Introduction

On 3rd October 2017, the Office for National Statistics released the 2017 UK Business Counts data. This data consists of two separate datasets: one containing counts based on the number of enterprises in an area and the other a count based on the number of local units.

An enterprise can be thought of as the overall business, made up of all the individual sites or workplaces. It is defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that has a certain degree of autonomy within an enterprise group.

A local unit is an individual site (for example a factory or shop) associated with an enterprise. It can also be referred to as workplace.

The product gives counts of the number of enterprises or local units within a geographic area, down to middle layer super output areas, broken down by employment size band, detailed industry (5 digit SIC2007) and legal status. The UK Business Counts data is available through Nomis – www.nomisweb.co.uk

This post gives a brief of key high level information from the release. In some instances it includes comparisons to the London region and the Local London sub-region. Local London is the combination of 8 east-London boroughs that were joined together for the purpose of skills and employment area based reviews and funding devolution deals:

·        Barking and Dagenham ·        Bexley
·        Enfield ·        Greenwich
·        Havering ·        Newham
·        Redbridge ·        Waltham Forest

 

Enterprise Growth 2016 to 2017

Compared to 2016, there was a 6.5% increase in total enterprises in Bexley (an additional 540 enterprises) to 8,860. This was slightly above London at 6.0%, but below enterprise count growth across the Local London sub-region which saw 9.5% growth between 2016 and 2017.

Growth in Bexley occurred in enterprises with fewer than 10 staff (6.5%) and enterprises with 10 to 49 staff (6.4%). There was negative growth in enterprises with 50 to 249 staff (-4.3%) and no change in the number of enterprises with more than 250 staff. As a result 98.5% of Bexley’s enterprises employ fewer than 50 staff.

Broad industry group ranking by total enterprise count (largest to smallest), Bexley 2017

Broad Industry Group 2017 rank Position change from 2016
Construction 1
Professional, real estate, scientific and technical 2
Information and communication 3
Administrative and support services 4
Health 5 +1
Retail 6 -1
Wholesale and motor trades 7
Accommodation and food services 8
Manufacturing 9
Other service activities 10
Transportation and storage 11
Education 12
Financial and insurance 13
Arts, entertainment and recreation 14
Primary and utilities 15

Percentage growth in enterprises by broad industry group, Bexley, Local London and London 2016 to 2017

Local Unit Growth 2016 to 2017

In terms of local units Bexley had 10,000 units in 2017, an increase of 5.6% from 2016 (an additional 530 units). This narrowly outperforms London at 5.5% growth over the same period, but trails behind Local London at 8.3%.

As with enterprise growth in Bexley, local unit growth was most significant in those accommodating fewer than 10 staff (6.1%) followed by units accommodating 10 to 49 staff (0.5%). There was negative growth in the number of units accommodating 50 to 249 staff (-2.2%) and no growth in the number of unit accommodating more than 250 staff. As such, 97.4% of local units in Bexley accommodate fewer than 50 staff.

Percentage growth in local units by broad industry group, Bexley, Local London and London 2016 to 2017

Despite strong unit growth in industries such as education, health and information and communication, based on the total unit count there is no change in industry rankings from 2016.

Broad industry group ranking by total local unit count (largest to smallest), Bexley 2017

Broad Industry Group 2017 rank Position change from 2016
Construction 1
Professional, real estate, scientific and technical 2
Information and communication 3
Administrative and support services 4
Retail 5
Health 6
Wholesale and motor trades 7
Accommodation and food services 8
Manufacturing 9
Other service activities 10
Transportation and storage 11
Education 12
Financial and insurance 13
Arts, entertainment and recreation 14
Primary and utilities 15

 

Industry Specialisation 2017

Based on share of total enterprises in the London region, Bexley increased its share to 1.8% in 2017 (up 0.1 percentage points from the previous year). Using this share as an indication of industry specialisation within the London region, Bexley contributes to London’s industry as follows (with industry share in parentheses):

