The Green Deal Has Started – Did you Notice?

The Green Deal started on 1^st October. Did anyone notice? … No? …Me neither.

The government keep referring to the Green Deal as their ‘flagship’ carbon reduction policy. Is that ‘flagship’ as in Mary Rose – about to sink? Or as in Ark Royal – being decommissioned?

There is certainly a lack of enthusiasm at the Department of Energy and Climate Change (DECC) to make the Green Deal happen. Although officially launched this month they are not expecting, or even actively encouraging, uptake until well into next year.

In the mean time there are a number of businesses out there that are offering Green Deal style funding with their own take on the self financing “Golden Rule”. One such I met at a recent exhibition charge clients a proportion of their energy bill for a fixed period, typically 3 to 5 years, whilst they implement energy saving technology (improved insulation, new boilers and such like) at no additional cost to the client. Clearly energy saving can also be money saving – if only more businesses realised this.

Sadly the ones absenting themselves from savings, from my own experience and backed up by a recent survey, are SMEs. 37% are doing nothing to reduce energy wastage.

We’ll soon be changing the clocks. Harnessing the sun to offset our energy will no longer be uppermost in our minds. The use of Photovoltaic (PV) Panels to generate electricity or Solar Thermal and heat pumps to capture heat may not be the most urgent projects in our minds. These attract good subsidies in the form of FiT (Feed-In Tariff) for PV and RHI (Renewable Heat Incentive) to accelerate uptake and thus stimulate development of the technologies. PV in particular has the potential to see the sort of cost reductions seen in computers and microchips. Who, 30 years ago, would have predicted that most of us could afford pocket size devices with the capability, and lots more, of a main frame computer? PV technology will see similar astronomic improvements.

The FiT has become fairly well understood but its sister scheme, RHI, may be new to some. Unlike electricity, the surplus of which from one’s PV can be fed back into the grid and hence ‘purchased’ by other users; there is no way to sell one’s surplus heat. (Until, that is, District Heating schemes become more prevalent but I’ll ignore that for now). The RHI hence is solely an incentive payment based on offsetting fossil fuel consumption. Fossil fuel you didn’t have to consume because you created the heat yourself from renewable sources – the sun or the heat in the ground (the latter incidentally also came from the sun and to paraphrase Professor Brian Cox: there is more than enough energy from the sun in its various forms of direct radiation, tides, wind, and biofuels to amply meet all of humanity’s energy needs).

To claim FiT or RHI your premises must be of a minimum standard of efficiency, ie an EPC (Energy Performance Certificate) D rating or better. This is to deter payment for captured energy that is then wasted. Now whilst you may not be rushing out to buy your PVs or renewable heat systems right now I would expect that once we get past February and people become conscious again of the sun’s existence there will be an upturn in demand. You may find it better to spend the winter doing some preparation. For example, get your EPC done now. It will give you the peace of mind that you meet the standard. Or at least it will give you time to make the improvements. And, don’t forget supply and demand; when the spring rush starts prices will increase.

Power Cuts by 2015

Yet again Supply-Side energy dominates the news. It has (at last) dawned on the authorities that we are within a few years of using more electrical energy in the UK than we are generating.

Massive investment in nuclear power stations makes much more exciting news copy than switching off unneeded lights and keeping the heat where it is needed by improved insulation. The major energy generating companies love it to be this way, maintaining their power and influence over the government and public.

The fact is supply only needs to meet demand. Demand is higher than it ought to be due to waste and missed opportunities. If our businesses and our homes ceased wasting energy and took up the opportunities presented by more efficient buildings, services and equipment demand across the country would shrink and avoid the need for additional generation capacity.

Ofgem’s spokesman speaking on the BBC made a telling remark. When asked about the possibility of power cuts he said that major industrial consumers would be switched off first. It seems business activity is in the firing line to protect domestic and social consumption.

Businesses can usually make 10% savings with little or no capital cost by applying energy management techniques. Whilst reducing the bills may be one incentive it is becoming possible that reducing the risk of power outages will become even more compelling.

