PwC in Northern Ireland

Record air fares push May inflation to 2.7%

PwC — Tue, 18 Jun 2013 12:28:56 +0100

UK consumer price index (CPI) inflation jumped to 2.7% in May, as compared to April’s seven month low of 2.4%, the Office for National Statistics (ONS) said today.

The ONS said higher fuel prices, a record 22% increase in air fares – the biggest since records began in 2001 – plus increases in clothing and footwear, all contributed to the May increase.

However, the cost of food and drink declined in May with the price of meat, vegetables and fruit all easing below the April level.

Commenting on today’s figures, Dr Esmond Birnie, PwC’s chief economist in Northern Ireland said:

“The May increase is higher than anticipated although most economists expected some upward movement as there had been a sharp fall in inflation a year ago in May 2012.

“In addition, the Bank of England said last month that it expected inflation to peak at just over 3% in 2013, before falling back towards the Bank’s 2% target in 2015.

“Nevertheless, in the 35 months since June 2010, there have only been 2 months where the rate of inflation did not outpace the growth in wages, indicating just how UK household budgets are being squeezed.

“There is some evidence that the UK is moving slowly into recovery, but much of that is being driven from London and the South East and we are still expecting marginal growth in Northern Ireland and some other regions in 2013.

“That means those regions where growth and recovery is lagging will continue to see real household incomes shrinking for the foreseeable future.

“However, it might not feel like it, but today’s inflation report should be seen in the context of a move towards gradual recovery.

“Maintaining and accelerating that recovery in the face of external challenges will be a delicate balancing act for business and politicians alike.”

Contact details
Email: Esmond Birnie
Tel: +44 (0)28 9041 5808

Consultation launched on new Business Improvement Districts (BIDs)

PwC — Tue, 18 Jun 2013 11:06:56 +0100

The Department of Social Development has launched a 12 week consultation which would see the creation of new Business Improvement Districts (BID) across Northern Ireland.

If adopted, the Business Improvement Districts (NI) Act 2013 would empower traders and business owners in towns, cities and rural areas across Northern Ireland to work with their local council to identify any improvements that would directly benefit their area.

If a fully costed improvement plan was developed, a levy could be set on the businesses involved in the BID to fund the implementation of the plan over a 5 year period.

The consultation will run from Monday 17 June until Friday 6 September 2013.

Announcing the consultation DSD Minister, Nelson McCausland said that Business Improvement Districts (BIDs) will provide a valuable economic boost to retailers in provincial towns, many of whom are struggling to keep afloat in these tough times.

He said the new BIDs would allow businesses to help themselves and create local trading solutions to reflect local issues in their areas.

Copies of the draft Regulations and the consultation questionnaire are available from: http://www.dsdni.gov.uk/index/consultations.htm.

Responses to consultation should be submitted in writing to: Business Improvement Districts Unit, Department for Social Development, Level 3, Lighthouse Building,1 Cromac Place, Gasworks Business Park, Ormeau Road, Belfast, BT7 2JB or by email to: social.policy@dsdni.gov.uk

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DSD publishes report into Housing Executive maintenance contracts

PwC — Tue, 18 Jun 2013 10:28:00 +0100

The Department for Social Development has published a report into Northern Ireland Housing Executive maintenance contracts.

The report was commissioned by the Housing Minister Nelson McCausland in October 2011 following his concerns with the Housing Executive’s management of response maintenance.

He received the report on 29 June 2012 and, following due process, the report was issued to the Housing Executive for comment. The Housing Executive approved the report on 17 April 2013.

In his statement to the Assembly earlier this week, the Minister said that he will provide updates on the issues referred to in the report.

The report is now available and can be downloaded at www.dsdni.gov.uk/index/hsdiv-housing/hsdiv-publications.htm.

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Assembly considers cafe culture

PwC — Tue, 18 Jun 2013 09:13:06 +0100

Northern Ireland’s Department of Social Development has introduced a Pavement Cafe Bill into the Assembly.

The proposed statutory licensing scheme will let cafe, restaurant and bar owners seek permission from their local council to place tables and chairs in public places for use by their customers.

The Bill would give councils powers to impose conditions on applicants and enforce the new regulations, as well as charging a licensing fee. Councils could also vary, suspend or revoke a licence and even remove outdoor facilities in certain circumstances.

The licensing scheme will bring Northern Ireland into line with the rest of the UK and enable a controlled expansion of pavement cafes.

