The businesses keeping Britain’s economy running during lockdown

Linda J. Dodson

While most of the country spent the Easter weekend relatively safely at home in lockdown, millions were at work.

Many of these are public service workers such as those in the NHS. Every Thursday the country rightly takes to his downsteps and open windows to applaud these health professionals.

But there are also many millions of unsung key workers employed by private sector companies, often in unglamorous roles, who are crucial to the fight against coronavirus and in helping to keep the UK economy running even during the long weeks of the lockdown.

The Institute for Fiscal Studies estimates that 22pc of working-age adults are classified as key workers. That equates to around 7.1m people and is likely to be an underestimate as it excludes some workers hard to define.

“The resilience of the economy and society to the Covid-19 pandemic will depend on our ability to ensure key workers can keep working,” the IFS noted in a recent report.

Babcock

Babcock can trace its roots back almost 130 years, as a heavy engineering business working in boiler manufacturing in Scotland. Just before the outbreak of the First World War, the company started working at Rosyth dockyard, creating the foundations for the company’s ship repairs and defence interests.

The company’s emergency services helicopters in Europe have been working hard transporting patients, particularly in hard-hit Italy. The company has used special isolation stretchers aboard aircraft that protect pilots and aeromedical staff from disease.

Parts of the UK’s air ambulance fleet and some police helicopters are also operated by Babcock – famously Prince William was an employee of the company when he worked for the East Anglian air ambulance, right. 

While aerial patient transfers because of Covid-19 have yet to prove a trend, the company is ready for this.

Keeping emergency services vehicles running in London has been key, especially with the police hard pushed to oversee the UK’s lockdown.

Babcock staff maintain, repair and deliver vehicles from several sites in the capital. Although crime levels are down, the fleet is still being worked hard and needs to be ready to respond to emergencies. 

The military continues to operate and Babcock staff are continuing with essential work maintaining ships and vehicles.

Babcock’s nuclear operations are also working as normally as possible at sites like Sellafield. One part of this work is monitoring radiation levels to ensure the facilities are safe and staff are protected.

George Phillips, operations manager, said: “We provide critical environmental and dosimetry analytical services to a number of the UK’s nuclear sites to ensure they meet their site license requirements. The outbreak of Coronavirus in the UK has not changed that important requirement.

“In the days before the UK wide lockdown, and since, we have been continually updating our customers to give them confidence that we are able to continue to provide them with the services they require.”

British Gas

The world may be on lockdown, but there are still boilers to fix. British Gas engineers have fixed 56,400 boilers in the UK since the lockdown was introduced on March 23, a company spokesman said.

As the country’s largest household supplier with about 12m domestic customers, British Gas’s engineers are key to keeping homes and showers warm and lights on. Yet their working life now carries greater risk.

They phone in advance to warn customers they will be wearing protective clothing, and to check whether the customers themselves have symptoms of coronavirus. Engineers are also taking on an extra role of helping to deliver food parcels, working with the Trussell Trust.

At the corporate level, Centrica has joined other suppliers in offering financial support to customers who cannot afford to pay their energy bills due to the chaos wreaked by coronavirus. Under measures agreed with the Government in mid-March, suppliers will offer holidays or reductions on bills. Credit meter disconnections are suspended.

Suppliers aren’t keen to take on the entire burden however.

Companies including Centrica have approached the Government for extra financial support to help them support their customers. So far, they have been rebuffed.

Ex-boss Iain Conn may be relieved to no longer be in charge during such a sensitive time. He stepped down in March leaving the company in the hands of finance chief Chris O’Shea until a permanent chief executive is found.

Centrica, which employs 20,000 people in Britain, has also joined others in suspending dividends and slashing spending.

Given the cut to non-essential services, British Gas is also furloughing 3,800 of its staff –- meaning they will be on leave and will have 80pc of their wages paid for by the government, with the company topping up the other 20pc.

Rivals E.ON UK, Npower and OVO Energy are doing the same.

Those that cannot work have found creative ways to help. Ian Pearce, a British Gas service engineer, based in Bridgend, Wales, is self-isolating and is using his 3D printer at home to make emergency face masks for the NHS.

He can make up to 60 a day – and is now part of a wider group supplying face shields coordinated via the website 3dcrowd.uk. British Gas is helping fund his supplies.

“The need for emergency face shields across the NHS and supporting services is paramount at the moment so I decided to use my skills as an engineer,” he says.

National Grid

The National Grid says its engineers are working round the clock in the company’s national control room to keep Britain’s electricity flowing.

