Firms urged to reduce risk as Brexit deadline looms
Published: Wednesday 28 Aug 2019
Business leaders across the West Midlands are urging employers to reduce their exposure to risk in the event of a no-deal Brexit.
A report, based on responses to the Business Brexit Health Check, has been designed to produce bespoke information for businesses, highlighting areas of their operations that are exposed to Brexit-related change, tips on preparing and information on support available.
This Saturday (31 August) marks two months until the Brexit deadline of 31 October. Unless an alternative is agreed, such as a further extension to negotiations, a no-deal Brexit is the default outcome.
The Business Brexit Health Check is delivered by the West Midlands Combined Authority (WMCA), Greater Birmingham Chambers of Commerce (GBCC), Black Country Chamber of Commerce (BCCC) and Coventry & Warwickshire Chamber of Commerce (C&WCC).
Analysis of responses to the Health Check between 28 May and 31 July 2019 revealed that businesses selected an average of eight areas where they could be impacted by Brexit. However, only 52 per cent reported discussing the potential implications of Brexit at board and senior management level and only 38 per cent report having undertaken a thorough Brexit risk assessment on their operations.
Key findings include:
- Manufacturers scored higher on the Brexit readiness Index, indicating that they believe they have undertaken slightly more in-depth preparations than services sector firms.
- However, manufacturers scored between a 3.4 and 2.5 out of a possible 5 on the Brexit Readiness Index indicating that they do not feel significantly" prepared for Brexit.
- Manufacturing sector firms were exposed to Brexit-related change in more than twice as many areas as services sector firms.
- Over a quarter of manufacturing sector firms export services to the EU and a quarter of services sector firms buy goods from the EU.
- Over a third of all firms report exporting goods or services to one or more of the c.50 nations that the EU has existing trade agreements with.
- Across each of the most frequently reported areas, manufacturers are significantly more likely to have taken steps to prepare for Brexit than services sector firms.
- Over four fifths of manufacturers report buying goods from EU nations and over three quarters report selling goods to EU nations. While a high proportion of manufacturers say they have undertaken a thorough Brexit risk assessment or reviewed their major suppliers and/or customers, a lower proportion report having adapted import and/or export strategies.
- While almost a third of services and over half of manufacturing sector firms report employing EU nationals, just over one in ten services and over a third of manufacturing firms say they have undertaken proactive communication and engagement with key groups - including employees.
Complete a Business Brexit Health Check here: www.wmca.org.uk/brexithealthcheck
Andy Street, the Mayor of the West Midlands and the former CEO of John Lewis, said The West Midlands is the exporting and advanced manufacturing heartland of the UK and our economy is growing as fast as any other region.
That means we rely heavily on importing materials and exporting products and that makes us more vulnerable to a no deal or disorderly Brexit than other parts of the country.
With that in mind it is vital that, with the clock ticking towards October 31, businesses across the region are prepared in the event of a no deal.
To help with this preparation, I would urge companies to take advantage of the practical help and support offered by the Business Brexit Health Check if they haven't done so already
Paul Faulkner, CEO, Greater Birmingham Chambers of Commerce said: It's clear from these results that there are a lot of firms that could be impacted by a no-deal Brexit who aren't yet taking practical steps to prepare.
While we will continue to lobby against a chaotic Brexit, it makes good business sense for all employers to ‘take a look under the hood' of their business, identify any potential risks arising from a no deal Brexit and take steps to reduce their exposure to those risks.
Many businesses are put off starting to prepare by thinking it's going to be overly time-consuming and complicated. That's why we created the Business Brexit Health Check, to make it as quick and easy as possible for businesses to get the information they need on how they might be affected and what they can do about it