Energy Tax – A Level Playing Field?

The Green Deal, the government’s flagship programme for encouraging energy improvements in existing buildings, may become dead in the water subject to a European Court ruling. Currently many energy saving products and installations are VAT rated at the lower 5% rate. However the EU are challenging the legality of applying this lower than full rate and it goes to court next spring. If the UK is forced to apply the full rate on these services the VAT rate on typical Green Deal improvements such as insulation and heating controls will be put up to 20%.

Projects that are already on the cusp of being financially viable (the Green Deal golden rule requires that the loan can only be made if the energy bill reduction is greater than the loan repayments) are likely to be shelved.

As an Energy Consultant to industrial and commercial clients I am already fully aware that energy costs, although moaned about, are not seen as a significant enough pain to warrant attempts to improve efficiency or reduce waste. It seems that pursuing aggressive purchasing contracts is as far as many Financial Directors are satisfied to go.

Here’s a radical thought – Energy is too cheap.

It must be – no self respecting company would allow the same degree of waste in any other area. Perhaps it is because energy is invisible. The waste cannot be seen. Material or product waste is self evident by the overflowing bins outside the back door. Labour waste is self evident by staff standing around with nothing to do. Energy waste on the other hand just percolates through the walls as heat or as unneeded light when there is nobody in the room or when the daylight is sufficient.

Why is energy too cheap? It shouldn’t be; the main source, fossil fuel, is not limitless. The amount in the ground isn’t limitless and the atmosphere’s ability to take the carbon dioxide isn’t limitless.

Coming back to the VAT theme maybe it’s too cheap because it’s omly rated at 5%. At the moment we can spend money on energy reducing ideas taxed at 5% to save energy also taxed at 5%. At least the playing field is level. It won’t be if the former is increased to 20%. Perhaps the opposite is the right answer: Leave energy saving measures at 5% and increase energy itself to a 20% tax rate.

CSR – Make a BIG difference in a small business

CSR – Corporate Social Responsibility

This phrase usually makes you think of the ‘corporate businesses’ with BIG budgets and people assume it doesn’t apply to them!

It applies to all businesses, whatever size – we are all socially responsible for the well being of our community, staff, customers and environment.  This doens’t have to mean big money but what it can do is help you:

• Retain & win customers
• Have a happy / motivated team
• Keep your head in front of your competition
• Have something to talk about to PR, press, newsletters, blogs, twitter, facebook, smoke signals and pigeon!
• Save money
• Provide access to funding and investors

This is to mention just a few of the positive, proactive benefits.

So what’s involved? Your time initially, but not as much as you may think – Like any good planning you do need to invest some time in building your CSR policies, but it doesn’t take too long.

Here are some tips on what you can easily think about:

• Open up your business to work experience pupils.
• Volunteer time for causes for you or your staff – It doesn’t need to be a lot. An hour a week to help a local school with reading?
• Skills training – ie CV writing / mock interviews training to unemployed / students.
• SKYPE – Have a Skype account and advertise it on your email – It could help save travel time and petrol costs.
• Look at your utility usage – Get a monitor and see if you can save power by switching off computers and equipment at the plug. Use energy efficient light bulbs. Turn the thermostat down. Set hot water at 60 degrees. Turn off radiators. Turn off lights – It all mounts up!  – you will be amazed at the savings you could make. Up to 20% in some cases.
• Set up Pay Roll giving – it’s easy.
• Speak to a financial advisor about charitable trusts – It could save a fortune on inheritance tax etc – Martin Capel Smith can help you.
• Flexible working hours as an option to staff.
• If you have space – Offer a free meeting room facility to local community groups.
• A staff benefit programme to help them save money.
• Look into bike and transport schemes ie car sharing
• Recycle – It’s easy – but do you do it? Paper? Ink Cartridges? Packaging?
• Support local suppliers
• Pay on time – It’s important to you, so it is to others.
• Purchase sustainable / Recycled products
• If you are getting  a new car – get the most eco friendly one you can afford.