“They do this by ensuring supply and demand are constantly in balance, using generators, interconnectors, storage and flexible demand to manage the system,” the company said in a statement. “We prepare strategies to cope with everything from a full blackout across the country, through to working out contingency measures to ensure the smooth running of our control centre.”

Of course, given the huge shift of the country’s workforce from offices to homes, the grid is being called on in a way never before seen. But rather than an increase in electricity consumption, the company has actually seen a drop off as the UK’s entire economy – from offices to shops to factories – are temporarily shut down.

“We’re seeing electricity demand that is significantly lower than usual, mainly due to a decrease in energy use from large industrial consumers,” the company said.

Daily demand is following largely the same profile – but is reduced by around 10pc overall, largely owing to those big industrial consumers using less power. “The morning demand peak is later than usual – a change we’d suggest might be because the times people are rising are a little later and more spread out.”

The one thing grids need is predictability. Suddenly having millions more people at home was unexpected, but because the situation is stable, the company has been able to model what this move away from commercial consumption towards residential demand should look like.

“Expert operation of the electricity system is needed whatever the level and type of demand,” the company said. “Our forecasting teams and control room engineers work around the clock to keep electricity flowing for all types of consumer, and they’ll be doing this by ensuring supply and demand are constantly in balance.”

Many have been concerned about the possibility of power cuts. But the company says that people shouldn’t be worried.

“We don’t expect the running of our networks to be affected by the coronavirus outbreak,” they said in a statement, adding that the group had well-developed procedures in place to manage the effects of a pandemic, and were “closely analysing the effects on electricity supply since lockdown measures came into place.”

“Moving electricity round our system isn’t just an in-the-moment thing, it requires careful planning and events like Easter require careful consideration,” they said.

“We’re currently analysing the likely system conditions and options so that… we can handover a robust plan to our colleagues who are working in the control room.”

This includes forecasting demand and how much electricity Britain might want, looking at the predicted weather to think about how much wind and solar might be generated, forecasting the electricity that could go back and forth on interconnectors to the continents whilst also considering all the generation that needs to be online to meet demand.

DS Smith

David Smith was the name a Polish immigrant to Britain adopted in the early part of the 20th century, establishing the family box making firm in the East End of London. Today it is a FTSE 100 company that makes half a billion corrugated cardboard boxes across Europe each week – 70m in Britain. And though the company remains tight-lipped about its client list, the rise of e-commerce has transformed its business.

About 90pc of those Amazon boxes we all receive are manufactured by DS Smith. But the company’s boxes pop up all along the supply chain, from farms and fields (where boxing machines are used for newly harvested fruit and veg), through to so-called Fast Moving Consumer Goods (FMCG), produced by major consumer brand manufacturers – Unilever, Nestle, Mondolez, P&G – and on to retailers and hard discount supermarkets, many of which, with fewer staff, leave pallets in aisles for customers to pick through themselves.

“We’re critical to the whole supply chain and classified as a critical business,” says Miles Roberts, the company’s chief executive. For the moment, “all of our factories are open in the UK and right across Europe”.

Box demand from e-commerce has exploded in recent years and, with consumers in lockdown ordering more online, now more than ever: “We’re busier now than at Christmas.”

Understandably, it is FMCG – packaging food and drink and other consumer items like pharmaceuticals to replenish supermarket shelves – that is working closest to capacity. Proximity is key. Across the country, DS Smith has 50 sites, with 10 “big plants” from Edinburgh to Cornwall. It’s biggest is its Kemsley paper mill, 30 miles east of London.

“You need to be close to the customer, through the spine of the country, because the demand is instant. Lead times can be hours.” In that way, through the humble cardboard box, DS Smith is able to take the pulse of supply and demand for countless products in near real time.

“Particularly busy at the moment is garden and DIY stuff,” Roberts says. “Pharmaceuticals are busy as well for obvious reasons.

“From our orders we can tell whether the weather is good or bad, whether it’s Christmas or Easter. When the sun shines, for example, people eat more salad, and we can see that in the demand from our customers and how they pull on us.”

It is a one-business business. “We only make corrugated cardboard boxes,” says Roberts. Typically each is 85pc recycled, with the fibre reused 12 or 13 times before it degrades to the point it is used as fertiliser.

But that box can be hi-spec or low grade, from the size of a matchbox to a 12ft by 8ft (4m by 2.5m) panel for temporary housing, from glitzy champagne boxes sent as corporate gifts by fashion houses, to functional fruit boxes. “The Apple iPhone box – beautifully designed – is corrugated cardboard. Then there’s just high-volume boxes for putting apples in.”