It is expected that the draft legislation will complete its Assembly passage by the end of the year, although councils will need further time to prepare for the licensing scheme before receiving applications.

The decision to introduce the Pavement Cafe Bill follows earlier consultation on the proposals and the relevant background material is available on the DSD website http://www.dsdni.gov.uk/responses-to-licensing-of-pavement-cafes-consultation.pdf

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663

PwC helps put World Police & Fire Games on ice

PwC — Mon, 10 Jun 2013 21:37:43 +0100

PwC Northern Ireland will be the major sponsor of the Northern Ireland Tridents Ice Hockey Club at this year’s World Police and Fire Games (WPFG).

Northern Ireland will host the WPFG from 25^th July -10^th August 2013 and organisers are confident of attracting 10,000 competitors from around 70 countries.

A large number of ice hockey teams from as far afield as Russia, Sweden and Canada are expected to travel to Northern Ireland, making ice hockey one of the most popular team events in the 2013 Games.

The NI Tridents Ice Hockey Club was formed in 2010 and originally comprised members of Northern Ireland’s three main emergency services; the Police Service of Northern Ireland (PSNI), Northern Ireland Fire and Rescue Service(NIFRS) and the Northern Ireland Prison Service.

The team now includes members of An Garda Siochana, giving the Tridents a unique first as the only all-Ireland joint emergency services sporting team on the Island.

Paul Terrington, PwC regional chair and First MinisterPeter Robinson (pictured right), ventured onto the ice at the Dundonald Ice Bowl to announce PwC's support for the Tridents and the WPFG.

Paul Terrington said the Games were another example of how Northern Ireland was playing to a strong global audience:

“As developed nations face difficult economic conditions, tourism remains a potential growth sector and Northern Ireland has enjoyed a remarkable year of events and landmark activities.

“The World Police and Fire games are one of the world’s biggest multi-sport events and PwC is delighted to support the event and local tourism through our sponsorship of the NI Tridents Ice Hockey Club.

“Since its formation in 2010 the team has worked closely with clubs and schools, encouraging participation in sport, a love for ice hockey and an understanding of the work of the emergency services and we’re pleased to help further those aims.”

The WPFG will feature around 56 sports at 42 venues across Northern Ireland and, due to its popularity; the ice hockey tournament will start even before the official opening of the 2013 Games.

The ice hockey tournament will run from 25th July - 9th August at the Dundonald Ice Bowl and Belfast’s Odyssey stadium.

Welcoming the support for the Tridents, Club Chairman and Team Captain Kyle Gordon from PSNI said:

“The fact that Northern Ireland has attracted a sporting competition of the scale and calibre of the World Police and Fire Games speaks volumes for the positive way in which our country has moved forwards in recent years, and the NI Tridents are immensely proud to be involved in promoting this image of Northern Ireland to the international community through the Games.

“It is a real privilege and honour for us to have been offered support from an international giant such as PwC. I think it speaks volumes for the company’s dedication to supporting and promoting sport at all levels in Northern Ireland.

“We are looking forward to working with PwC in raising the profile of Northern Ireland and the work of the emergency services in the run up to the Games.”

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663

UK entertainment & media market will hit £65bn a year by 2017

PwC — Wed, 05 Jun 2013 00:10:00 +0100

Smartphones, tablet devices and high-speed Internet access is transforming the world of entertainment and media, according to PwC’s annual Global Entertainment and Media Outlook 2013-2017 (Outlook), published today [Wednesday 5 June 2013].

The Outlook says that the next five years will see an explosion in household and mobile broadband across the UK, accelerating growth in digital entertainment, mobile gaming and the emergence of ‘connected consumers’, who will be targets for a new wave of advertising.

The latest Outlook forecasts that while the UK’s entertainment and media market will grow by around 21% from £54bn to £65.5bn by 2017, the structure and characteristics of the market will undergo substantial change.

Empowering both advertising and market growth is spending on Internet access, which will grow over the period to £15 billion, driven by access on mobile devices more than doubling to £9bn by 2017.

The fastest growing areas will be internet advertising, internet access, out of home advertising, video games and TV advertising.

Commenting on the latest Global Entertainment and Media Outlook, Phil Stokes, head of UK entertainment & media at PwC, said:

“Across the world, consumers’ access to entertainment and media content and experiences is being driven to new heights by our ever increasing access to the internet and the explosive growth in ownership of smart devices.

“Entertainment and media businesses have raised their game in agility and customer understanding and we see that a constant digital innovation has become the new licence to operate.

