It’s always interesting to meet television journalists up close and personal – and that’s exactly what I did on Wednesday, when LEYF Chair of Trustees, Tim Willis and I went to an Acevo Leaders to Leaders lunch. Robert Peston, Business Editor at BBC was the speaking guest, and I had booked the lunch some time ago, as I had got used to using the Peston daily bulletin to keep me appraised of the unfolding economic drama back in 2008, and I was keen to hear his latest economic analysis, along with his take on the way out of the mess.
Once there, it very quickly became clear how Peston lives and breathes business economics. It was like being locked in a room with an Early Years obsessive! He pontificated on the 20 years of unprecedented recorded growth, the lending and borrowing boom and its abrupt end in 2007/08, the shrinking bank balance then replaced by a huge growth in the public sector balance sheet. He described this as the biggest event in his career, one that catapulted him into the limelight; a place he seems eminently comfortable in.
I was very keen to hear his economic predictions. He started by telling us a lot of what we all know too well: Economics is not a good science and we have to look to history for some guidance; and globalisation creates global problems, but we have national governments, so it is hard to find a balanced way to either respond or influence. In effect there is no quick way out of this.
He continued to predict a less optimistic growth rate than Mr Osborne‘s anticipated 2-3%, suggesting reality is more likely to be nearer 1%. He reminded us that debt is still 180% ratio to disposable income, whilst the big cost of the bank bailout debt equated to £5000 for every person on the planet. The most horrible fact was that despite all the cuts, repayment is making little more than a tiny chink in the debt. The reality of economics is that we won’t know if Osborne is doing the right thing until it’s too late.
So his survival tactics were:
- Read his blog (but only after you read mine first!)
- Know your own market
- Know your industry in astonishing detail
- Find ways to mitigate inflation, the increase in food and utility costs and unemployment
- Teach people about managing their money as surprisingly few people understand how money works (a fact borne out by a conversation with the Finance Team at LEYF who noticed the same)
The lunch concluded with Preston advising us to re-think our approach; getting smarter and more efficient, whilst supporting the private sector to develop more jobs.
So that means we continue pushing staff to grow occupancy and collect fees on time, we increase the introduction to finance that our CRLD team has introduced for our apprentices, and we take more apprentices to help them into work. We will also push for a project with A4E to support parents in managing their money and limit the risk of debt.
It was a useful lunch and one which reaffirmed the need to develop, implement and insist on business practices designed to reduce reckless financial behaviour at every level; if left unchecked, this simply puts everything and everyone at risk of disaster.
At LEYF, our core business is delivering daycare for 1500 children each year in our 21 community nurseries; but our core business approach must be working to secure these; and financial rigour is right at the very heart of it.