Are Businesses Feeling the Pinch of Government Cutbacks?
Are small businesses feeling the pinch?
Poppleton & Appleby state that they have seen a rise in the number of businesses contacting them for advice, with one such client reporting that demand has been switched off “like a tap”.
“In the last week alone we have been approached by three companies who have all suffered considerable loss of trade directly because of Government cut backs,” said company partner Martin Coyne, speaking to TheBusinessDesk.
“Two have fallen victim to the decision to cut back on the schools improvement programme both on a national level with the cancellation of the Building Schools for the Future initiative and council improvements to schools on a local level.
“The other firm supplies services into public bodies in Birmingham and has found that demand has literally been turned off like a tap and it has hit it very hard indeed.”
Coyne believes that the trend is set to continue until the Government Spending Review was announced by Chancellor George Osborne in October.
However, according to Insider Media, Enterprise – which serves the public sector – is reportedly “confident” that further growth is attainable, suggesting that the key lies with firms that can diversify and offer a wider range of services.
Chief Executive of Enterprise Neil Kirkby commented that despite the “challenges” brought about by the difficult economic climate, it had also created opportunities for “substantial contracts with long timescales.”
“Following the award of a number of high-value, long-term contracts in the utility division in the second half of 2009, during the first six months of 2010 we mobilised new work with annualised revenues of around ┬ú200m,” said Kirkby.
The deals secured throughout the first half of 2010 include work from Scottish Power, the Highways Agency and Family Mosaic Housing Association. The contracts that they have attained over the last 12 months are worth in excess of ┬ú1bn.
To combat the cuts and to continue driving forward, Kirby claims that their clients are looking to broaden their offering and provide a “more highly integrated” range of services.
Are businesses already finding voids left by a cutback in public sector services – and is this the start of difficult times ahead? Or should firms be concentrating on diversifying their offering and focusing on the opportunities available?