Other things to consider:

• Best practice in employment matters and total compliance with employment legislation;
• Effective Diversity policies covering employment, supply chain management and customer relations;
• Preparation of anti-bribery policy including external verification of effectiveness;
• Waste and Packaging regulatory compliance and company recycling policy effectiveness;
• Health & Safety compliance.

How do I do it?

ACTION is what is required!

A – Assess – Asses the needs of your business, your personal motivations and local requirement

C – Commit – To a statement of what being a responsible business means to you. Make it achievable and have short medium and long term goals.

T – Tell – Don’t be shy, tell your staff, customers, potential customers, friends, family and stake holders.

I – Integrate – Across your business, identify the issues that effect your bottom line.

O – Organise – Like any good plan organisation is the key for maximum benefit. If you have staff that are involved make time to recognise and Thank!

N – Nurture – Involved your clients, supply chain, staff etc. People are always keen to get involved with positive activities, nurture them along with your plan and you will be rewarded.  Measure and report back – feedback for us all is always great especially when it is positive.

TELL PEOPLE!

Website, newsletters, on the bottom of your emails, PR, press – what ever you can think of… Don’t be shy of your CSR policy – It will help you in the long run.

I hope this helps you. If you would like further information you are welcome to contact me Sharon Cook – Sharon@mymatesrates.co.uk 07738 736 987

Refer-On.com and the EU Cookie Directive

In May 2011, the EU issued the Cookie Directive, which states that all websites must gain the explicit permission of visitors to place cookies on their machines. The UK was given 12 months to comply with this directive and that 12 months runs out on 26th May 2012, at which point the EU Cookie Directive becomes enforceable in law.

The Cookie Directive is intended to protect the privacy of web site visitors, giving them the option of refusing cookies should they wish, if those cookies might collect or distribute personal information to other sites or services.

What is a Cookie?

A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is a piece of data stored as a text file on a computer or other device when you visit a website. See this Wikipedia Article for more detail.

Whilst many sites do not use cookies at all, anything with a login, or sharing add-ons (like some Facebook Like and Tweet this buttons), or a shopping basket, or that uses tracking software like Google Analytics, does. Cookies are also used to track user preferences, and in some cases to serve up context specific advertising.

What about Refer-On.com

Refer-On.com only uses two types of cookies, those that are ‘strictly necessary’ for the functioning of the site and some ‘performance cookies’ used to monitor web site traffic and usage (Google Analytics) and to provide user specific content once registered and logged into the site (WordPress).

In order to comply with the EU Cookie Directive, Refer-On Ltd has updated it’s privacy policy to include more details about cookies and which ones are used on this site, and provided information on how to ‘opt-out’ if so desired.

We have also added some additional text to our registration page to ensure that site visitors are aware that addition ‘performance cookies’ will be used when they register and/or log onto the site, these additional cookies are only used if a  user registers on Refer-On.com, not before.

All information stored in cookies by Refer-On Ltd is anonymous, does not identify the user and is not shared with third party sites unless otherwise stated (Google Analytics).

For more information please view our updated Privacy Policy or get in touch.

Keith Wootton
keith@kennetiq.com
Refer-On

Boring Pensions – No! They can be Great…….. and Give you What you Want

Pensions are Great !  Mmmmm, well they can be, but many find them confusing, boring, dangerous, tied up, expensive and so on. But pensions are money remember and they are not boring to those who are getting what they want out of them.

The big bonus is tax relief as most of this audience will be aware, but everyone is in a different situation, so to try and excite those people in some of those different situations, I have summarised a list of Top Pension Tips.  Whether you need some basic guidance with your pension or whether you are wondering if you can get what you want out of your pension, you will hopefully find something in here to excite you about what at this moment, could be a boring pension dilemma.

If by chance you find anything exciting and wish to continue to get excited and happy about what you can do with your pension funds, then do please say hello.

 

Glyn Williams, Build Your Wealth

Tel: 07976 684123

Is your building sufficiently energy efficient for 2050?

