With the UK government setting the net zero target of decarbonisation by 2050 for all sectors, many industries are seeking a replacement for traditional fossil fuels to help meet these requirements. One such option is renewable diesel and Hydrotreated Vegetable Oil (HVO fuel) as alternatives, which seem to be gathering speed in popularity, with Zemo estimating that as many as 4,000 HGVs are now running on renewable diesel. Despite this growing use, many myths circulate about the fuel and how well it can perform compared to other alternative fuels and traditional fossil fuels. Niki Holt, Head of Commercial at Certas Energy , a leading provider of HVO fuel, has offered expert insight into renewable diesel options like HVO and debunks several of the most common myths surrounding it as a fuel. Myth #1 – Electricity is the only choice for net zero Integrating more electrification into vehicles and machinery will be vital to meeting net zero targets, but concerns are holding it back in the commercial space. These key concerns tend to focus on insufficient battery range and a lack of robust and accessible charging infrastructure. Plus, while the vehicles and equipment don’t directly produce emissions while running, there will always be by-products when generating the power, and establishing charging networks can still rely on fossil fuels. This is where alternatives can provide a solution, as HVO offers significantly lower emissions than traditional fossil fuels and can act as an intermediary between traditional fossil fuels and emission-free electric. While it isn’t completely net zero, it’s an important step for businesses to reevaluate their carbon footprint. Myth #2 – HVO and renewable diesel isn’t cost-effective As a premium fuel with benefits over and above standard fossil products, the cost per litre of HVO fuel is currently not the same as standard diesel, although the price gap is expected to reduce as momentum accelerates to achieve GHG emissions reductions and governments consider additional incentives for renewable fuels. It’s also worth noting that there are zero ‘switch’ costs for changing to HVO from standard diesel. Unlike the often-considerable upfront cost of switching to some other alternative energy options, HVO is a straight ‘drop-in’ fuel. Myth #3 – There’s no value in making the transition yet, as it will disrupt my business Despite the government’s plan for a carbon-neutral future, many businesses may not see any reasonable benefit in making the switch before it’s a necessity. But we’ve already seen legislative changes being passed, such as Ultra Low Emission Zones (ULEZ) and clean air zones (CAZ) around the country to encourage the incorporation of alternative fuels and help push towards better air quality. This represents only the beginning, and it’s likely we’ll see more changes and restrictions being introduced that will force a much faster adoption of alternative fuels like HVO. Niki advocates for the importance of proactive integration of alternative fuels: “HVO is an attractive alternative to standard diesel, and it’s expected that as more restrictions come into play to support plugging the gap to net zero, getting ahead of the curve and building relationships with supply partners, will help businesses to mitigate risks." “This is made easier by the fact that modifications to machinery, vehicles, equipment or engines are not required - meaning less disruption or downtime in operations, as well as zero or minimal cost to switch, giving businesses a smooth transition between fuels and enabling productivity.” Myth #4 – It’s not reliable enough Reliability is a factor that many businesses deem crucial to making commitments to a newer technology. This is why many may see fit to stick with traditional fuels like diesel, due to the stability of the offers despite its emissions. However, positive adoption of renewable diesel alternatives is beginning to be seen by an increasing number of businesses across wide range of industries, including haulage and logistics, construction, public sector, utilities and marine to name just a few. This shows that investing in alternatives like HVO can help fuel innovation and push forward as a true renewable option in the future. Plus, Niki outlines the reliability of HVO deliverability within the UK: “At Certas Energy alone, there’s an extensive national network of around 900 tankers, 130 local depots, and a growing network of HVO-stocked high-speed HGV refuelling sites, all supporting a reliable, assured, convenient and competitive supply of HVO to UK businesses." Myth #5 – It’s not suitable for my business due to warranties and OEM approvals While HVO is a suitable fuelling solution for vehicles capable of all terrains, as well as plant and machinery, a common myth is that it’s not compatible with popular original equipment manufacturers (OEMs). This is far from the truth, as most OEMs already have confirmed their approvals of HVO fuel.