“Digital technologies are pervasive and, as a consequence, we believe it’s wrong to say that companies need ‘a digital strategy’: companies need a business strategy that’s fit for the digital age.”

At the end of 2012, five out of ten people were not mobile Internet users and about two out of five households were not subscribed to pay-TV services. Bundling these services with fixed-broadband offers varying opportunities to the UK’s operators to grow revenues, increase ARPU and reduce churn, depending on their market position.

There is a small amount of growth left in the country’s fixed-broadband market. The number of subscriptions stood at 21.6mn at the end of 2012, equal to 77% of households, and will increase at a CAGR of 2.5% to reach 24.5mn by 2017. The UK’s mobile Internet and pay-TV markets, in contrast, are relatively underpenetrated.

PwC says that the period to 2017 will be characterised by a steady decline in purchasing of physical entertainment media like boxed video games, DVDs and music CDs. These were traditionally the market leaders accounting for around 88% of consumer entertainment spending in 2008, but have fallen to 73% today and, by 2017; physical purchases will represent just 53% of spending as consumers become more accustomed to purchasing and downloading digital media.

But as consumers become more mobile, the Outlook forecasts that advertisers will do likewise, increasing their investment in so-called out of home advertising (OOH). [Note: OOH is any type of advertising that reaches the consumer while he or she is outside the home, in contrast with broadcast, print and Internet advertising. OOH advertising is focused on marketing to consumers when they are in public places, in public (and private) transport, waiting areas and/or in specific commercial locations like retail and food outlets]

Currently the UK is the world’s fifth largest OOH market and the second largest in Europe after France, with 2012 revenues of £930m. The UK market is forecast to grow at around 6% annually and overtake France, reaching £1.24bn annually by 2017, becoming Europe’s largest single OOH market.

The UK video games market is also forecast to reflect the growth in mobile devices and broadband; the sector was worth £3bn in 2012 and the Outlook says this will continue to grow by 5.4% annually, to be worth £3.9bn annually by 2017.

TV advertising is also forecast to enjoy continued growth in the UK. The market was worth £3.7bn in 2012, with annual revenues forecast to grow by just under 5% to reach £4.7bn in 2017, with the UK set to be a global leader in online TV advertising behind the USA.

However, while the TV advertising market can expect steady growth, TV won’t be without its challenges as consumers begin to exploit broadband and new online offerings, shifting from ‘mass media’ to ‘my media’.

As media consumption becomes fragmented across multiple devices, from traditional television to smartphones and tablets, consumers will seek personalised experiences: their content on their chosen devices when they want it.

The Outlook says consumers are already beginning to abandon pay TV subscriptions, opting for the content they want via cheaper, Internet-based content services. A further manifestation of ‘my media’ is consumers’ growing use of the ‘second screen’, via smartphones and tablets; to comment on and share the experience of TV and other companion content with friends, often via social media.

The Outlook forecasts that big loser of the next five years will be print. Newspapers, business-to-business publishing and consumer magazines will show a net decline in revenues over the period and, by 2017, the annual value of subscription television revenues will have overtaken that of the newspaper industry.

Find out more at http://www.pwc.com/outlook

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663

Seminar will challenge low numbers of female STEM graduates.

PwC — Tue, 04 Jun 2013 12:27:38 +0100

Less than 30% of Northern Ireland graduates in so-called STEM subjects (as Science, Technology, Engineering and Maths) are female, according to Employment and Learning Minister Dr Stephen Farry.

In a statement to the Assembly on gender issues in employment, learning and skills, the Minister said that on leaving school, females tend to be better qualified than males and that around 60% of university enrolments are now female.

Despite this, females account for less than 30% of those graduating in STEM subjects (excluding medicine and health); while over 70% of ICT students and more than 75% of Engineering and Technology students are male.

In addition, he revealed that fewer than 9% of participants in an apprenticeship in science technology, engineering and mathematics or STEM-related areas are female.

To challenge female under participation in STEM subjects, the STEM Business sub-group is running a seminar entitled ‘Are you getting the balance right?’ in association with the Equality Commission.

The seminar will engage with STEM businesses to investigate the issues of gender bias in STEM and assist in identifying additional steps businesses can take to make careers in STEM attractive to women.

The event takes place on 26 June 2013 12 noon-2pm in Malone House, Barnett Demesne, Shaw's Bridge, Belfast.