Climate change and reduction of greenhouse gas emissions is driving policies in a number of areas, one such being our buildings. The Energy Performance of Buildings Directive (EPBD) has shaped Building Regulations and property marketing for a few years now. The current Building Regulations introduced in 2010 require minimum thermal performance of new buildings. Specific guidelines are given for the thermal resistance of the envelopes (insulations of walls, floors ceilings etc), minimal air leakage and efficiency of heating, ventilation and cooling systems. The next upgrade of the Building Regs, probably due within the next couple of years, is likely to go even further and require that new buildings produce almost zero carbon dioxide.

Just a word about the definition of carbon dioxide emissions attributable to buildings. It obviously includes the CO₂ from any on-site fuel burning activity such as gas or oil fired boilers but is also includes the CO₂ emitted at the power stations when producing the electricity consumed at the building. Mains electricity produces over twice as much CO₂ per unit of energy as natural gas. Electricity is also much more expensive per unit of energy than natural gas so it’s not usually a good idea to switch off your boiler and plug in lots of electric heaters.

The national target for 2050 is that carbon dioxide emissions should be reduced by 80% (from 2008 figures). That would be a credible target if all new buildings were shortly to achieve almost zero emissions. But herein lies the problem. The entire stock of UK buildings in 2050 is unlikely to have been built since the next release of the Building Regs. Buildings are incredibly durable. Many of those already built, probably 60% by some estimates, will still be around in 2050. And those will have been built to minimal or no thermal standards.

The climate change challenge is less about regulations for new buildings and more about what we do to improve the existing stock. This is where you will start to see the government concentrating their effort.

Their flagship initiative here is the ‘Green Deal’. This is a scheme that assists home owners (this year) and commercial building owners and users (this year or next) to improve the energy efficiency of their buildings by loans for improvement work paid back through the electricity bill. The scheme is based on a ‘Golden Rule’. This requires that the improvement will reduce energy costs sufficiently such that repayments do not increase the energy bill from the pre improvement figure. In other words: get your building improved at no extra running cost.

How the ‘Golden Rule’ is applied in practice will require a close technical assessment of the building in its current state and after the improvement. This test will be performed by an upgraded form of the Energy Performance Certificate (EPC); a document until now most of us only come across (and largely ignore) when buying or selling a house. There is currently much debate on how this EPC assessment is to be done and by whom. Matters such as independence, integrity and who pays are receiving much attention. I’ll let you know more when the dust settles.

Question: How, exactly, do I create my company’s strategy?

Answer: This is a question that drives right to the heart of a successful business or an unsuccessful business.

In my experience very few executives or business owners can honestly answer the question, “Can you summarise your company’s strategy in 45 words or less?” Those of my clients that can answer honestly are usually highly successful. To be effective the strategy has to be clear, simple and easily communicated.

A strategy statement has three basic elements – the objective, the scope and the advantage. It is vital to recognize the true essence of these three components. For example a strategic objective is NOT ‘To maximize shareholder wealth by exceeding customer expectations…’  This is no more than a platitude. It must be the single precise and specific objective that will drive the business over the next 5 years or so. A strategic objective is, for example, ‘To generate at least 15% growth per year in the value of the company for the next 3 years’ – specific, measurable and time-framed.

The second element – the scope – should not only describe exactly what should be done within defined boundaries, it should also specify where the firm or business should not go. For example it is clear that The Body Shop will never stock and sell cosmetics which have been developed through the laboratory testing of products on animals. Ryanair is another example – basically ‘no frills’ air travel. This approach shows how a self-imposed restriction can be of real strategic and competitive value.

Third – the advantage – is the most critical aspect of the strategy statement. This is expressed by stating the compelling reason why the customer should buy from you – essentially your customer value proposition. It also describes the unique activities that allow your company alone to deliver on that value proposition.

Clarity in all three elements is what most helps your team members understand how they can contribute to successful execution of your strategy. As a discipline you should restrict your strategy statement to 35 words

 To show that I practice what I preach, this is my strategy statement:

To establish ten new mentoring engagements a year by offering trusted advice and guidance to Thames Valley-based business leaders and executives. They wish to realise their own potential, rather than depend on conventional consultants.