As the business landscape continues to evolve at a rapid pace, one of the critical elements for sustained growth and success is the cultivation of future leaders. Transitioning from traditional leadership paradigms to nurturing next-gen leaders is imperative to ensure organisational resilience and competitiveness in the dynamic marketplace. So what are the essential strategies and best practices to foster the development of the leaders of tomorrow. Embracing the Evolution of Leadership Gone are the days where leadership solely relied on hierarchical structures and authoritative directives. Today, leadership is about empowerment, collaboration, and adaptability. Next-generation leaders need to possess a diverse skill set that goes beyond just technical expertise. They must be adept at emotional intelligence, critical thinking, and innovation to navigate the complexities of the modern business environment successfully. Cultivating A Growth Mindset Central to nurturing next-gen leaders is fostering a growth mindset within the organisational culture. Encouraging a culture that values continuous learning, feedback, and resilience is pivotal in developing leaders who are agile and proactive in responding to challenges and opportunities. By promoting a growth mindset, organizations can instil a sense of curiosity and a drive for improvement that are vital qualities for future leadership roles. Mentorship & Coaching Programmes Effective mentorship and coaching programs play a vital role in shaping the leaders of tomorrow. Pairing emerging leaders with experienced mentors not only provides invaluable guidance and knowledge transfer but also creates a supportive environment for growth and development. Through mentorship, future leaders can gain insights, perspectives, and skills that are essential for their professional advancement. Encouraging Diversity And Inclusion Diversity and inclusion are not just buzzwords; they are fundamental pillars of effective leadership development. Embracing diversity in the leadership pipeline brings a variety of perspectives, experiences, and ideas to the table, fostering innovation and creativity. By creating an inclusive environment where all voices are heard and valued, family businesses can cultivate a new generation of leaders who are empathetic, inclusive, and culturally aware. Leveraging Technology For Leadership Development In the digital age, technology has revolutionised the way we work and learn. family firms can harness the power of technology to provide innovative leadership development programmes that are interactive, engaging, and accessible. Platforms offering virtual coaching, online courses, and leadership simulations enable next-gen leaders to develop skills in a dynamic and personalised way, keeping pace with the fast-changing business landscape. Building Resilience And Adaptability In an era marked by uncertainty and volatility, resilience and adaptability are indispensable qualities for future leaders. By exposing emerging leaders to diverse challenges, cross-functional projects, and real-world scenarios, businesses can build their capacity to thrive in complex environments. Encouraging risk-taking, experimentation, and learning from failure instils a mindset of resilience that is crucial for navigating the unpredictable waters of today's business world. Shaping Leaders for the Future Nurturing next-gen leaders is not just about preparing individuals for leadership roles; it is about cultivating a mindset, skill set, and ethos that align with the demands of the future. By embracing new paradigms of leadership, fostering a culture of continuous learning and development, and leveraging the power of mentorship and technology, family businesses can create a pipeline of leaders who are poised to drive innovation, growth, and success in the ever-evolving business landscape. The journey of nurturing next-gen leaders is not only an investment in the future of a family business but a commitment to shaping a generation of leaders who will redefine success in the years to come.

The Santa Clara Valley Transportation Authority (VTA) has selected Bechtel Infrastructure Corporation to provide construction management services for the Bay Area Rapid Transit’s (BART) Silicon Valley Phase II extension, a project which will connect North San Jose and Santa Clara residents with the Bay Area’s iconic transportation system. The new rail line will be the largest single public infrastructure project ever constructed in Santa Clara County, and by 2040, is expected to carry nearly 55,000 passengers each weekday. BART’s Phase II consists of a six-mile extension with four new stations and five-and-a-half miles of tunnel, linking San Jose area riders to the rest of the system. Bechtel Infrastructure Corporation has executed a 10-year contract to manage BART’s Phase II extension and begin overseeing construction later this year. "This latest rail extension will provide a fast and convenient transit alternative for major commute corridors,” said Bechtel Infrastructure Corporation Senior Vice President, Kelvin Sims. “We’re proud to be partnering with VTA again to help deliver this significant project for the area." "We are pleased to have Bechtel, one of the original designers and builders of the first phase of the project, on board to construct the final extension for BART riders visiting, living, or working in San Jose,” said Tom Maguire, Chief Megaprojects Officer, VTA. “One-third of upcoming growth in the San Francisco Bay Area is expected to occur in and around San Jose and this extension further into the Silicon Valley will support that growth and continue to connect the region." This latest contract adds to Bechtel’s 125-year history in California, where the company has had a presence since 1898. Bechtel, as part of a joint venture, led the design and construction of the original BART system, which went on to form the backbone of the Bay Area’s public transport infrastructure. Bechtel also oversaw the engineering and construction of Phase I of the Silicon Valley Line, which first welcomed passengers in 2020. "This is a great opportunity to continue the Bechtel, VTA and BART success story and add to our company’s legacy in California,” said Bechtel’s General Manager of California Infrastructure, Zeyad Hakam. “We look forward to strengthening our relationships in the communities around the state as we begin work on this project."

Three quarters of UK businesses are on the hunt for a new workspace, according to new research from NCG, which raises plenty of questions for family business owners across the UK to consider. Key Findings: 76% are actively considering changing their workspace or expect to do so in the next year. 59% feel that flexible or coworking spaces are the best fit for their business’ needs. 45% of businesses currently using flexible workspaces are unlikely to ever rent their own private office again. The digital infrastructure specialist commissioned an independent survey of 1,002 senior decision-makers within UK businesses. It found that 70% of businesses currently use an office or workspace on a hybrid (46%) or full-time (24%) basis. Serviced offices (37%) are the most common type of space businesses use. This is followed by office and meeting space hired by the hour or day (36%), private offices (35%) and flexible or coworking space (32%), with many businesses using more than one type of space to meet their needs. Of all the businesses that currently use any form of workspace, 76% said they are either actively searching for a new space or plan to start looking in the next 12 months. Most (59%) said they are regularly assessing the choice of different workspaces to see which best fits their needs. Speaking specifically to those who currently use a flexible or coworking space, nearly half (45%) agreed that they were unlikely to ever rent their own private office again, with 59% agreeing that flexible workspaces are the ideal fit for their business’ needs. Thomas Proctor, CEO of NCG, said: “The times have changed. Today businesses have so much choice of where their employees can work. Clearly, leased and serviced offices remain popular, but flexible and coworking spaces are on the rise, while pay-as-you-go spaces are also becoming an attractive option for businesses that are largely remote but meet in person on occasion." “There are significant knock-on effects for the entire office and commercial real estate sectors. Ultimately, choice is power, and our research highlights that businesses are constantly evaluating their options. This means that deliver great spaces and great experiences is imperative – otherwise, as our data proves, businesses will simply vote with their feet." “It’s critical that landlords and workspace operators remain agile if they want to successfully meet the changing demands of modern working – namely, spaces that are dynamic, attractive and tech-enabled. Doing so can simultaneously improve tenant retention and futureproof their assets.”

