Agencies and creatives are hoping to see businesses given more confidence to invest when the budget is announced next month.
Chancellor Rachel Reeves is due to deliver the government’s next budget on November 26 and the government has previously ruled out increasing any taxes for “working people”. However, the stance had softened to keeping “taxes, inflation and interest rates as low as possible” when Reeves spoke at the Labour Party Conference in Liverpool.
As such, tax increases are widely expected as economists warn that either rises or spending cuts are needed to meet the chancellor’s self-imposed borrowing rules which involve not borrowing to fund day-to-day public spending and to begin reducing government debt as a share of national income.
Business have already felt the impact of national insurance rises which have increased the cost of employing and for the likes of ad agencies, not only affected expenditure but also the amount of money in clients’ budgets.
In March, analysis from Prolific North showed that while the top 50 digital agencies had enjoyed an impressive 14% collective increase in turnover year-on-year, profitability had dropped by 18% – highlighting ongoing pressures squeezing the sector.
We also found that staffing levels had increased 3% compared to the previous year as part of a trend which has seen headcounts increase by a remarkable 30% over 10 years. In total there are almost 4,000 people working across the top 50 agencies and clear signs that the industry has capacity for further growth.
However, further investment and growth plans can only be implemented with confidence in the trading environment and business leaders are keen to see they will be both certainty and optimism from the government.
Rick Guttridge, managing director at Smoking Gun, is among those hoping to see businesses given a reason to continue investing.
Speaking to Prolific North, he said: “Ahead of the budget we’re looking for rhetoric and messaging to bolster business confidence. The sector at large is at the mercy of the confidence of the client C suites and fiscal governors.
“When they get cold feet it’s agencies that feel the frosty touch. The support for JLR and its supply chain is positive for the region and hopefully more can be done with positive investment news confirmed to spread some warm glow before the cold nights set in.”
READ MORE: 8 things we learned at the Conservatives’ Manchester conference
Rob Shaw, CEO at HUB, is awaiting the announcement for optimism, albeit tinged with a strong sense of caution.
He said: “We are all hotly anticipating the next set of budget announcements but after the major shifts in National Insurance at the beginning of this year I think most business owners have a fair degree of trepidation. For agencies the impact of major budget changes are twofold with our own companies impacted – National Insurance was a clear example – but also our clients are impacted which influences investment decisions and growth ambitions which obviously can have a knock-on effect on marketing budgets.
“My hope, and I’m an optimist by nature, is a sensible approach that recognises that UK industry has already helped the economy significantly after the last budget and now needs to focus on growth – as this government is encouraging us all to deliver. A further period of uncertainty or minimal economic growth helps no one.”
For Denise Harris, chief operating officer at Sum Vivas, there is a desire for the Government to be more progressive in its attitude towards technology, particularly AI. The Liverpool-based company creates AI-powered Digital Employees to improve performance and Harris says the North can be at the forefront of the digital future if it is given the support to do so.
“If the UK wants to lead globally in AI,” she said, “we need the digital roads and railways to run it on — connectivity, infrastructure, and access for all regions, not just London.”
One aspect she believes is critical to the this is access to finance and she argues that stronger SEIS/EIS incentives could be “the difference between an AI company scaling in the UK or relocating overseas”.
Harris added: “The UK has an opportunity to lead not just in technology, but in building technology that works for everyone — accessible, ethical, and inclusive by design. Our fear is that government policy won’t keep pace with innovation. AI moves in weeks; government moves in years and that gap could cost the UK its competitive edge.
“The opportunity, however, is huge. The North has the creativity, the skills, and the entrepreneurial spark with the right support, we won’t just be part of the UK’s digital future, we’ll lead it.”
Alex Roberts, of independent production company The Chase Films, similarly hopes to see the North given more backing to unlock its potential.
He said: “Anything that supports both the north and creative industries is always welcome. Filmmakers need as much support as possible and that investment has consistently been shown to reap rewards but we’re a resilient bunch so as good as this is, we’ll always push ahead anyway and make things happen.
“There is everything already in Manchester, talented crews, producers, facilities, studios, cast and locations. Invest in that and it’ll only grow.”
