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Posted by: John Brace | 6th September 2012

Economy and Regeneration Overview and Scrutiny Committee (Wirral Council) (5th September 2012) Declarations of Interest, Minutes, Business Presentation/Discussion David Downing of Drivecompare.com Ltd Part 1

Interest declaration: The blog is run by Level 80/John Brace that have a commercial relationship with Google.
Interest declaration: The author works in IT technical support/consultancy.

The agenda and reports for this meeting are on the Council’s website.

Present
Councillors
Cllr Mark Johnston (Chair) Liberal Democrat

Cllr Darren Dodd (Labour) deputy for Cllr Jean Stapleton (Vice-Chair) (Labour)
Cllr Denise Realey (Labour)
Cllr Stuart Whittingham (Labour)
Cllr Robert Gregson (Labour)
Cllr Jeanette Williamson (Labour)
Cllr Mike Sullivan (Labour) note arrived at agenda item 3, not present for agenda items 1 & 2

Cllr David Elderton (Conservative) deputy for Cllr Andrew Hodson (Conservative) (Spokesperson)
Cllr Tony Cox (Conservative)
Cllr Peter Kearney (Conservative) note arrived 6.25 pm (agenda item 3)

The Chair, Cllr Mark Johnston Liberal Democrat, welcomed people to the Economy and Regeneration Committee.

Agenda Item 1 – Declarations of Interest 00:07 to 00:15

The Chair, Cllr Mark Johnston Liberal Democrat, invited any declarations of interest from the Committee. There were no declarations of interest/s made.

Agenda Item 2 – Minutes of meeting held on 7th June 2012 00:15 to 01:20

Cllr Stuart Wittingham said he wanted it noted that Cllr Jean Stapleton sends her apologies. The Chair, Cllr Mark Johnston Liberal Democrat, asked a question about page three of the minutes, about the Green Growth Working Party. The answer given by David Ball was that they had arranged a meeting for the 27th September. Cllr Tony Cox referred to a speech he made last year ([2011]) in the Council Chamber. The Chair, Cllr Mark Johnston Liberal Democrat, asked if the Committee were happy to accept the minutes? The minutes were accepted.

Agenda Item 3 – Business Presentation and Discussion – Member of the Business Community 01:21 to 22:00

In the silence that followed the end of agenda item two, a squeaky door was heard opening and Cllr Mike Sullivan (the missing Labour Member of the Committee) appeared. Cllr Sullivan walked over to his Labour colleagues and sat down as the Chair, Cllr Mark Johnston Liberal Democrat, explained his plan for agenda item three.

The Chair, Cllr Mark Johnston Liberal Democrat, said that this was the regular business slot and that David Downing of Drivecompare.com Ltd was here.

David Downing, Chairman of Drivecompare.com Ltd addressed the Committee, accompanied by a Powerpoint presentation of nineteen slides. He explained that the market they were in was worth circa £900 million and that there were thirty-five thousand active driver instructors. Mr. Downing said it was a fragmented market, with large companies such as AA Driving School and BSM Driving School [Ed – AA Driving School and BSM are both owned by the same parent company Acromas] and explained that some of the large national driving schools were set up as a franchise business.

Mr. Downing referred to also to the independent and small schools. He said that the large driving schools accounted for fifteen percent of the market and that the “big guys” spend on Google. He told a story about a man in an unspecified organisation with twenty instructors that had spent £15,000 on business software and search engine optimisation and £6,000 on Google AdWords, that had cried. He explained that he had cried as he didn’t feel he was getting a return on the investment.

David Downing had come up with a business model when previously working for a driving school, but they weren’t interested, he felt that Google was so complex especially for a “one man band”. He said that the software needs to be tailored as the learners were using new technology. Their core product was providing driver instructors with a new learner. The problem he identified was that the driving instructors couldn’t answer the telephone in their car while they were driving, so they had developed a software platform and business service that included a diary, as well as learner resources so learners could practice for their theory test.

Mr. Downing said there had been challenges in the start-up, in going from part-time to full-time there had been some very long days getting ready for launch. He said they had registered the company in Scotland, as there had been a lawyer (and friend) in Scotland helping them, however the Head Office was in this area. Mr. Downing said they had spent a lot of time being pulled through processes about eligibility for grants and funding when one question up front would’ve been useful in finding out they were not eligible. Eventually he said they had decided to stop looking at them.

He explained that as a fluke he had spoken to Kevin [Adderley] at an Invest Wirral one day seminar on recruitment, he had been impressed by the people and been taken over to the table to talk to the Invest Wirral team at an event in Bromborough. Their three key things had been premises, recruitment and human resources. In his view Job Centre Plus (he mentioned Phil Kane) had been “phenomenal” and had helped in their recruitment in narrowing it down to twelve people and they had taken on six or seven. He also referred to the apprentice scheme and how he felt that [on the Wirral] they were all working as a cohesive team, compared to the “one-upmanship” he had experienced in Scotland.

Mr. Downing said they had opened on 1st August [2012] and had sourced as much as possible from local suppliers, with a soft launch on the 2nd August [2012]. He explained what they could have done better and that pride had stopped them opening doors, they had been lucky to get a bank loan but there were a lot of government schemes available if you got turned down by a bank, however as they had houses they couldn’t get funding. In his opinion they had chased things they thought they’d have an entitlement to, but he had given up his paid job in March, once he had been in it for months, somebody had asked him why he didn’t get tax credits? He said don’t be shy, they might wear a suit, but the team is working together and asked if there were any questions?

Cllr Jeanette Williamson (Labour, Liscard), said she had spent time with Invest Wirral and had nothing but praise. She declared an interest as a civil servant working for the Insolvency Service in Liverpool. Cllr Williamson said she had dealt with a bankruptcy for the Official Receiver and had just interviewed a BSM driving instructor, who had to pay £350 a week to guarantee new learners, which they had defaulted on and she wanted to point out the difference between a business offer and a franchise.

Mr. Downing said it had taken him six months to get his head around it as he couldn’t understand the [business] model. He explained that BSM were doing it and pumping instructors into the industry, with the franchise costing £350 a week and a good instructor getting £25 a hour, they had to put in many hours of work before making money. The guarantee of pupils had exasperated business owners and he said that when it was put in front of a Judge, the Judge said it promises nothing and delivers nothing. Mr. Downing said there would always be a place for driving schools but the industry was changing to a model that was a lot more user-friendly. His company had a guarantee that if a learner didn’t turn up then the next one would be free. He explained that in his view this was better than paying a franchise or Google (which he said he’d love to own) where it could be £600 a month for two learners and was speculative.

Cllr Jeanette Williamson (Labour) said people had less money for people’s cars and lessons, tax and insurance had both gone up, but brought up the example of a new learner, just leaving university for a job that needed to learn to drive, who would initially be driving their parent’s car.

A piece of technology that monitors how you drive and alters insurance premiums based on risk was referred to.

Cllr Jeanette Williamson (Labour) thanked Mr. Downing for his answer and wished him good luck.

Cllr Stuart Wittingham (Labour) started talking about engagement, the door squeaked again and Cllr Peter Kearney (Conservative) arrived late (at 6.25pm).


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