Looking at the bigger picture – how do political, legal and economic factors influence your practice?

In this short article series, we are discussing the concept of a PESTLE analysis as an analytical tool for your veterinary practice. In the first part, we looked at how PESTLE works and the steps to work through.

A PESTLE analysis evaluates the key external factors affecting a business under six key themes: political, economic, sociocultural, technological, legal and environmental. There can be significant overlap between several of these areas, so in this article we’re going to look more deeply at three of them: the political, legal and economic influences. These factors cover a vast array of topics affecting most areas of veterinary work, and the sheer volume of information available can make it challenging to sift out what is the most relevant.

We’re going to start with the second step from the PESTLE process: Identify your sources.

Identifying your sources

1) Start with the news

Reputable news reporting is a good start for political and economic information. The established news media will report in print, broadcast and social media format – explore what works best for you, and ensure you distinguish between fact and opinion.

2) Guides and explainers

There are some really useful websites and social media accounts that aim to make complex political, legal and economic topics more understandable to those outside the fields.

Simple Politics has active social media feeds aiming to make political matters in the UK “clear, accurate and impartial”. They are well worth following if you find the idea of politics daunting; the section of their website “The explainers” is useful for an introduction to modern political thought.

Law Plain and Simple does a similar thing for legal matters, publishing a range of explainers on UK law and a separate section on Scottish law.

The Economist magazine has an A-Z of economics terms to help you understand economic reporting, as well as a section of explainers on various financial topics.

3) Data and information

Organisations publish a lot of data, so it can be tricky to wade through and pick out what you are interested in. However, they can be useful for identifying large-scale trends.

The Office for National Statistics is a government body that publishes data including crime statistics, employment rates and demographic information from the national census. Local information is available from local councils, with local crime data available by entering your postcode at www.police.uk. Research group YouGov publishes survey data and opinion trackers on many aspects of UK and international political life.

The impact of politics

Political issues can affect veterinary organisations in a number of ways. The government of the day will set fiscal (tax) policy, monetary policy, legal policy and tax policy, set environmental regulations, issue trade restrictions and reform, set tariffs and regulate working conditions. Global issues can create challenges for even the smallest of organisations.

Some questions to start asking yourself when assessing how political issues might affect your practice:

• What is the political outlook of the current government? How does this impact how the country is run?
• When is the next local or national election? Who are the contenders? What are their views on factors that could affect your practice such as business policy, animal welfare, mental health services?
• What is the local or national crime situation currently? How does this affect your practice?
• How could pending legislative or taxation changes affect your practice?

Political factors do not just have to come from government – they also include sector-specific influences, such as decisions made and regulations set by the Royal College of Veterinary Surgeons or Veterinary Medicines Directorate.

The impact of the law

Almost all branches of the law will affect business, employment and the veterinary sector. Some examples for you to consider:

• Contract law is a branch of civil law dealing with the creation, enforcement and termination of contracts – this will come into play in, for example, your contracts of employment, or when you admit a patient for surgery and your client consents to the procedure. Terms and conditions are a branch of contract law making each party aware of their rights and obligations prior to the agreement, and will apply to every “transaction” you carry out
• Employment law covers relationships between employers and employees – what employers can ask employees to do, what employers can expect from employees and employees’ rights at work. The Chartered Institute for Personnel Development (CIPD) has excellent free resources available on many aspects of employment law, including statutory employment rights, holiday entitlement, parental rights, working time, discrimination, whistleblowing, dismissal, redundancy, and health and safety at work
• In the UK, the practice of veterinary medicine is governed by the Veterinary Surgeons Act 1966. It defines who is allowed to call themselves a veterinary surgeon and carry out acts of veterinary surgery, which universities can award veterinary degrees and the reasons a vet may be removed from the register. The Veterinary Surgeons Act also has a number of “Schedules” – sections which give more detail about how an Act of Parliament is put into place. The best known of these is “Schedule 3”, which sets out rules about non-vets who may provide treatments to animals, including procedures carried out by Registered Veterinary Nurses and students

The impact of economics

Economics is the study of the production, distribution and consumption of goods and services. It is usually divided into macroeconomics (the behaviour of a whole economy) and microeconomics (behaviour of individuals and individual businesses).

Global, national, regional and local economic issues can impact veterinary organisations in a number of ways. For example, inflation rates, unemployment rates, economic growth, competition and the cost of living will all impact people’s spending and borrowing habits – whether your clients or your employees. Interest and exchange rates affect how financially secure people feel – in terms of the availability and attitude towards spending disposable income, and the value of savings and pension funds. In an increasingly globalised world, exchange rates can affect key trading partners and the level of international competition.

Some economic questions to ask for this section:

• How stable is the current economy? Is it growing, shrinking or stagnating, and what is the current inflation rate?
• If you have overseas suppliers: are exchange rates stable or varying?
• Are clients’ levels of disposable income rising or falling?
• What is the current rate of unemployment? How easy is it to recruit or build a skilled workforce?
• Do clients or businesses have (easy) access to credit?
• How is globalisation affecting your economic environment?

There are plenty of economists and financial journalists sharing their expertise and responses to real-time news in easy-to-digest format – try Peter Komolafe’s conversationofmoney, The Accountancy People or Martin Lewis’s MoneySavingExpert channels on YouTube, or relevant episodes of the BBC podcast More or Less with Tim Harford.

What to take away

Using the template from part one of this series, review these areas in relation to your practice. What might the impacts be, whether positive or negative? What are the potential opportunities or threats? What actions could you take as a result?

In part three, we’ll look at the last three factors – social, technological and environmental – to build a full picture of the external landscape affecting how a practice works, and how to respond.