But 64k vacancies remain, worth £6bn in lost output Key findings: Scotland, Wales & Northern Ireland see manufacturing jobs increase. In contrast every English region bar the East of England has seen manufacturing jobs fall. Every region and nation bar one shows double digit output growth in the last decade. Yorkshire & Humber, North East and South West the best performers. Every nation and region bar the South East has a higher than average dependence on manufacturing as a share of its economy. West Midlands the only region still below pre-pandemic output. The three devolved nations of Scotland, Wales and Northern Ireland have seen a significant growth in the number of manufacturing jobs in the last year, in contrast to every English region bar the East of England which has seen a fall. The findings come in the Make UK/BDO Annual Manufacturing Outlook Report which shows that, in the twelve months to March 2024, the number of manufacturing jobs in Wales increased by 13,000, 10,000 in Scotland and 2,000 in Northern Ireland. By contrast, every English region saw a fall manufacturing jobs in the same period with the East of England being the only region showing a slight rise. This meant the sector saw an overall fall of 34,000 jobs in the twelve months to March. (1) According to Make UK, the increase in Wales is likely to have been driven by the significant supply chain in the Aerospace & Defence sectors which have seen strong growth in the last year. The Transport Equipment sector (mainly aerospace) accounts for 15.5% of manufacturing in Wales, the largest sub sector. In Scotland, the increase is likely to have been driven by the growth of renewables investment, especially offshore wind. However, despite this fall, the pressure on finding skilled people is still severe as 64,000 vacancies remain in the manufacturing sector, accounting for some £6bn per annum in lost output according to Make UK analysis. (2) In response, Make UK is urging the new Government to make tackling skill shortages and, reforming the technical education system, the centrepiece of its industrial strategy. Commenting Verity Davidge, Director of Policy at Make UK, said: “Industry remains critical to the growth of the economy, providing high value, high skill jobs and aiding the process of creating wealth across the UK. The new Government has made a welcome bold statement of its intent to tackle the UK’s anaemic growth at national and regional level." "It should now back this with a radical, cross government, long-term industrial strategy which has the need to tackle the UK’s skills crisis at its heart. This mission critical vision should be allied with the local growth strategies and priorities of each region, including infrastructure and innovation, together with other measures to ensure the UK is now fully open for business.” Richard Austin, Head of Manufacturing at BDO added: “Over the last few years, manufacturers across the regions and nations have faced multiple external shocks and changing policy priorities." "They have shown great resilience in overcoming these challenges. There is now an exciting opportunity for the sector to work with the new government on the development of a new long-term industrial strategy. This could help address longstanding skills shortages, boost infrastructure, improve productivity and unlock vital investment to help drive economic growth and prosperity.” The report also analyses the growth in output across each nation and region over the last decade, as well a comparison between pre and post-pandemic levels of output. It shows that, despite the challenges posed by Covid, Brexit and the energy crisis, every English region bar one has shown double digit growth in Gross Value Added (GVA) since 2013. Yorkshire & Humber has seen the best growth in output in that period (40%), followed by the North East (30%), and South West (27%). This compares to the average growth in manufacturing GVA across the UK overall in the same period of around 23%. (3) Furthermore, the report highlights the importance of manufacturing to regional economies with every area in the UK, except for the South East & London, seeing an above average contribution from manufacturing to its local economy. For example, the North East may have the smallest share of overall manufacturing output in the UK (around 4% of total manufacturing), but industry accounts for almost 15% of the region’s total output. The East Midlands has the highest share of manufacturing in its regional economy at almost 16%, while the West Midlands and Yorkshire & Humber also have a significant contribution above the national average. According to Make UK, this highlights the importance of the new Government’s industrial strategy to raising the performance of regional economies and, addressing inequality, given manufacturing jobs are better paid than the national average. The survey also shows that every region and nation has returned output above pre-pandemic levels apart from the West Midlands due to the downturn in the automotive sector and the transition of supply chains to electric vehicle production.

