I saw this article in Insider magazine and thought it worth sharing.
“Small and medium-sized businesses are owed a record £33.6bn in late payments, according to new research by payment company Bacs.
The amount owed is a rise of 10 per cent in the past 12 months and the highest figure since records began in September 2007. The report said that small companies are owed an average of £39,000 and are waiting up to two months to get paid.
Mike Hutchinson, head of marketing at Bacs, said: “The issue of late payment is continuing to get worse for SMEs in the UK at a time when they need to be able to plan ahead for growth and ensure a strong cashflow.”
Bacs said the worst offenders for late payment are large companies, which are behind 48 per cent of SME late payment debt. The hardest hit sector is retail and distribution which is owed £16.6bn.
The report added that half of all UK small companies are currently experiencing late payments.”
It’s not the Greeks who are affecting the UK economy, but the banks who are not releasing funding to help small companies expand, and bigger companies directly affecting the cashflows of smaller ones. It has a knock on effect all the way down the line, so why isn’t there legislation in place to stop it happening?
Over the last few years, even as the economy has worsened and money gets tighter, one area that hasn’t changed its requirements, and may even have increased, is the number of charities seeking our help and donations. It is unlikely that you can walk down your local high street or through a shopping centre without being harassed by chuggers looking to sign you up to regular donations to a specific charity. I am sure that all are equally deserving, but charity giving should be something about which you are passionate, and therefore a very personal choice. At Managed Recruitment Solutions, we support three charities but at very specific times of the year, and in very specific ways.
September is the month we support the British Heart Foundation; we hold a golf day and the raffle proceeds are matched and donated. At Christmas we support Marie Curie Cancer Care, primarliy through our Christmas cards. In November, we support prostate cancer and testicular cancer initiatives through the growing of unnecessary facial hair.
We don’t ask for donations to any of these causes (although we would never turn any away, and would match any we received pound for pound) but instead pladge a percentage of all invoices raised during the appropriate month to the respective charity.
Recruit someone in these months and, in addition to solving your own staffing issues, you will be doing your bit for these incredibly deserving causes.
As part of our ongoing commitment to our clients, we have entered into a number of strategic alliances with other business service providers in a bid to provide a comprehensive range of business solutions. Our focus remains solely on recruitment, but we are pleased to introduce one of our partners, Icon Business Solutions, and in particular their representative in your local area, Mike Nixon.
Icon Business Solutions offers a different approach to business growth consultancy, and rather than lecturing a business owner on the right of wrong way to do everything, they focus instead on measuring where a business is now, where the owners and leaders want it to be and what steps are needed to secure the required level of success.
That practical approach is reflected in their very first contact with a business, starting with a free Business Health Check. This contains practical advice on ways forward for a business and giving ideas on the ‘headline’ activities necessary to drive greater profitability, work-life balance and efficiency. It’s a useful, no commitment way for both the business and Icon advisors to judge the potential for effective partnership working.
If a business wants to proceed beyond that, and their advisors assess that the levels of growth being targeted are realistic, then a programme is started. Typically lasting between 6 and 12 months, these programmes are again based on practical, proven activities that move the company from the base line at the start through to the milestones of success identified by the company. And this is perhaps a key differential for Icon – their advisors don’t define the targets – the business does.
GDP growth in the UK will be just 1.2 per cent in 2011, according to the Institute of Directors’ latest economic outlook. This is unchanged from the institute’s previous quarterly forecast in November 2010.
In its latest UK economic outlook published today, the Institute of Directors forecasts UK GDP growth will be just 1.2 per cent in 2011.
The IoD lists five economic influences that combined will weaken GDP growth prospects. These factors are falling household real income, a flat savings ratio, upward interest rate expectations, the fiscal squeeze and anaemic broad money supply growth.
A spokesman for the IoD, said: “In 2011-12 we think there is more of a risk to the economy from a mistake in monetary than fiscal policy. Raising interest rates when the money supply is so weak could undermine recovery and risks a double-dip.
“The spending squeeze should proceed as planned and the MPC should avoid raising interest rates. In fact, broad money supply statistics suggest there is a case for an extension in quantitative easing if anaemic monetary growth continues.”
The construction industry jumped to an eight-month high in February, according to the latest Markit/CIPS Purchasing Managers’ Index (PMI). The figures have boosted hopes that the UK economy will return to growth.
The survey of the construction sector, where a reading above 50 indicates growth – has risen from 53.7 in January to 56.5 in February.
There has also been an increase in housebuilding, which declined in the final four months of 2010. Meanwhile, civil engineering work grew at its fastest pace for three years and levels of commercial building work remained strong.
However, the construction sector is still fragile and the sector has been affected by government cuts and low levels of bank lending, the survey revealed.
David Noble, chief executive officer at the CIPS, said: “A weather-beaten UK construction sector is showing signs of repair, with stronger rates of activity and a rise in new business continuing the reversal of fortune since the end of 2010. However, this new phase of recovery is at least in part built on shifting sands.
“The situation is still fragile, however, considering the likely impact of government cuts. Concern about the level of bank lending is also having a negative impact on confidence.”
The Prime Minister David Cameron has outlined a series of reforms aimed at helping small and medium-sized businesses compete for public sector contracts.
Under the new system, entrepreneurs will be able to pitch directly to Whitehall buyers as part of the Government’s efforts to make public procurement more accessible to smaller firms.
The requirement for businesses to complete a pre-qualification questionnaire (PQQ) before bidding for contracts worth less than £100,000 will also be abolished – a move welcomed by many business groups.
