By: Steve Crouch, co-owner/ FD at Crunch Accounting (www.crunch.co.uk)
As a collective, the freelance community is one that can often find itself misunderstood. They’re a subsection of the UK workforce that is often prone to stereotyping by those in more routine employment.
In Finance – as with any industry – freelancers can often prove a valuable asset, bringing in outside opinion and expertise, providing a helping hand with burgeoning or expanding projects, and at a lower cost than traditional employees. Speak to directors and managers and you’ll likely find that freelancers are viewed as an integral part of their workforce.
That said, in many circles misconceptions about their productivity and reliability remains; misconstrued ideas of weekday lie-ins and leisurely timetables perpetuating the idea of an overpaid and underworked lifestyle.
Last month marked the fourth annual National Freelancers Day. Amongst the day’s aims was to challenge and shift perceptions of the freelance community. The popularity of the freelancing cause is gaining momentum, and myriad events now take place across the UK, with National Freelancers Day receiving more and more media coverage each year.
Progress has been made in altering perceptions of the freelance community but some still remain. However a recent study released by freelancing body The PCG reflects the true nature of the UK’s freelancers.
Casting an eye over the statistics, you’ll find this is a community that’s hard at work and contributing significantly to the economy.
According to the PCG’s research, freelancers currently make up 12.4% of the UK’s overall workforce, contributing around £202 billion to Britain’s tumultuous economy. To put this figure into perspective, the sum of all freelancing activity equates roughly to the values of the UK construction (£64bn) and manufacturing industries (£140bn) combined.
They are staggering figures which, when you consider successive Governments’ shoddy treatment of the freelance community, makes their legislative ineptitude even more remarkable.
The Government aren’t the only ones giving freelancers short shrift either – the financial sector needs to reassess its treatment of freelancers too.
Although different, freelancers are usually bundled up alongside small businesses for the purposes of statistical reporting, and according to those figures 2012 has been a tough year.
According to Ernst & Young’s ITEM Club, the total amount of money lent by banks to small businesses in 2012 will be at the lowest level since 2006.
The basis for this grim assertion is derived from a collection of surveys by the Office for National Statistics, Warwick Business School and the Federation of Small Businesses. These suggested that loan rejection rates averaged around 11% between 2005 and 2008, whereas the rejection rate in mid-2012 averaged around 38%.
Extrapolating these stats, they suggest that the current lending figure will shrink by 4.6%, dropping to £429bn by the end of the year. They’re impressive figures, for all the wrong reasons.
The coalition hasn’t covered itself in glory where small business is concerned either, instead dishing up plenty of political posturing and little in the way of concrete action.
Cameron’s ‘Small Business Bank’ is yet to be fleshed out, and even this may not have any tangible impact. Skepticism abounds regarding its lending capacity and with Osborne and Cable at loggerheads over its creation, it’s appearing more of a case of ‘if’ not ‘when’ it’ll come to fruition.
Ultimately, something clearly has to be done in both financial and Government circles to alleviate the strain on the self-employed.
The failure of 318 of the FTSE 350 companies to sign up to the Prompt Payment Code is a perfect example. The Code aims is to speed up payment from large corporates to their smaller suppliers (i.e. SMEs and freelancers), but has been largely ignored by the nation’s largest businesses.
Freelancers lack the capital and access to credit of larger businesses, and one late payment can very realistically mean curtains for their business. A study by BACS found the average late payment is now around a month overdue, with large corporate and financial institutions the worst culprits.
To their credit, the Coalition appear to be keen on tackling the issue, threatening any business not signed up to the code with a dose of bad PR. Business Minister Michael Fallon threatened to ‘name and shame’ those big businesses unwilling to the embrace the code.
It’s a step in the right direction but ultimately what’s needed is greater cooperation between both the financial sector and Government about how best to address some of the woes facing the self-employed, especially given their obvious importance to the UK economy.
Speaking on the eve of last year’s National Freelancers Day, David Cameron praised freelancers’ ‘valuable contribution to the economy’ promising that the coalition would offer ‘all their support’. A year on, we’re yet to see that promise fulfilled.
Speak to freelancers and they’ll say that complex legislation remains a burden (despite promises to cut red tape) and consistently lament difficulties both raising and accessing capital. Clearly, both financiers and government need to do more.
