the Combined Authority opportunity will of £222bn and where private sector depend on joined-up thinking spanning employment over the last year grew more areas as diverse as infrastructure and inward than three times faster than London and the investment or skills and healthcare. South East3. THE WEST MIDLANDS REPORT 2016 | BDO LLP 1 THE MIDLANDS ENGINE GETS INTO GEAR | BDO LLP what’s happening where A WEST MIDLANDS REGIONAL OVERVIEW Who is leading in the West Midlands business world? To find out, we have compiled a list of the region’s top 200 companies by turnover (see p14). Here, along with other highlights, is how they are split across the region…and how the balance has changed compared to last year. What emerges overall is a picture of a bustling regional business ecosystem that is well placed to take advantage of the opportunities presented by devolution. What is the challenge now? To make sure those opportunities are not missed, so the region can continue to build on its current upward trend. BIRMINGHAM TOP 200 STATS NEWS FROM THE REGION: • Birmingham has delivered the biggest growth in start-ups of all UK core cities, attracting a 95% increase in new companies during the last financial year. The city is also still home to 7 £41K more new companies than any other regional destination . • Private sector jobs growth in Greater Birmingham at 6% was PRODUCTIVITY PER EMPLOYEE higher than in any other core city LEP area apart from the 2014 2015 West of England and well above the national growth rate of 59/200 48/200 2.3BN 2015 4.3% and London’s growth rate of 4.0%8. COMPANIES COMPANIES • Birmingham’s New Street Station is the eighth busiest in the 2.2BN 2014 country with more than 35 million passengers in a year. New £25.8BN £21.4BN Street is the only station outside London to make the top ten TURNOVER TURNOVER OPERATING PROFIT in the ‘top of the stops’ chart9. THE BLACK COUNTRY TOP 200 STATS NEWS FROM THE REGION: • More Black Country residents are being educated to NVQ L4+ than ever before and there is a marked reduction in the percentage of people with no qualifications. However, there is 10 £37K still some way to go to reach national averages . • The Black Country is committed to expanding the PRODUCTIVITY PER EMPLOYEE availability of employment land, targeting the creation and/ 2014 2015 or transformation of 1,571 ha of high quality employment 34/200 25/200 810M 2015 land to meet the needs of expanding and new companies; COMPANIES COMPANIES currently there are only 696 ha10. 809M 2014 • Investment projects totalling £229m into transport infra- £12.5BN £11.7BN structure to support growth via the Local Growth Fund Round TURNOVER TURNOVER OPERATING PROFIT 1 and Transport Majors is currently underway or planned10. HEREFORDSHIRE TOP 200 STATS NEWS FROM THE REGION: • In 2014/15, around 77% of Herefordshire residents aged between 16 and 64 were employed (70,900 employees and 18,900 self-employed). This was a two percentage point £55K increase in the proportion of the working age population employed from 2013/14.11 PRODUCTIVITY PER EMPLOYEE • 54% of Herefordshire’s population live in rural areas; 42% 2014 2015 in the most rural locations. Providing services to a dispersed 5/200 5/200 75.1M 2015 population across a large geographic area is a challenge.12 COMPANIES COMPANIES • £42m funding is being given to the Marches area (covering 73.5M 2014 Shropshire and Herefordshire) to create much needed homes £976.5M £1.0BN and jobs. This is the second round of funding announced.13 TURNOVER TURNOVER OPERATING PROFIT 2 THE WEST MIDLANDS REPORT 2016 | BDO LLP OUR REVIEW OF THE BEST COMPONENTS THE REGION HAS TO OFFER | BDO LLP SHROPSHIRE TOP 200 STATS NEWS FROM THE REGION: • As part of the Marches area investment Telford will benefit from £17.4m investment to improve the road structure. Small and medium-sized enterprises will be allocated £9.5m to help 14 £48K them be more competitive. • Approximately £12m is currently being invested in the PRODUCTIVITY PER EMPLOYEE University of Wolverhampton’s Telford Innovation Campus, 2014 2015 located next to the main business parks of Telford, which 19/200 13/200 2015 is home to some 300 students studying engineering-based 37M 15 COMPANIES COMPANIES 1.3BN 2014 courses as well as around 50 businesses. £5.8BN £5.0BN TURNOVER TURNOVER OPERATING PROFIT STAFFORDSHIRE TOP 200 STATS NEWS FROM THE REGION: • The Stoke and Staffordshire Growth Deal (2015 – 2021) will see c.£97m of committed government funding resulting in up to 7000 new jobs, 1000 new homes and up to c£70m public 16 £45K and private sector investment. • 25% of working age people in the area hold a degree-level PRODUCTIVITY PER EMPLOYEE qualification, which is 9% below the average for England, 2014 2015 therefore retention of higher level skills is critical to the 23/200 36/200 1.6BN 2015 continued growth of Staffordshire.17 COMPANIES COMPANIES 836M 2014 £10.2BN £16.9BN TURNOVER TURNOVER OPERATING PROFIT WARWICKSHIRE TOP 200 STATS NEWS FROM THE REGION: • An extra £15.3m will be invested in the region between 2016 and 2021. This is in addition to the £74.1m committed by the Government on 7 July 2014. It is hoped that 4000 new jobs £82K could be created, 1400 new homes built and £220m of public and private investment generated from this investment.18 PRODUCTIVITY PER EMPLOYEE • Construction of the inaugural building which is part of the 2014 2015 £100m Friargate Regeneration Scheme will commence early 45/200 52/200 4.9BN 2015 this year.