Public sector cuts have become the biggest threat facing entrepreneurs in the north according to a new survey by accountancy group and corporate recovery specialist RSM Tenon.
Willie Duncan, corporate recovery director at RSM Tenon’s Sheffield office, says almost one in five northern entrepreneurs see the cuts as the biggest threat and that highlights how the Government’s comprehensive spending review is beginning to reach all parts of the UK economy.
“Directly or indirectly, public sector cuts affect almost everybody,” said Mr Duncan. “Many firms who supply publicly-funded bodies are losing contracts and the problem is that SMEs do not have the size or cash reserves to support the major cost-cutting initiatives that many blue chip corporations can struggle though.
“Also, redundancies in the public sector create uncertainty which has a dampening effect on overall consumer confidence.
“We can see evidence of this from the recent spate of announcements concerning retailers who are restructuring or facing formal insolvency.”