Cuts Watch #217: Public sector suppliers
Increasing numbers of public sector suppliers are facing insolvency as a result of spending cuts.Research published by Wilkins Kennedy suggests that insolvencies for public sector suppliers have increased by 47 per cent in the past 12 months. Their study shows that in the first six months of 2010, 168 businesses in health and social services, education and the defence sectors went bust, compared with 114 in the same period in 2009.
Private sector companies have already felt the direct impact of spending cuts, with firms including Capita, Connaught and Cable and Wireless affected and recent reports suggesting that the construction sector is being hit particularly hard. Today’s research shows that businesses are not only facing falling profits, but real risks of closure – for example, this morning the British Urban Regeneration Association announced that it has placed itself into voluntary liquidation as its business model (which is based on providing a range of training and consultancy to the regeneration sector) is no longer viable.