Such adaptability is cardboard’s great strength, and has allowed DS Smith to work with emerging ecommerce businesses to tailor their packaging with colours and logos and, above all, survivability. “It’s got to make it through an, er, ‘aggressive’ supply chain,” Roberts says jovially. “Packages are dropped, thrown over fences, I’ve seen one end up on the roof.” Tailoring boxes can limit the damage. “People are buying fragile items and that’s nail-biting. I had a plant chucked on the doorstep, but because the stem was supported by the box the petals were still on.”

For high end and pharmaceutical brands, the other key advantage of the packaging business is that it provides traceability and a guarantee to customers that products are genuine and original.

What happens to all that cardboard? It’s collected by councils and taken to recycling centres, where it is bought back by the company and reprocessed. “It’s a new box again in 14 days.”

The company is now working with home delivery retailers to make a box that can be dropped on doorsteps rather than carried into homes in plastic bags. “The virus deteriorates very quickly on corrugated,” Roberts suggests. The new boxes will be “fully recycled and completely stackable in the vans that go around,” he says, and should hit the market “in the coming weeks”.

Amazon

In just 26 years, Amazon has gone from a small online bookstore to one of the most influential and valuable companies in the world, responsible for around a third of all online sales in the UK and providing the technology which many businesses rely upon to operate.

Most consumers may think of Amazon as purely an online retailer. But behind the scenes, the company has hundreds of thousands of employees working on everything from artificial intelligence technology – which is then used for its voice assistant – to keeping its logistics operations running in its vast network of warehouses and delivery drivers.

At a time of a global pandemic, UK boss Doug Gurr says one of the most important things Amazon is doing is making sure that customers, and particularly vulnerable individuals, can get the products and services they need right now.

He says: “We hear it from the Government and others that making sure customers can get the products they want in their home is key to making sure they can stay at home.”

As a delivery giant, it is perhaps no surprise that Amazon is where many people have turned to as they are told to stay at home. The company itself has noted a spike in online orders, and last month decided to take the step to prioritise deliveries of essentials and medical supplies. As soon as an antibody test is available, Amazon has said it will be delivering that.

But, keeping people inside does not just mean making sure their deliveries come on time.

They also need something to keep them busy, Gurr says. “We know that when people are stuck at home, they need to be entertained.”

Entertainment is an area Amazon has been spending heavily recently and last year, the company was estimated to have spent $7bn on music and video original content, to be placed on its Amazon Music and Amazon Prime Video channels.

In the past few days, Amazon has announced it is opening up some of that content, particularly educational material which is in high demand as schools are closed.

But while the company may be working to help keep people inside, in what Gurr sees as a “national effort in which Amazon will play its part”, it has not escaped criticism. Unions have questioned the safety of workers in its warehouses and, in the US in particular, staff have launched protests against working conditions.

“We’ve been working around the clock since the early days of the outbreak to make changes to our processes and procure the necessary supplies for us,” Gurr says. “There is nothing more important than the health and safety of our staff.”

Still, other retailers in the UK, such as Next, have taken steps to close their warehouses amid concerns that such conditions are too difficult to police during the coronavirus pandemic.

“We are being asked to continue operating,” Gurr counters. “We are here to serve customers and we will continue to do that, but it would never mean that we would compromise the health and safety of our colleagues.”

National Exhibition Centre

he National Exhibition Centre in Birmingham became operational as an emergency field hospital for coronavirus patients on Friday.

More than 400 workers from the outsourcing giant Interserve and its subcontractors laid down more than 64 miles of cable, 10 miles of copper piping and installed vinyl flooring across the equivalent of 11.5 football pitches, in the first week of construction alone.

Interserve, which is turning itself around following a string of strategic blunders that ended in it being taken over by lenders last year, is crucial to the fight against the coronavirus crisis on several fronts.

Its cleaners, caterers and porters are used by the London Ambulance Service, Scottish Blood Transfusion Service, the BBC and others, while its healthcare workers look after adults and children in the community, delivering and administering drugs and nutrition.

It is one of a handful of strategic suppliers to the Government, yet it came within a whisker of collapse last year, lumbered with debts and an ill-fated foray into energy-from-waste.

Creditors including RBS and HSBC took control as part of a pre-pack administration process that wiped out shareholders. It followed the collapse of construction outsourcer Carillion in early 2018, raising fears for the sector which is under pressure from costs rising costs including the Living Wage and shrinking margins.