An award-winning Leicestershire firm that supplies luxury brands such as Givenchy, Sisley, and LVMH, as well as High Street giants Boots, Superdrug, and Asda, has announced a major rebranding initiative and the appointment of a new Managing Director. Melita POS, headquartered at Leicester’s Meridian Business Park, has been a leader in end-to-end Point of Sale (POS) and merchandising solutions for over 25 years. The company, which unites the diverse services of design, manufacturing, warehousing, merchandising and installation under one powerful brand, is the result of the amalgamation of Display Logistics, DL Manufacturing, and KK Installations. Despite these changes, Melita POS remains a proud family-owned and operated business. This strategic move marks the beginning of an exciting new chapter for Melita POS, with an ambitious program of investment and growth being spearheaded by new Managing Director, Dan Jacques (pictured) alongside Company Director Emily Jacques, Operations Director, Rich Metcalf, Production Director Glynn Parker and Warehouse Director, Mark Jacques. New MD Dan Jacques said: "I am incredibly proud to take on this role and continue our family legacy. Our rebranding as Melita POS and the integration of our diverse services are pivotal steps in enhancing our ability to serve our clients more effectively. Melita is a name with significant personal connection to our family, making it the perfect choice for a business that values long-term relationships." Originally established as Display Logistics in 1997 by Shivena and Steve Jacques on West Avenue in Wigston, the company has built a stellar reputation with its commitment to excellence and innovation earning it numerous industry accolades and a trusted position within the market. Today Melita POS employees 35 workers and brings a turnover of over £6 million to the local economy, as well as a commitment to support growth and success within Leicestershire. An ambitious growth strategy accompanies the new company structure with Melita POS expecting to increase its workforce by 50 per cent and its turnover by over 200% over the next five years, as part of an international development strategy that will turn this family firm into a global heavyweight. Dan continued “As a company we are deeply committed to driving growth, ensuring sustainability, and fostering the development of our talented staff. Our future success hinges on our ability to innovate and adapt, while also nurturing a work environment that values and invests in our people. Together, we will not only meet but exceed our goals, creating a lasting impact for our clients and the community." For more information about Melita POS and its services, please visit here.

Wet conditions failed to dampen sprits at the popular JCB Lakeside 5 and Fun Run – which saw a bumper field raise thousands of pounds for the NSPCC. For the first time in the race’s 41-year history it rained – but that did not deter more than 360 competitors from around the UK and overseas from taking part. The event, which brings together some of the area’s best club runners with JCB employees and their families, also raised £4,150 for the NSPCC. Race organiser Mick Grindey, who has taken part in every Lakeside 5 since it was first run in 1983, said: “It is amazing to see such a big field and supporters, who have come along despite the wet conditions and created a really great atmosphere. When the Lakeside 5 started in 1983, just 95 competitors took part, which shows how far it has come.” The fundraising total was boosted by a sponsorship from Cheadle-based Ecam Engineering. First across the line was City of Stoke Athletics Club runner Chris Gidlow who completed the five-mile main course around JCB’s World Headquarters in Rocester, Staffordshire, in a time of 26 minutes 57 seconds. First female across the line was Chris’ fellow City of Stoke AC runner Chloe Hawkins in 32 minutes 28 seconds. First JCB Man was Jason Burgess in a time of 29 minutes, 32 seconds – for the second year running – and First JCB Lady was Liz Plant in 42 minutes and 26 seconds. Also in action was Charles Bevan, of Abbots Bromley, who has also taken part in every JCB Lakeside 5 race. The former JCB Electrical Engineer always runs in fancy dress and this year it was Charlie Chaplin. Charles, 77, said: “It is just great fun to keep coming back and taking part. I have no plans to stop any time soon – there is a great spirit surrounding this event.” Another in action was Ted Prince – a third-generation member of his family to work at JCB. The Sales and Marketing graduate was in his first ever Lakeside 5. He said: “It is just an amazing thing to be a part of and so pleased we have raised so much for the NSPCC.” There was a good international representation too. The field included JCB Netherlands employee Michel Jansen who was taking part in his seventh event. The finance expert flew over to the UK just to take part. He said: “I love coming back – and this one is special. It marks my 20th year working with JCB in the Netherlands, so this is my birthday present to myself.” Also running was JCB India employee Umesh Sakore, who is on a two-year-placement in the UK. He ran the two-mile fun route with his wife Smita and their daughter Asmi, 10, and three-year-old son Ansh. The Design Engineer said: “It is a brilliant family occasion so what better than to run it with my wife and children. We all thoroughly enjoyed it – a great JCB occasion.”

Independent family brewer Shepherd Neame has teamed up with Leyton Orient FC to create a commemorative limited-edition British lager for the club’s pre-season friendly against Hearts of Midlothian. Leyton Orient will travel to Edinburgh for the match, which is part of Hearts’ 150th anniversary celebrations. The game has additional significance as it will also commemorate both clubs’ contribution in the First World War. Leyton Orient, known as Clapton Orient at the time, and Heart of Midlothian formed a close bond during the early period of the Great War when a number of players from each team responded to Lord Kitchener’s call for volunteers to form a New Army. These professional footballers inspired their loyal supporters to do the same, providing a huge boost to recruitment.  Players from Hearts and Orient led the way as the first professional footballers to volunteer en-masse for what would known as ‘Pals’ Battalions’, with Hearts joining the 16th Royal Scots - 'McCrae's Battalion', and the Os enlisting into the 17th Middlesex - 'The Footballers' Battalion'. To mark the occasion, Shepherd Neame, which was announced as the official provider of beer, cider, wines, spirits and soft drinks at Leyton Orient’s Gaughan Group Stadium in East London at the start of this month, has marked the occasion by creating a limited-edition British lager. The bottle design – voted for by the fans – pays homage to the kit that Clapton Orient wore at the time of the War, as well as those players who took up arms, with the front label featuring an image of the squad, and the neck showcasing the names of the players who volunteered. Shepherd Neame’s Brands Marketing Manager Rose Davis said: “We were delighted to work with Leyton Orient on the creation of this commemorative lager. Just 240 bottles have been produced, and we hope supporters from Leyton Orient and Hearts alike will enjoy this very special British beer.” Ravi Patel, Leyton Orient’s Chief Commercial Officer, said: “Our history is very important to us at Leyton Orient and we have been so pleased with the interest that Shepherd Neame have shown in it." "I know from speaking to their team that Shepherd Neame have close ties to the war effort as well and it is fantastic that our respective organisations can commemorate an incredible act of bravery from the club’s players during the First World War with a special beer. I’d like to thank all of our supporters who took the time to vote on their favourite design and look forward to seeing the finished product.”