Further details on how to register for the seminar are at: http://www.nibusinessinfo.co.uk//content/success-through-stem-seminars

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UK retailers hit by 65% tax increases in past 8 years - PwC

PwC — Tue, 04 Jun 2013 07:00:00 +0100

The amount of tax paid by UK’s leading retailers has increased by 65% since 2005, according to a new report from advisors, PwC.

The growth of online retailing, a fall in real disposable incomes and a shift in business taxation towards indirect taxes and business rates, have increased the financial pressures on High Street retails chains, the report says.

The report, The Contribution of Retailers to the UK Public Finances, says the effective total tax rate – the total tax borne as a percentage of total pre-tax profits - for leading UK retailers in the Hundred Group[1] is now 59%, as compared to an average of 39% across all other industries.

Despite a steady decline in corporation tax rate, payment s of corporation tax by these retailers have increased 11% since 2005, while other business taxes including business rates and employers national insurance contributions have increased by almost 80% since 2005.

UK business rates alone, increased by an average of over 30% between 2008 and 2010.

Commenting on the report, Janette Jones, PwC tax partner in Belfast, said:

“Successive UK governments looking for stable tax revenues have rebalanced business taxes so there is less reliance on corporation tax, which is inevitably volatile as it is dependent on profits.

“For every £1 of corporation tax, the UK’s largest retailers now pay almost £2.40 in other taxes out of their profits.

“The rise in business rates in particular is felt by retailers given their large property portfolios.”

The increasing tax burden has come in tandem with challenging conditions for retailers, with the volume of retail sales in March 2013 only 2.0% higher than in March 2008 while business rates rose more than 30% between 2008-2010.

Other key findings include:

The retailers in the Hundred Group bore £3.99bn tax in 2012 (£3.86bn in 2011).
Adding the taxes these companies collect such as PAYE, net VAT and employees’ NIC, the full tax contribution totals £8.28bn (£8.17bn in 2011).
For every £1 of corporation tax, the UK’s largest retailers now bear almost £2.40 in other taxes of which £1.44 relates to business rates and £0.64 relates to employers national insurance contributions

Christine Cross, chief retail adviser to PwC, added:

“Retail in the UK not only gives domestic employment, but also stimulates consumer confidence and makes a significant contribution to the public purse.

“However, high business rates represent a significant burden for those still trying to balance physical stores with online retail.”

According to PwC’s study, the total value added to the economy by the largest UK retailers was £22.4bn, with profits made by the retail companies accounting for 20% of this.

These profits were either distributed to shareholders, including institutional investors such as pension funds, or retained by the companies for reinvestment. The larger proportion of the value distributed went to employees in wages (40%) and to government in taxes borne and collected (37%).

Download ContributionofRetail - total_tax_contributrion_030613

[1] The Hundred Group represents the UK’s largest companies, with membership drawn mainly from the FTSE100

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663

Northern Ireland contractors winning £9m a year from London office builds.

PwC — Mon, 03 Jun 2013 07:53:57 +0100

London’s booming office developments are delivering a £9m annual dividend and sustaining 230 jobs a year in Northern Ireland, according to a new report from advisors, PwC.

Between 2008 and 2016, 38 central London office developments will have delivered £1.7bn of Gross Value Added (GVA) a year to the UK economy and sustained a total of 34,600 construction and support jobs, PwC says.

Much of this goes to the UK regions, ranging from around £9m of GVA a year and 230 jobs annually in Northern Ireland to 6,600 jobs a year and £280m of annual GVA in the South East of England.

The report, prepared for the business group London First, says that for every £100m spent in the UK on the capital’s office development programme, £54m goes to regions outside London, buying construction supplies, specialist engineering and skilled labour.

Commenting on the report, Kevin MacAllister, PC Northern Ireland partner and private sector leader said:

“There has been anecdotal evidence of Northern Ireland construction companies working first on the Olympics and subsequently on London’s office development programme.

“This report now places a value on the work in terms of cash and jobs and underlines the sheer scale of London’s development and construction market.

“There are clearly real opportunities for local firms – particularly in some of the specialist trades like cladding and specialist mechanical supplies where over three-quarters of that spend still goes outside the UK.

“Overall, this serves to show how UK regions like Northern Ireland can share in the prosperity of the buoyant London office market.”

PwC also found that construction work in central London supports almost twice as many jobs outside London as it does in the capital, with the 12,200 jobs supported in the capital annually, dwarfed by 22,400 supported elsewhere in the UK.