In addition, Mr Cameron announced the launch of a new website which enables firms to search for public sector contracts worth more than £10,000. A similar type of website already exists in Scotland and is reported to be a success, with around 50,000 members registered to the site.
‘Too many contracts are signed off behind closed doors with little or no public scrutiny. That can be good for the contractors who can charge over the odds without being properly challenged but it is not good for the taxpayer who is being short changed and denied value for money,’ commented the Prime Minister.
The Federation of Small Businesses (FSB), which has been campaigning for the Government to remove the red tape surrounding public procurement, hailed the decision a ‘victory’ for small enterprises.
‘The FSB is pleased that the Government has recognised that these barriers exist and has committed to making the process simpler,’ it said in a press release. ‘The initiatives, such as the reform of the PQQ process and more transparency through a new contracts website, as well as providing a dedicated voice for small firms’ views to be heard, will mean more small businesses having the potential to access work’.
However Susan Anderson, CBI director for public services, said the plan ‘could be much more radical by opening up all government contracts and public services to a range of innovative and expert providers.’
The Institute of Directors (IoD) added that the changes were ‘long overdue’, but it questioned whether the move would deliver real change. ‘It remains to be seen whether today’s changes will benefit small businesses or whether risk-averse bureaucrats will soldier on with safe choices of big brands,’ said the IoD’s Alexander Ehmann.
British Heart FoundationNational Wear Red Day on Friday 25 February 2011.
The British Heart Foundation is the charity that we support at Managed Recruitment Solutions. We do this in a variety of ways, from our annual golf day in September to our Christmas cards and anything else we fancy getting involved in. 2011 is also their 50th anniversary, which makes everything we do even more special.
Every year, the BHF organises a National Wear Red Day, and this year it takes place on Friday 25th February. You can take part at work, school or at home. Anything goes as long as it’s red, but what really counts is being part of this historic year.
It is only a small sacrifice, and it only needs to be a red tie! If you want further information, follow this link – www.bhf.org.uk/get-involved/fundraising/red-for-heart.aspx
The Government has confirmed that it is proceeding with plans to withdraw the default retirement age later this year, prompting a mixed response from business and employer groups.
Following a period of consultation, the Employment Relations Minister, Edward Davey, told MPs that the Government would be phasing out the DRA between 6 April and 1 October 2011.
During the transitional period, retirements that were already in motion can continue through to completion, provided that:
a notification of retirement is issued by the employer prior to 6 April 2011;
the date of retirement falls before 1 October 2011; and
the requirements of the statutory retirement procedure are met.
Compulsory retirements using the DRA will therefore cease completely on 1 October 2011. However, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it.
While the Government hopes the additional freedom for workers will boost the UK economy, business leaders have expressed concerns over the changes.
The Confederation of British Industry (CBI), which had been lobbying for the plans to be postponed, described the publication of guidance on the removal of the DRA as ‘too little too late’.
‘The Government’s decision to scrap the DRA leaves businesses with a number of difficult practical issues,’ warned the CBI’s Director-General Designate, John Cridland. ‘The impact on employers, especially smaller ones, will be considerable […] Less than three months is not enough time for businesses to put in place new procedures. The outcome will be more unpleasant and costly legal action.’
Its thoughts were echoed by the manufacturing organisation the EEF, which claimed the reforms had been ‘rushed through’ and would make it harder for companies to create jobs, plan staffing needs and would provoke expensive claims.
However Dianah Worman, public policy adviser at the Chartered Institute of Personnel and Development, welcomed the announcement, arguing that the existence of the DRA has acted as a ‘smokescreen’ for poor management.
‘With the clear protection in the legislation of a right for employers to offer an objective justification of a fixed retirement age for occupations where physical capacity is a particular requirement, employers have nothing to fear from this legislation,’ she said.
Merry Christmas and a Happy New Year to all our clients, candidates and those that just enjoying reading the blog. May 2011 bring everything you want (other than higher interest rates………………..)
Presenting his first Autumn Statement as Chancellor of the Exchequer, Chancellor George Osborne has asserted that Britain is ‘on track’ to recover from the deepest recession of post-war times.
The Statement was largely a response to the first Autumn forecast from the independent Office for Budget Responsibility (OBR), created by the Coalition Government earlier this year. Despite issuing a cautionary note on the reliability of forecasts, Mr Osborne went on to argue that the OBR report vindicated the Government’s ‘decisive action’ on the economy.
As widely predicted by economists, the economic growth forecast for 2010 was increased, from 1.2% to 1.8%. However, the estimates for 2011 and 2012 were reduced from 2.3% to 2.1%, and from 2.8% to 2.6% respectively, with the forthcoming increase in VAT – coupled with over £80 billion of spending cuts – expected to slow the pace and result in a period of ‘sluggish growth’. Meanwhile public borrowing forecasts for the current financial year have been revised downwards by £1 billion, and borrowing is expected to fall from £148.5 billion to £18 billion in 2015/16.
Mr Osborne was keen to emphasise the OBR’s view that Britain will not experience a double-dip recession, and that there will instead be a ‘gradual rebalancing’ of the economy, with the Government set to reach its target of eliminating the current structural deficit a year early.
So is that it then? Are we out the other side? Clients are recruiting, candidates are looking for new jobs, and the number of people in jobs looking for jobs has increased as well. Like an early spring after a harsh winter, there are green shoots, but it won’t take much of a harsh frost to see them wither.
