Memorandum submitted by The Survey Association

 

1. Introduction

 

1.1 This submission on behalf of The Survey Association (TSA) is further to your

Committee's call for evidence on financial support for small and medium-sized enterprises.

 

1.2 TSA is the trade association for commercial surveying companies in the UK and currently has over 120 members from around the country. Our members are experts in surveying, geomatics and underground mapping, and play a critical role in providing the spatial data needed for planning, housing and infrastructure. Our full and associate member companies together employ over 2,500 people and had a turnover in 2007 of almost 250 million.

 

2. The impact of the current economic climate on TSA members

 

2.1 TSA welcomes this opportunity to provide evidence to the committee: we are aware that any member companies are currently experiencing financial difficulties given the

challenging economic climate. We are well-placed to offer our perspective on financial

support for small and medium sized enterprises (SMEs) as the vast majority of our members fall into this category. About 90% of our members employ less than 50 people.

 

2.2 The current economic downturn is having a significant, and concerning, impact on our

members. We are aware that a number of member businesses are making staff redundant, and we anticipate that up to approximately 50% of people working in the survey industry will lose their jobs over the next six months. This is challenging for individual employees and survey businesses not only in the short term, but also threatens the long-term development of the industry at a time there is already a shortage of skilled surveyors in the UK.

 

2.3 We are expecting around 20 member companies to go into administration as a result of the downturn. This will also therefore have an impact on the number of TSA members. We believe that the survey industry has not faced such tough economic conditions, and the ensuing negative impacts, for over 15 years. At present we do not anticipate that the

demand for services provided by our members will improve for at least 12 months.

 

3. Impact of Government measures on TSA members

 

3.1 Given these challenging economic circumstances, TSA welcomes the Government's

commitment in the Pre-Budget Report to provide support for small businesses. We shall be monitoring closely the impact of these measures on our members.

 

3.2 In particular, we welcome the deferral of the increase in the small companies' rate of

corporate tax and call for this to be held at 21% beyond the 2009-2010 financial year. While we see the establishment of the Small Business Finance Scheme as a positive step, we are keen for clarification on how the scheme will work in practice as we believe this could deliver significant benefits to our members in access to affordable credit. However, we shall be scrutinising this closely as our members' experience of the existing Small Firms Loan Guarantee Scheme has been that this has not greatly increased access to funding because of bureaucracy.

 

 

 

 

3.3 As our members carry out a significant amount of work for public sector bodies, to the

value of approximately 80 million per year, we welcome the Government's announcement of the establishment of a new online portal for all public sector contracts over 20,000. It will be important that this tool is easily accessible so that it delivers benefits to our members; we welcome this step to help reduce bureaucracy and maximise business opportunities for surveying companies.

 

3.4 In addition, we look forward to central Government and Regional Development Agencies delivering on their recent commitment to speed up payment to suppliers, as this will improve payment conditions for a number of our members. TSA looks forward to this commitment also being met by local authorities, following the recent letter from the Secretary of State for Communities and Local Government to the Local Government Association, as these bodies are also significant clients of about 50% of our members.

 

3.5 TSA shall be scrutinising closely the impact of the expected changes in lending criteria by banks to SMEs. We welcome that a number of banks have announced fixed interest rates on overdraft loans to small businesses, but given the volatility of current economic conditions, it will be important for the Government to monitor the impact of these measures on small businesses and keep the situation under review.

 

4. Long-term solutions for TSA members

 

4.1 While we expect that the Government's package of support will have benefits for our

members in the short to medium term, in these difficult economic circumstances a

commitment from the Government to increasing investment in infrastructure, such as roads and railways, will provide much needed long-term support for the survey industry.

 

4.2 Confidence in the housing market is key to supporting the survey industry, and it is

critical for the future of our members' companies that this recovers as soon as possible. In addition, it is disappointing that the Government is now scaling back its commitment to build 3 million new homes by 2020 by making this an "aspiration" rather than a target. This creates long-term instability for all of our members as this sector forms a significant part of their business.

 

11 December 2008