A key factor in this “multiplier effect” is that some 84% of all the direct spending in central London office development stays in the UK.

London First asked PwC to analyse the direct and indirect impact of a sample of developments in central London that have been completed since 2008 and are expected to be completed by 2016.

Nine leading developers agreed to allow access to confidential data to let the authors develop a full understanding of their construction expenditure, supply chain impacts and even employee spending.

The aim was to assess the gross contribution of a small part of London’s construction activity to the UK economy, which will have generated a total of around £9.7bn of GVA and 201,700 jobs in regions outside London between 2008-16.

Key findings of the report include:

Central London office developments annually contribute £1.7bn of GVA to the UK economy and sustain 34,600 jobs.
More than half of this annual output is outside London – £1.1bn of GVA and 22,400 jobs per year.
Around 84% of direct expenditure on central London office development remains in the UK economy.
There is potential for development to generate further economic benefits for the UK, by increasing capability in goods and services that the UK currently lacks, such as cladding, lifts and machinery.

Welcoming the report, Baroness Jo Valentine, Chief Executive of London First said:

“The value of investment in London is huge in terms of generating jobs and economic benefits in London itself, but the knock-on contribution to regional economies is more impressive and shows the boost that London businesses provide to the rest of the UK.

“The fact that it can attract this private sector investment, against competition from other international hubs such as New York or Dubai, is a sign of continuing global confidence in London and its future growth.

“But it’s vital that the government makes a similar commitment to public sector investment in the city’s infrastructure – particularly its transport system.”

The 38 central London office developments covered by the study total 6.7m square feet and are equivalent to less than 10% of total London development.

The annual GVA and employment supported across the UK and including Northern Ireland, by central London office development is shown in Figure 3 in the report, page 7.

All regions benefit but the research identified regional variations in the products or services being sourced.

Download LondonFirst-BuildingBritain_030613

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663

Today is Tax Freedom Day – now I work for me!

PwC — Thu, 30 May 2013 07:53:30 +0100

As the sun rises today [Thursday 30 May 2013], Northern Ireland taxpayers can celebrate Tax Freedom Day; the day the average UK citizen has finally earned enough to pay their taxes and begin working for themselves.

For 150 days since 1 January 2013, every penny earned by the average UK taxpayer has helped pay for roads, hospitals, schools and a plethora of government spending.

This year’s Tax Freedom Day comes 24 hours later than in 2012 (allowing for a Leap Year) the same day as in 2011, when the adjusted Treasury figures say that tax freedom was declared on 29 May.

PwC Northern Ireland tax partner, Janette Jones says that Tax Freedom Day is getting later. It’s now six days later than in 2009, a week later than in 2002 and nearly five weeks later than in 1963 when Tax Freedom Day fell on 24 April:

“The average UK taxpayer now spends around a week longer just working for the Chancellor, than he or she did a decade ago.

“However, Tax Freedom Day is only based on tax receipts; it doesn’t take account of the government’s budget deficit.

“According to the Adam Smith Institute, factoring that into the equation puts the real Cost of Government day – when we have worked long enough to pay for both the government's taxes and its borrowing – out to 13 July.”

To arrive at Tax Freedom day Add the Adam Smith Institute adds up all the taxes paid by all UK taxpayers – income tax, national insurance, VAT, fuel duty, excise duty on alcohol and tobacco and everything else – then calculates how long it takes us to earn enough to pay for all these taxes.

That calculation shows that, in 2013, the Government spends the combined earnings of average UK citizens between New Year's Day and 30th May.

According to the Adam Smith Institute, where they have been calculating Tax Freedom Day since 1991, the more tax the government takes, the longer it takes for UK taxpayers to make their contribution.

However, PwC Northern Ireland chief economist, Dr Esmond Birnie, says that, our American cousins seem to be enjoying a somewhat better fiscal weather:

“According to the US Tax Foundation, the average American taxpayers celebrated 2013 Tax Freedom Day on April 18, five day later than in 2012.

“That means average Americans worked around 42 fewer days for Uncle Sam than UK taxpayers did for George Osborne.

“However, in addition to Federal taxes, local US taxation varies from state to state, so residents in Mississippi and Louisiana celebrated local Tax Freedom Day on March 29, with their less fortunate cousins in Connecticut waiting a further 45 days to become the last state last state to experience tax freedom on May 13. "

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Contact details
Email: John Compton
Tel: +44 (0)28 9041 5663