You will see that this contains the three key elements: 1) the objective; ‘ten new ….  engagements a year…’, 2) the scope; ‘…Thames Valley-based business leaders …’  and 3) the advantage; ‘… They wish to realise their own potential, rather than…’

I have had many questions on the topic of company identity and strategy, and I will be dealing with them in the coming months.

Peter Robinson

Business Mentor

01491 641103

Our Video & Derwent Ready!

Hello All

At last I have got around to starting this blog.  I would invite you to take a look at this video which explains what we do in very basic terms. Equally important is that Derwent of the Reading Hub put this together. So if it works in terms of getting a basic message across and you want one for your business, then do make contact with Derwent at www.drentsoft.com.

More blogs will follow. In the meantime if you have a more specific interest or know anyone who needs help with Pensions, Investment Management, Tax and insurance, do start at our website ; www.buildyourwealth.co.uk

Thank you for your interest.

Glyn Williams, Build Your Wealth

Tel: 07976 684123

ISA Financial Advice – Timeless and Simple

Well, some of it is! You can invest and have a guarantee that the worst that can happen is your original amount of cash will be returned to you.

That acronym ISA is everywhere again. This blog is to remind you of the basics (not the detail) and to give pointers to 3 categories of investor:

•    those who think ISA’s are “safe”.

•    those who wish to save safely but are not happy with the current rates of cash deposit returns.

•    those who know ISA’s might not be “safe”, who want to invest anyway but are wondering what to do.

Scarily, I have come across many people who have assumed that all ISA’s have some form of government protection, leading to them investing in more risky areas than they thought, such as equities. For all those first timers you need to know there are two types of ISA’s.

1. Cash or deposit ISA’s – having some protection from the Government Deposit Protection Scheme
2. Market linked or equity ISA’s which are risky and may result in you losing a little or a lot of your capital.

They may also give you a good profit but make sure you are clear about which type of ISA you are investing in

Very briefly, the maximum cash ISA allowance this year is £5,340 and £10,680 for an “investment” ISA – in other words in to the stock market.

There is plenty of information on the internet to help you find a cash ISA account but remember the basics and keep an eye on your investment. Many banks have a history of quietly reducing your “best rate” over time. Check also what ordinary non-ISA accounts will give you, especially if you are a zero rate tax payer, as non-ISA rates can sometimes be better for you.

If you are happy to tie your savings up for five years, have a think about the following concept.

Readers might be aware that under the Deposit Protection Scheme the first £85,000 you have invested with any one bank is protected by the government. The problem with cash ISA’s is the low return. So how about considering an “investment” with a bank, that is similarly protected by the Deposit Protection Scheme?

What’s the catch? The invested amount is tied up for 5 years and you may only receive back 100% of the cash you invested.

Why would you do this? Because, through the Deposit Protection Scheme, you are guaranteed the return of your monies and you might get a better return over the next five years.

Obviously no one knows what the future holds but examples of different investment managements past performance have looked like this

So the proposal from just one of the UK banks is either: we will give you your money back in five years OR you might benefit from these types of returns if the investment managers keep performing

By talking to your IFA (or perhaps give us a call) you should find alternative products to either cash or shares/equities (this is just one concept) that might take your interest. Just talk to your adviser.

The above sample investment concept is a lower risk investment to saving your funds directly into equities. Food for thought. If you wish to invest into equities and go for growth and immediate access of funds, unless you are your own researcher, I suggest you take independent financial advice from an IFA, such as us. You can find us at www.buildyourwealth.co.uk. From the free guides page you can sign up for our latest guide to investing with guarantees. Though published in June 2011 the principles still apply.

As ever, I remind you that these comments are designed to spark discussion – a bit like the daily papers – and do not constitute advice in any form. Please seek advice from an IFA and benefit from their experience, licensing and indemnity insurance protection, alongside those protection benefits of the Financial Services Compensation Scheme (FSCS).

For more information contact Glyn Williams at Build Your Wealth on 02380 457889

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