Listed rival Mitie said in March that it was starting to see a slowdown in discretionary spend in some sectors, and that it could not provide financial guidance for the year because of the uncertainty around Covid-19. Its bosses have taken pay cuts, and it is also axing its final dividend.

Now led by its divisional heads rather than one chief executive, Interserve is trying to hire about 1,500 new staff to cope with the surge in demand from the NHS.

That includes at least 200 people it will need after being hired on April 9 to manage the facilities at the new emergency NHS Nightingale Hospital in north-west London, which is looking after coronavirus patients.

The deal was agreed after Inteserve said it could be ready with full services within ten days. The hospital will have 500 beds, with the capacity to increase to 1,000.

Meanwhile, individuals within Interserve doing their bit to help fight the virus. Community nurse Amy Jones has had her studies to be a special needs teacher postponed, and so has increased her hours with Interserve, where she looks after an 11-year old boy with complex needs. “I wanted to help more,” she says. “He was in a care home but they have had to close because of the coronavirus and he gets extremely frustrated that he doesn’t have the same routine.”

Veolia

Veolia, founded as the Compagnie Générale des Eaux by imperial decree of Napoleon III, is now a critical part of UK day-to-day life, supplying businesses and millions of people up and down the country with drinking water, rubbish collection or energy.

Its customers include 133 hospitals battling the coronavirus outbreak. “There’s more clinical waste being generated –- think about all that PPE (personal protective equipment),” says Veolia’s Richard Kirkman. “We’ve put on new services to get rid of that.” Veolia also runs boiler rooms in 108 hospitals – with gas turbines and batteries ensuring uninterrupted supplies of heat and electricity and, in some cases, cooling.

But for most of us, Veolia means bin collections. Of the company’s 14,000 UK staff, 11,000 are out on the streets, making sure that rubbish is not left to fester and create another public health hazard. “That’s why we were founded, to ensure public health,” says Kirkman.

But maintaining the service (in what he likens to “a military operation”) has been challenging. The pinch point, interestingly, is the driver’s cab in its fleet of bin lorries, where teams up to four strong are unable to maintain proper “social distancing”. To prevent spreading the disease in cramped conditions, loaders are being asked to walk as much of the route as they can, and the cabs are regularly deep cleaned.

“There’s no one better than a refuse collector at knowing how to stay clean,” says Kirkman. “They know hygiene. There can be anything in people’s rubbish. Staying protected today is an extreme version of what we do anyway.”

Though Veolia has seen a greater amount of clinical waste from hospitals, its other volumes from business have collapsed. “We’ve got very little commercial waste,” says Kirkman. There are, meanwhile, uneven spikes in domestic food waste and recycling, which the company is studying to detect new patterns. For the moment, however, it can be hard to work out where to be and when.

“We’re seeing changes in the amount of waste, different things in different places, and we’ve got higher absenteeism than normal, so we’re asking for a bit more latitude from the public. For us it’s all hands to the pump.”

In its 10 incineration plants, where energy is generated by burning rubbish (which, with three biomass plants and 400 CHP units, power 1.2m homes), that has meant some teams confining themselves to the site (there are sleeping quarters!) for two weeks at a time. “Keeping isolated in the control room so that we don’t have any risk is something that we can do, so we have done in some cases,” says Kirkman.

He emphasises the importance of recycling, calling lockdown “a good opportunity” for us all to get it right. It is, he insists, a critical task, now more than ever, “that packaging goes back into the UK supply chain”.

For example, the company recycles hundreds of millions of plastic milk bottles. “If we don’t continue doing that there won’t be enough plastic to put milk back out on the shelves. It won’t run out in a day, but over a number of weeks we’d be in a difficult position. There’s a relatively short supply chain.”

From landfills to sewerage treatment, all Veolia’s sites are still functioning. But there were initial tricky evaluations as knowledge of the disease grew.

For example at its 16 wastewater treatment plants, where it treats 880,000 cubic metres of wastewater per day, serving 1.8m people, “we had rapidly to get up to speed – was there any Covid-19 transmission through sewage?” It was a critical question: “Sludge is still coming down the pipe.” Research was done which “says it is still safe to work and we’ve been able to continue that operation – but otherwise the whole operation comes grinding to a halt”.

Kirkman says the bin men are seeing notes left out and far more smiles and waves that in normal times. “They are out there providing an essential service.” Such support maintains morale.

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