The recent announcement in the new coalition's emergency budget of 25 per cent cuts to Government departments was initially more a cause of puzzlement than alarm. What would such a huge across-the-board drop in spending mean? The answer is slowly emerging, and the consequences for the amenity plant world are not good.
First has come the announcement of an end to around half of all projects under the Building Schools for the Future programme, leading to the open space work at up to 700 schools being lost.
This came on the back of news last month (HW, 18 June) of the revocation of regional spatial strategies in England, which provided a statutory framework for regions' development. This may push back further the recovery in the housing market, as planning decisions are devolved to a new local level.
However, latest figures from the National House Building Council suggest the story on the domestic side is not entirely one of doom and gloom. These show an increase of 68 per cent in the number of new homes registered in the UK over March-May compared to the same period last year.
James Coles & Sons marketing manager Lynn Hunter says: "We are seeing more demand from smaller local developments, but the larger regeneration schemes will take a while to come back."
But councils' non-statutory spending, already under pressure, is likely to be a significant casualty of spending cuts. "The local authority business will be the hardest hit," says Hunter. "But we are looking at how they can best use their budgets - for example, using smaller trees, in which we specialise, which give you more for your money."
While retailers and their suppliers have benefited from a degree of replacement planting following the harsh, prolonged winter, this appears to have had only a negative effect on amenity nurseries. "We had a tough January, as did our landscape customers, but as we have good long-term planning in place we were able to ride that storm," says Hunter.
Explaining why fewer amenity plants are being replaced, she adds: "Landscapers tend to be more cautious in what they plant than home gardeners."
Boningale Nurseries managing director Matthew Mott agrees that the winter weather has not helped. "We have lost more plants than we have for many years. That's partly down to the range of plants that people demand - a lot of which would not have been considered hardy 20 years ago. We have increased our protected areas but would have done that anyway. I don't think we're in for consistently cold winters."
He says other factors are contributing to an already tough situation: "It's becoming more difficult to decide what to grow, as the range that customers demand is larger now. We don't get much notice and we have very little opportunity to grow to order, so the majority of production is speculative."
Of the demand for plants around new housing developments, he says: "This spring and summer weren't as bad as last, though it's gone quiet now. But one of the most significant factors has been the cutbacks in the schools programme."
Sales of smaller plants are also suffering from the current uncertainty, says Wyevale Transplants director Steve Ashworth, who is the new chairman of the HTA tree and hedging group.
"Everyone is hovering and wavering, waiting to see where the Government cuts will fall - they will take time to filter through," he says. "Conservation organisations are lobbying them not to cut grants to create woodlands and hedgerows - and we are all anticipating local authorities having less in their pockets. Fortunately, what we produce costs pennies, so is a fairly resilient product. People will turn to us rather than plant big specimen trees."
He adds that the favourable exchange rate, which has made UK-grown plants relatively more affordable than imports, "has been an undeserved holiday".
He explains: "It gave us a cushion last year, but we shouldn't be complacent. On the other hand, it showed some customers that they could use plants that are entirely British-grown - that cuts ice with specifiers and with the public."
Johnsons of Whixley director and past HTA president Andrew Richardson says: "Having visited some landscapers in London recently, I must say they were a lot more upbeat than last year. But the effect of the spending cuts is worrying. In the short term it may not be so bad. But when the housing market died off, Government spending on schools and hospitals filled that gap." And even when commercial work revives, he adds: "We are at the end of the chain, and that's not going to change."
Richardson sees the current squeeze on amenity growers as part of a longer-term trend. "Growers like Hiller and Notcutts (now John Woods Nurseries) used to do a huge amount of amenity growing - as did Blakedown, which is no longer growing at all."
But Robin Tacchi Plants director Gill Tacchi believes there are positives to be taken from the current situation. "It's a great opportunity for change," she says. "This is the worst downturn I've ever been in, but things go in cycles. You have to keep as informed as possible, be adaptable, and think outside the box.
"We relied a lot on repeat business, but even before the credit crunch, the warning signs were there. We took a very careful look at the market in order to expand our customer base and as a result we now have a bigger spread.
"The work that we are winning is more specialised and calls for higher plant quality and more specialised skills, which makes plants suitable for retail too. We have tried to keep away from more run-of-the-mill landscape work."
One surprising aspect of the current market is the relatively small amounts of traditional landscaping plants being used, she says. "We are being asked for many more perennials and wild flowers, but at this rate we will lack structural plants - in time, those will come back."
However, she does not believe nurseries have to keep a full range of stock all the time. "The customer has become more educated and understands that plants are not always available," she says.
For the amenity sector as a whole, Tacchi concludes: "Amenity nurseries must be thinking about where they go from here. There is work around, though not nearly enough. The industry will have to become more proactive.
"A shake out in the sector could bring in new people able to look at things with new eyes. But there have to be better profits first. We have allowed margins to grow less over the years and we are not regarded very favourably by banks and credit agencies."
IS RETAIL THE ANSWER?
Traditionally, the UK hardy nursery stock sector has been divided between suppliers to the amenity sector and suppliers to garden centres and other retailers. But the combination of difficult market conditions on the amenity side and a relatively buoyant retail market has tempted some amenity growers to cross the fence.
Boningale Nurseries is one that is branching out. Managing director Matthew Mott says: "Switching from one to the other is not straightforward, but we used to grow for retail and are fortunate in having the necessary production skills on the nursery. But if the pound does strengthen, that will put pressure on retail sales from importers."
He adds that the West Midlands nursery has even looked into the feasibility of exporting: "The price of UK-grown stock is attractive and there may be opportunities on the retail market, but it's not very reliable."
But James Coles & Sons' Lynn Hunter says that company "will stay with what we know". She adds: "For retail, you have to be set up for labelling plants and having them ready for sale, and while we do larger stock, the retail customer wants a plant they can drive away in their cars."
Johnsons of Whixley, meanwhile, is unusual in its strategy of working in the three sectors of amenity, retail and cash and carry. "It restricts you a bit, but it also gives you security," says Andrew Richardson.
"Growing specimen plants for retail is an increasing part of our business - in a downturn, people stay at home more. But it's such a different market, a different mindset. Amenity is predominantly about price, whereas at retail, customers will happily pay for a quality plant. You can't just have one sales team."