This growing army of workers can play a significant part in restarting the UK’s economic engine. Their skills and knowledge can prove a valuable asset in an economy yearning, but struggling, to retain growth.
Hopefully, initiatives like last month’s National Freelancers Day will help highlight a sector that has grown considerably over recent years, both in number and economic importance.
A change in the perception of freelancers will be of benefit to the Government and UK businesses alike, whatever their size.
Robinhood plans confidential IPO filing as soon as March – Bloomberg News
(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources.
The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said.
Robinhood did not immediately respond to a request for comment.
Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.
Robinhood was at the heart of a mania that gripped retail investors in late January following calls on Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.
The online brokerage tapped around $3.4 billion in funding after its finances were strained due to the massive trading in shares of companies such as GameStop Corp.
(Reporting by Ann Maria Shibu in Bengaluru; editing by Richard Pullin)
Analysis: How idled car factories super-charged a push for U.S. chip subsidies
By Stephen Nellis
(Reuters) – When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.
For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.
As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.
Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.
“It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted,” said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.
Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.
Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.
Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.
“Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, ‘Sorry, can’t help,'” Lewis said. “It was one of those moments where everything aligned.”
The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.
The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world’s two largest chip manufacturers.
In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.
Intel Corp, Micron Technology Inc and GlobalFoundries – which already have U.S. factory networks – will also likely benefit.
Smaller, specialty chip factories also could benefit.
“The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.,” said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. “We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer.”
Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.
Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers’ needs as best it can.
“We are expecting this level of demand to continue at least for the next 12 months, maybe even longer,” he said.
(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)
(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)
Atlantia disappointed with CDP bid for unit, continues talks
By Francesca Landini and Stephen Jewkes
MILAN (Reuters) – Italy’s Atlantia said on Friday an offer by a consortium of investors led by state lender CDP for its 88% stake in Autostrade per l’Italia fell short of the mark and asked its top managers to see if the bid could be sweetened.
“The offer falls below expectations,” the Italian infrastructure group said in a statement, adding it had mandated the chief executive and the chairman to assess “the potential for the necessary substantial improvements” to the bid.
Italian state lender CDP, together with co-investors Macquarie and Blackstone, has presented a proposal valuing all of Autostrade per l’Italia at 9.1 billion euros ($11 billion).
The consortium also requested Atlantia guarantee up to 700 million euros in potential damage claims and another roughly 800 million euros for a pending legal case, making the bid less attractive than previously expected.
One source said the consortium estimated overall pending legal claims against Autostrade at 3 billion to 4 billion euros, adding the 700 million euro cap did not mean the amount would be detracted from the offer price from the start.
Earlier on Friday Atlantia’s minority investors TCI and Spinecap had called on Atlantia’s board to reject the offer, saying it undervalued the asset.
“No deal is better than a bad deal, especially a bad deal and a wrong price,” TCI Advisory Services partner Jonathan Amouyal said in a emailed comment to Reuters.
TCI, which holds an indirect stake of around 10% in Atlantia, repeated that the value for 100% of Autostrade should be no less than 12.5 billion euros.
The board will hold a further meeting in order to take a final decision on the offer in due time, Atlantia said.
The negotiations between Atlantia and the CDP-led consortium are part of an effort to end a political dispute over Autostrade’s motorway concession triggered by the collapse of a motorway bridge run by the unit.
(GRAPHIC – Atlantia share performance: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqggjdpx/image-1614331237501.png)
The bid expires on March 16, but the deadline could be extended in case Atlantia calls an extraordinary shareholders meeting (EGM) on the issue, according to one source with knowledge of the matter.
Shares in the group ended down 0,7%, after recovering some losses, as investors waited for the decision of the board.
Atlantia, which is controlled by the Benetton family, owns 88% of Autostrade, with Germany’s Allianz and funds DIF, EDF Invest and China’s Silk Road Fund holding the rest.
The group also kept open an alternative plan to demerge and sell its stake in Autostrade per l’Italia unit and called an EGM on March 29 to extend to end-July a deadline for offers for the demerged stake.
(Additional reporting by Stefano Bernabei, editing by Louise Heavens and Steve Orlofsky)
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