Willmott Dixon has been chosen by Bridgend College for the £60m project to build its new Town Centre Campus development. The College is relocating from its current base at Cowbridge Road Campus to a site previously occupied by the former Police Station and a multi-storey car park at Cheapside, in the heart of Bridgend. The new 13,000 m² development, which Willmott Dixon was procured to build under the SEWSCAP 3 framework, will target being net zero in operation when it’s completed in the summer of 2026. Willmott Dixon is teaming up with Rio Architects on the new campus that will provide exceptional teaching and learning facilities for a wide range of courses for post-16 year old education in Bridgend. Encompassing two new buildings, it includes a 200-seat theatre, hair and beauty salons, recording and dance studios, design workshops, flexible meeting spaces and more. It represents one of the biggest ever investments in Bridgend for the training of young people and members of the community who need to retrain and gain valuable employability skills. Neal Stephens, managing director for Willmott Dixon in Wales: “We are delighted to be chosen for this transformational project in Bridgend. With a strong presence across south Wales, it follows our work to deliver the Police Learning Centre for South Wales Police in Bridgend, which was completed three years ago.” “Just like then, our focus will be on supporting the ‘local pound’ by using regional supply chain partners where possible and working with students at Bridgend College to support their own learning journeys.” The redevelopment is partly funded by the Welsh Government’s Sustainable Communities for Learning programme and will play a key role in the regeneration of Bridgend Town Centre, supporting local businesses and utilising public transport links into the town. Vivienne Buckley, Principal and CEO: “We are excited about the aspirational plans to create a vibrant new town centre campus in the heart of Bridgend. Our ambition is to create a net-zero carbon building, bringing twenty-first century learning and teaching facilities to Bridgend.” This contract follows a series of major developments Willmott Dixon has carried out to improve further education facilities in towns and cities across England and Wales. Recently it completed LTE Group's City Campus Manchester (below), the largest investment in further education and skills in Manchester for 30 years.

The LEGO Group has named Publicis One, powered by Starcom, as its newly-appointed global media agency. The agency was selected after an 18-month pitch, which included incumbent agency Initiative. The LEGO Group has consistently connected with and inspired fans, families, and kids on the importance of play, launching campaigns as part of the “Rebuild the World” global platform, including “Play Unstoppable” and “Play is Your Superpower.” They will continue exploring relevant, and authentic ways to engage its audiences. Its new agency partner, Publicis One, will focus on strengthening these connections within a complex and rapidly evolving media and retail landscape. The LEGO Group’s Chief Product & Marketing Officer Julia Goldin said: “We were impressed with Publicis One’s depth and breadth of expertise – as well as their aligned cultural values. We look forward to working together to further enhance our ecosystem, leveraging their insights and capabilities to create engaging and meaningful experiences for our audiences. Together, we aim to inspire children and families globally, nurturing creativity and fostering learning through play." Publicis One will commence onboarding from the beginning of July, working with Initiative over a three-month period to ensure a seamless transition and continued strong presence for the LEGO® brand. Julia Goldin added: “We would like to thank the team at Initiative/IPG for a great seven years. They have been with us every step of the way as we significantly grew the business, launched our first global brand campaign, and reached more children than ever before. We are grateful for their support and collaboration.”

Although the leading business survey shows that confidence and trading conditions have improved slightly among Scottish firms, it remains at a relatively low base. The Scottish Chambers of Commerce’s Quarterly Economic Indicator also reports continuing investment and recruitment challenges alongside increasing concern from taxation. Scotland’s largest business network is now calling upon government north and south of the border to deliver a long-term economic plan, which supports a just transition, address skills shortages and unlocks investment across the country. Taxation overtook inflation as the leading concern, while fears over competition saw the largest increase (40%) compared to the previous quarter (30%). Stephen Leckie, President of the Scottish Chambers of Commerce said: “Taxation continues to concern firms, to the extent that the issue has overtaken inflation as the leading concern." “This is having a major impact in attracting and retaining talent in Scotland, contributing to the significant labour challenges many businesses are already experiencing. Divergence on personal taxation has exacerbated the issue." “Businesses will be looking to both the Scottish and UK government to set out long-term plans to address the current state of taxation which is impacting growth, investment and talent.” Recruitment difficulties increased from 47% to 55% compared to the last quarter, largely driven by challenges across the retail and tourism sectors. Labour costs are impacting three quarters of firms. Mr Leckie added: “Our report shows that over half of Scottish businesses are continuing to experience significant costs and challenges with attracting and retaining the talent they need." “More restrictive changes to the immigration system made earlier this year, the increase in the national minimum wage, and skills shortages, are all adding pressure on employers." “The UK Government should address this by introducing a skilled migration strategy which is tailored to the needs of the Scottish economy and restore our reputation as a welcoming and open destination for international students to study, live and work.” Q2 saw significant improvement in terms of cashflow and profits for firms - particularly profits - with growth on balance recorded for both trends. Mr Leckie warned: “Our latest survey indicates generally improving business conditions across the economy, albeit significant challenges continue to persist which are limiting the ceiling on potential growth and investment." “The impetus to deliver a credible plan for sustainable growth lies with both the Scottish and UK Government. Now must be the moment to focus on long-term solutions to tackle poor productivity and create an environment for business investment to accelerate." “The first step is engaging with businesses in Scotland and across the UK, to instil confidence in a new partnership between government and the private sector which is ready to propel our economy to growth and identify how initiatives such as the National Wealth Fund will support Scottish business.” The report highlighted that although around four in 10 firms are still holding back on investment, that number was slightly down on the previous quarter. Mr Leckie commented: “It’s positive that the survey results are beginning to see a reversal in the consistent trend of frozen investment. Without unlocking investment, firms cannot power the growth the economy needs and which government is relying on to grow the public finances." “Significant cost pressures, trade barriers and skills shortages, are critical factors to address if we are to see investment across growth sectors such as AI and green technologies." “To support a just transition, the oil and gas sector urgently needs action and a plan that will give them the confidence to unlock investment worth hundreds of millions which is currently on hold due to uncertainty over the UK Government’s commitment to the sector.”

