Sep
15
2010
Public sector contractors 'face tricky times ahead'
Posted by Daniel Frost
The planned government spending cuts and a vulnerable UK economy could combine to have negative effects on public sector contractors, which could interest those with an umbrella company.
Industry experts have pointed out that, when a recession comes to an end, business failures usually peak, Contractor UK has reported.
This seems to have being backed up by latest figures released by insolvency trade group R3, which stated that the government cuts will lead to a widespread fallout, with contractors working at younger firms particularly at risk.
The results found that a number of businesses will have to consider doing away with expansion plans, while job losses will be experienced by about 14 per cent of businesses.
Stephen Law, president of the trade group, believes that it will be unlikely that all contractors within the public sector will be affected.
However, he explained: "Yet ... businesses need to be aware of this risk and seek professional advice before this reliance on public sector work threatens them."
Chancellor George Osborne made the decision to cut funding for a number of departments back in May, which he said had contributed to £6.2 billion of "wasteful spending", the BBC previously reported.
The planned government spending cuts and a vulnerable UK economy could combine to have negative effects on public sector contractors, which could interest those with an umbrella company.
Industry experts have pointed out that, when a recession comes to an end, business failures usually peak, Contractor UK has reported.
This seems to have being backed up by latest figures released by insolvency trade group R3, which stated that the government cuts will lead to a widespread fallout, with contractors working at younger firms particularly at risk.
The results found that a number of businesses will have to consider doing away with expansion plans, while job losses will be experienced by about 14 per cent of businesses.
Stephen Law, president of the trade group, believes that it will be unlikely that all contractors within the public sector will be affected.
However, he explained: "Yet ... businesses need to be aware of this risk and seek professional advice before this reliance on public sector work threatens them."
Chancellor George Osborne made the decision to cut funding for a number of departments back in May, which he said had contributed to £6.2 billion of "wasteful spending", the BBC previously reported.