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Tue 28 Feb 2012
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Public spending cuts impacting on private businesses
Tue 24 Aug 2010
Many private sector organisations are struggling amid the current cuts in public spending, experts have warned.
According to accountancy firm Wilkins Kennedy, a growing number of firms with public sector contracts are becoming insolvent, the Guardian reports.
Indeed, it noted that a "wide range" of businesses have collapsed because of delayed contracts.
Anthony Cork, a director at Wilkins Kennedy, said the number of insolvencies among public sector suppliers has risen by nearly 50 per cent during the year to date.
This, he said, is despite the fact that the "real cost-cutting" promised by the coalition government has yet to occur.
Mr Cork added that the delay by public sector bodies regarding spending decisions, rather than actual cuts in expenditure, is partly behind this trend.
James Oxley, a solicitor at Winckworth Sherwood, commented: "The news from politicians and economic gurus that the UK economy is emerging from recession holds little comfort for the businesses which are now feeling the brunt of the public sector spending cuts.
"The public sector cost-cutting exercise is bound to have a knock-on effect on many already struggling businesses and will mean the road to recovery is no less perilous than it has been recently for many of those businesses."
This comes after chief secretary to the Treasury Danny Alexander said the government plans to "totally rethink" how the state spends taxpayers' money.
He stated that the upcoming Spending Review would completely reevaluate the government's role in providing public services in the UK.