In 2001, Bilal Zein, Chief Operating Officer at Quanon Capital Ltd, set up a Single Family Office, discreetly serving a family of wealth, as well as overseeing their corporate family business and direct operating assets. He has 32 years of experience of managing multi-assets, including financial, legal and operational. Passionate about wealth management, and with a great depth of knowledge in relation to family and corporate governance, he is ideally placed to explain the evolution that a business founder, principal or inheritor may take when moving from using the family business’s offices for support, to setting-up a separate investment office, or moving to a Family Office. According to Bilal, it’s only natural that the founder, or principal of a business, leans on the company’s professionals for personal help from time to time. After all, the business is their life, and vice versa: the founder’s and the business’s affairs often overlap and intertwine. The embedded family office, as it is termed, may also provide support (both investment related and personal) to the founder’s family members that also work in the business. However, there comes a point when the interests of the family and the business are best served separately. “The family office comes in different shapes and forms,” explains Bilal. “It starts with a personal assistant doing some work for the principal and slowly moves on to help with lifestyle, or managing personal financial assets, right up to the extreme of structuring the wealth of the family,” he says. “In between, you have other services that the principal, but more importantly, the next generation, will start to look at. That spectrum ends-up splitting the family office space into investment offices for families, or more comprehensive services – fully fledged Family Offices for the families,” he says. Getting To Crunch Point “For some families it’s just easier to lean on the people that they’ve worked with and trust in the operating business: ‘While you’re doing all this work for the company, can you also do this work for my investments’, for example. That’s very typical. To be honest, I’m a good example. I originally worked for the family business,” Bilal confesses. “But it’s important to understand early on, that you have to have proper boundaries,” he stresses. “It’s very easy to get blurred in terms of the conflict of interests. So, if I’m a lawyer for the business and the principal asks me to look at their personal assets, sometimes those assets may be used for the business and there might be a conflict. Am I looking out for the best interests of the company, or the best interests of the family when it comes to those assets? In the same way, if we’re looking at the financial returns, would the investment assets for the family, or the business come first?” he illustrates. According to Bilal, the majority of wealthy families will have similar types of investments. “Real estate, financial assets and private equity, for example, can all be embedded in the family business, but it will be biased towards what the business understands and is good at. That might be a good thing to focus on, but it has to be done by design and not default,” he cautions. “When you start moving out of the embedded family office you open up to other assets that are available for the family to look at and to invest in,” he explains. “That requires slightly different skill sets and a different focus. The CFO in the operating business is unlikely to be a skilled investment manager and may not have the requisite investment experience or expertise.” Bilal adds. But the critical factor to understanding what type of family office structure to have, is to understand who the office would serve. This question becomes all the more important once the family grows to include multiple generations. “An embedded family office very much serves the members of the family who are in the business and the members of the family who are not working in the business are left behind in a way,” Bilal explains. “This is where the stand-alone Family Office comes in. It’s very important for serving those members of the family who aren’t in the family business.” Understand what the family wants and needs. “There’s no right or wrong about it, it’s just about design and obtaining the best outcome from that design for the family in question,” says Bilal. “Sometimes families decide that they want to stay in the family business, to focus on what they know best and concentrate their efforts and capacity to invest in building or expanding the family business. Other families decide they want to serve the members of the family who are not in management, to diversify and offer other services,” he explains. Stand-alone Investment or Family Office? “Typically, once the principal decides they want to look at investments to diversify for the family, they may choose to focus on just one or two asset classes. I’ve seen a lot of such offices,” says Bilal. “They become expert in that particular asset and it becomes an investment office for the family more than an embedded family office. For example, some will focus on real estate, whereas another family might concentrate on logistics. Effectively, it is a stand-alone asset manager for the family,” he explains. “But, that is only achievable if there is enough scale,” he adds. The basic and most common example is with financial assets, according to Bilal. “It’s the easiest because the providers offer support, whether a private banker, a financial institution or a multi-family office, and they are the easiest to benchmark,” he says. “If the range of the assets under management goes from a few million pounds to one hundred or two hundred million pounds, it could be done through the private banks or asset managers. The lower the level of asset – under two hundred million pounds, say, the more difficult it would be to do it in-house,” he cautions. “It would cost more and there would be less incentive for a manager to run your portfolio. “The attraction for talent is based on reward – that’s the challenge,” says Bilal. “Families can save on private banker or investment institution charges by doing it in-house, but then they would incur the cost of running the office and run the risk of having the bias of one manager, who could at some stage decide to leave – you have to keep that in mind as well: the succession,” he adds. “I’ve been serving one family for twenty-plus years, but I’m not going to be around forever, so you need to think about that.” Another aspect to consider is investment advice from within family itself. “Some families will have among their members, perhaps from the next generation or an in-law, someone who’s financially driven and has the relevant