The number of bankruptcies involving private enterprises that rely on public sector contracts has increased considerably in the past year according to the accountancy firm Wilkins Kennedy.
Research by Wilkins Kennedy suggests that insolvencies for public sector suppliers rose by 47 per cent over the past 12 months. This can be compared to the 5 per cent decrease in insolvencies which occurred previously within the same period.
During the first six months of 2010, 168 firms operating within the health, social services, education and defence sectors were liquidated, compared with 114 in the same period in 2009. The health and social care sectors have been hit the worst, with 106 firms collapsing this year.
Anthony Cork, the Director of Wilkins Kennedy said: “While the real cost-cutting that this government has threatened has yet to take place we are already seeing a wide range of companies fail because of delayed contracts.” Mr Cork believes that the October Spending Review will “heap on even more pain”.
Source: Public Finance
http://www.publicfinance.co.uk/news/2010/08/public-sector-supplier-insolvency-grows/
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In W2W we wait pensively to hear further details on the framework and the Work Programme. These decisions will have an immediate affect on the solvency of many organisations in the sector.
Tomorrow I will be posting further thoughts on other threats to the provider base…..