Bexley share of London industry by broad industry group, 2017

Broad Industry Group 2017 rank Percentage share Position change from 2016 Percentage point share change
Construction 1 3.7 -0.1
Manufacturing 2 2.8 0.0
Transportation and storage 3 2.7 -0.2
Health 4 2.4 0.2
Other service activities 5 2.0 0.0
Wholesale and motor trades 6 1.9 0.0
Education 7 1.9 0.0
Accommodation and food services 8 1.8 -0.1
Retail 9 1.6 -0.1
Information and communication 10 1.5 0.1
Primary and utilities 11 1.5 0.2
Administrative and support services 12 1.5 0.0
Professional, real estate, scientific and technical 13 1.2 0.0
Financial and insurance 14 1.0 0.0
Arts, entertainment and recreation 15 0.6 0.0

Not demonstrated by total enterprise share is Bexley’s strength in both construction and manufacturing when considering enterprises with 50 to 249 staff. For these industry and staff head count cohorts Bexley’s share of London industry are 5.3% and 5.5% respectively. To put it another way, 1 in 20 of London’s medium sized construction / manufacturing enterprises are within Bexley’s boundaries.

In the Local London sub-region, Bexley’s share of total enterprises fell by 0.3 percentage points to 10.4% in 2017. This follows Local London’s stronger enterprise growth in the 2016 to 2017 period. Using this share as an indication of industry specialisation within the Local London sub-region, Bexley contributes to industry as follows (with industry share in parentheses):

Bexley share of Local London industry by broad industry group, 2017

Broad Industry Group 2017 rank Percentage share Position change from 2016 Percentage point share change
Manufacturing 1 13.6 +1 0.4
Transportation and storage 2 13.0 +5 2.6
Retail 3 12.3 +11 3.8
Arts, entertainment and recreation 4 11.7 +11 4.3
Construction 5 11.0 -4 -2.7
Education 6 10.8 0.2
Professional, real estate, scientific and technical 7 10.7 +4 0.7
Accommodation and food services 8 10.7 -3 -0.5
Administrative and support services 9 10.1 -1 -0.2
Information and communication 10 9.6 0.1
Wholesale and motor trades 11 9.4 +1 0.3
Health 12 9.1 -3 0.0
Primary and utilities 13 9.0 0.2
Other service activities 14 8.2 -10 -3.6
Financial and insurance 15 7.5 -12 -5.3

As with the London shares, some Bexley strengths are hidden within this data. Continuing with the construction and manufacturing industries, Bexley accounts for 20% of medium sized enterprises in the Local London sub-region for both sectors. In addition, following a 10.6 percentage point increase in its share between 2016 and 2017, Bexley accounts for 27.3% of the medium sized administrative and support services industries in Local London.

 

A Boom in Education?

A review of enterprise and local unit percentage growth in the Bexley, Local London and London geographies shows the education sector (standard industry classification 85) seeing the most significant growth in the 2016 to 2017 period.

At the most detailed level, a 5-digit subclass, education industry enterprise growth in Bexley is predominantly driven by a 100.0% increase in the number of micro sized sports and recreation education enterprises (SIC 85510). More significant, however, is the increase in other education (not elsewhere classified) industries (SIC 85590) which saw 55.6% growth in the period – an additional 25 enterprises. This latter industry is of interest as the Local London sub-region saw enterprise growth at 59.0% over the period and London 37.6%, with both geographies seeing most significant growth in micro sized enterprises in this subclass.

The Office for National Statistic defines this subclass as including:

  • education that is not definable by level
  • academic tutoring
  • learning centres offering remedial courses
  • professional examination review courses
  • language instruction and conversational skills instruction
  • computer training
  • religious instruction

This class also includes:

  • lifeguard training
  • survival training
  • public speaking training
  • speed reading instruction

This class excludes:

  • adult literacy programmes
  • general secondary education
  • technical and vocational secondary education
  • higher education

By this definition it could be suggested that there has been a boom in private skills tuition, particularly in the Local London sub-region. This could be linked to educational reforms that have taken place over the last 12 months including more challenging A-levels and the changes to GCSE English and maths gradings (which have led to some post-16 institutions raising their entry criteria). Indeed, the cultural demographics of the Local London sub-region would suit enterprises providing language instruction and conversational skills instruction (e.g. ESOL) and the low-level skills demographics (compared to the London region) would suit a number of enterprises matched by the ONS definition. However, given the potential of future skills funding devolution, the sustainability of these businesses may be questionable.

UK Business Counts 2017 – a Bexley Brief