skill set,” suggests Bilal. “That might dictate the family putting the investment in-house. That comes with some risk of bias, whether conscious or unconscious, through the nature of the family relationship, and not to forget the major risk of members of the family deciding to separate from the family or divorce.” he adds. However, it’s not only financial assets. “There’s also real estate, or venture capital, for example. A member of the family might take that on and become the asset manager. The totality of the asset allocation and the investment policy would be skewed towards the skills, or driven by the preferences of the family members. That’s something that I’ve seen a lot,” says Bilal. A Family Office involves additional services “As the family grows you may find you have members, or the next generation, who are not involved in the business or the investments and the question arises: what are you going to do for the rest of the family?” asks Bilal. “This is when the family has to make a decision – does it continue being a family, staying together and putting all its assets and services under one umbrella, and preferably professionalising that approach; or split and everyone goes their own way?” According to Bilal, if the family decides to stay together, it has to ask questions such as, who is family and how do you treat the different generations, in-laws etc. “The first step is designing what the family wants, step two would look at how to deliver that to keep the family together, and then step three would go into the services required from a Family Office, or to look at outsourcing – they might decide they don’t need a family office,” Bilal suggests. Services could include managing the financial assets, legal, tax accounting, compliance, structuring, security, lifestyle services, family education, reporting, succession planning and family governance. Ultimately, the Family Office needs to have a strategy, a clear understanding of what the office will be delivering, to whom, and in what format, and then to have a proper business plan to share with the family. “With that comes the governance,” Bilal highlights. “What will be the relationship between the office and the family? What will be the services required by each member of the family? It has to be clear,” he stresses. “Each family will require different services, but there are some commonalities. Tax is one of them, structuring is another, and wealth planning which I see as the backbone of the family office." “Like everything in life, those are not static,” he continues. “Once you have the design, you have to keep on reviewing the services or the structures that you have put in place for the family, because things change in the family – you have new generations, you have different members of the family moving to different jurisdictions and not to forget the change in the environment (tax, political, social),” Bilal explains. However, it’s not all about wealth planning. For some families the excitement comes not from the investments but from philanthropy. “The Family Office can keep on top of the execution for the family and be their tool,” says Bilal. “The family will agree the themes that they’d like to support and who would be doing what, and the role of the Family Office would be either to execute the plan, or at least to give support to the family, and manage the reporting.” Bilal stresses that linking the non-financial aspects with the financial aspects is one of the most important elements of the reporting. He says: “The family needs to understand, if it has the means and the tools to deliver the best support.” “Technology is moving very fast in this space,” explains Bilal. “Some twenty years ago, very few providers offered technology to support the Family Office. Excel and PowerPoint were, and to some extent still are, the main tools.” “The interface with the family is important – most of families now require reports on their hand-held devices, not even on their laptops. There are plenty providers and each provider meets the needs of the families, more or less, so sometimes you have to complement with another provider." “The challenge for families is to design what they want first and how they want it to be delivered. Then the Family Office would look at the providers and do the proper due diligence to understand which provider will give the best solution for that family. Some providers are at the early days of developing a product, or they are not suitable for the family such as, tax modules,” Bilal warns. “At the moment tax is a specialist tool. Most families include different generations and different jurisdictions and for that you have to have specialist tax input,” he says. “Having one tool that includes tax as well as asset reporting, lifestyle reporting, reporting on collections, and on all of the family’s assets, becomes a little bit challenging. There are tools that claim to do it, but you have to do the due diligence and understand whether those tools will cover the requirements, especially if you have a complex family,” Bilal says. “Moving to the cloud has made the challenges formerly experienced with servers and server locations a little bit easier, but from a tax perspective it’s still not very clear,” he adds. Adopting new technology is difficult “It’s a proper project that needs to be carried out by a team,” says Bilal. “The Family Office would be a good place to start from, at least to understand the needs and to pull in the resources as needed to do the project. It’s lengthy and costly, but there are rewards at the end, but there are costs first!” he warns. Bilal recommends following the 80:20 rule. “The first step is to understand from the family: what they want to see, how often and who would see what. You have to remember that different members of the family will have different needs and expertise. For example, a family member with a financial background and one more into art collections will want the same information, but presented in different ways,” he explains. “You need to have a proper proposal,” he continues. “To do that, you have to first understand the audience: who would see what, how frequently and how – on their phones or a PDF report? Some family members will still prefer a PDF, so you have to look at that. You have to have a proper specification before going to the market and do your due diligence. In one particular instance, a provider had a fantastic service, but when I looked upwards into the ownership it wasn’t something that the family would feel comfortable with,” Bilal confides. “A provider may only be able to give you 80 per cent, and you have to be 100 per cent comfortable with the 80 per cent, rather than going to a provider that claims they can