Relocation UK 2009: Introduction

With fewer companies in the market, this could be an ideal time to seek out a new business location.

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Last Updated: 09 Oct 2013

Is now really the moment to be scouting around for a new business location? Andrzej Narkiewicz, a senior consultant at Mercer responsible for advising companies on business relocations, thinks so. 'This is a good time to move to a new location - especially as fewer companies are doing so than usual, so there is less competition. Relocating businesses can take advantage of rising unemployment, reduced demand and competition for qualified labour, and less employee pressure on salary increases. At the same time, they can count on more political and financial support from local regions.'

Research by commercial property firm Jones Lang LaSalle (JLL) confirms that certain regions of the UK have responded to the recession by providing office occupiers with increasingly competitive rental costs, plus some of the juiciest incentives seen for a decade or more. With many employers making headcount reductions and looking for big cost-savings on accommodation, it's a buyer's market as landlords fight for tenants. In more than half of the markets JLL checked, rent-free periods are now as much as two years or longer.

The next 12 months will be critical for your business. So, too, for the development agencies around the UK whose job it is to attract you to their particular neck of the woods. With the Tories threatening to abolish unelected quangos, the English regional development agencies (RDAs) are busy proving their worth, assembling packages of assistance for firms and sectors hit hard by the recession. Some of them have been under fire for attracting fickle inward investors, which shut up shop and axed workers at the first whiff of a downturn.

Says Richard Ellis, chair of the East of England Development Agency (EEDA) and spokesman for all nine English RDAs: 'For many years to come, there will be significantly less public funding to go round. The challenge will be to do even more with each pound spent. RDAs have already made significant progress and exceeded their target of £144m of savings and are on track to deliver further savings between now and 2011.'

He and the RDAs contend that an incoming government would be foolish to tinker with the existing network of business support services. 'There is consensus among leading academics that some key drivers of economic growth and business support are best delivered at regional level, ' argues Ellis, 'as a tier bridging central government and local authorities. RDAs have good links and good relationships with the business community, and to tear all that up only to have the same services delivered by a very similar replacement organisation would be extremely costly at a time when the taxpayer can ill afford it.'

He points to an independent report into the impact of RDAs, which shows that that for every £1 invested by them, £4.50 of economic return is generated for regional economies. 'It's imperative that we maintain our focus on the priorities of the business community - helping firms to access finance and investing strategically to support the Googles of tomorrow.'

But it's also imperative that development agencies learn to be more responsive when you pose detailed questions or have specific needs to be met. Mailing out a standard bundle of documents to relocating businesses is not good enough. Says Narkiewicz. 'Typical relocation decisions are preceded by a complex process of criteria selection and multi-factor comparative analyses.' This guide is not an exhaustive analysis of the UK's different regions, but we believe it will provide a helpful first step as you begin scouting for your next location.

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