deliver 100 per cent, by outsourcing, or by doing things manually for you,” he explains. “The family may prefer to keep that 20 per cent in-house to keep confidentiality, or avoid the risk from other challenges that the family might run such as, tax. It’s an 80:20 rule.” According to Bilal, another element that the family office should look at before embarking on a new technology project is the exit. “It’s painful to move from one provider to another. You have to think about the exit before getting into a marriage with that provider,” he recommends. Confidentiality is a key concern when deciding on the structure of the Family Office. “Different families will have different structures, but one structure that works well would be to keep the Family Office completely separate from the assets,” recommends Bilal. “It’s not a GP LP (limited partnership), but a standalone entity which has very clear boundaries in terms of what it does. The assets would usually be put into different structures for the family early on, so the entity becomes a management company, in practical terms,” he explains. Keeping assets separate from the Family Office maintains confidentially because any information it publishes, as a management company, will just be costs. “Ideally it owns nothing, so that it could be movable, one day in London, one day in Singapore, and one day in Switzerland, depending on the tax and the needs of the family,” Bilal adds. “Another structure would be to embed the Family Office in the trust structure of the family,” Bilal suggests. “Proper homework needs to be done to understand the structure of the family and how is the wealth structured and consequently, how to best structure the Family Office. That’s the homework that needs to be done specifically for each family. There’s no one size fits all,” he adds. How should a Family Office charge for its services? “To avoid any conflict of interest, it should be a cost plus model,” says Bilal. “The minute you have any complexity it will be challenging not to have a conflict of interest. In my experience it should be a cost plus model and it should be a standalone based on agreed services. If those services are provided equally to all members of the family it’s easy, because it’s a direct charge to the structure of the family,” he explains. “However, if you have distinct needs for specific members of the family, the costs should be agreed at a family level first, at the family council or meeting. Services and their costs have to be clear and measured. It has to be transparent and it has to be reviewed and revisited periodically to make sure that it’s still fit for purpose and that everyone is happy with that,” recommends Bilal. “It’s very hard for the Family Office, especially a small one, to keep timesheets to measure personal usage by family members,” explains Bilal. “There is a thin line between becoming too focused on the timesheets and not doing it at all. There’s a degree of flexibility here, but use has to be reported depending on the assets that the office is managing, the services and the scope, because some services are not measurable,” he cautions. Performance also needs to be measured, but how can you measure intangibles? “That’s the challenge for the Family Office that is serving many generations and providing different services,” says Bilal. “Measuring the performance of the financial aspects is easy – just look at the returns! But how can you reward the Family Office team members who deal with a family member’s household, or help with an insurance claim, or a construction plan for one of the family’s personal properties? That’s more difficult,” he admits. “It all comes back to my initial point: the Family Office should have a business plan and be run like a business,” says Bilal. “Performance against the plan and against the objectives agreed with the family should be part of the reporting tool at the end of each period. It could be quarterly, bi-annually or yearly. The Family Office should sit with the family and have a strategic review of what has been done against what was designed and that feeds into the reward of the Family Office,” he suggests. “If you are an investment office, performance and reward will be linked to the performance of your assets – a financial asset model similar to investment bankers. However, if the Family Office is offering the full scope of services, then reward should be completely, to my mind, discretionary,” says Bilal. “That’s because even as a professional, you naturally have bias towards the classes of asset that would reward you more. It should be discretionary at the end of each period, decided on a one-to-one, or one-to-many basis and based on general performance rather than asset performance because the Family Office team member might have served the family on something which is very important to them, but on which you cannot put a monetary value. The family could agree on a range ahead of time that the bonus could be a percentage, or open – depending on the family. I’ve seen some families that don’t have any range, so it’s completely discretionary: one year it could be ten per cent, one year it could be 200 per cent, that’s up to the family to decide,” explains Bilal. Could a family member run the Family Office? Yes, says Bilal, but it should be based on merit. “It depends whether the family member has enough experience. That experience could be gained by working elsewhere before coming to run the Family Office, or it could be within the Family Office but with a clear path, not just coming straight into the top job. The remuneration has to be based on performance and there should be clear performance management. You don’t get to have the privilege of managing the Family Office just because you have the surname of the family,” says Bilal. Three key things for a successful Family Office: 1. Understand your audience – that’s critical to having a successful role. Understand who they are, what they want and their objectives. Understand the assets and the wealth, and have a clearly designed path for the where that wealth is going to go and who will be part of that journey. 2. Always be ahead of the game for the family – always have a solution. Plan for different scenarios so you can be there, not just for the family but for the assets as well. 3. Be flexible and to revisit the plan because life is not static – just because you did something last year doesn’t mean it’s still fit for purpose today. You have to keep on reviewing and making sure that you have the resources in-house or outsourced, to serve the needs of the family. About the Article This interview was conducted by PKF Littlejohn and first appeared on their website and has been reproduced here with their permission.