Clifton Asset Management

SMES FORCED INTO JOB CUTS AS BANKS RETURN TO PROFIT

Cash-starved owner-managers are seeing little by way of “green shoots”, according to Clifton Asset Management

More than a third of UK SMEs have been forced to make job cuts in the last six months, it has emerged.

Research carried out by Clifton Asset Management (CAM), which provides specialist financial and strategic advice to SMEs, also reveals that up to a quarter fear they may be forced to make even more people redundant by the end of the year.

Meanwhile UK big banks are once again starting to post big profit results, with media reports that a culture of super-inflated salaries and bonuses is once again rife among the banking community.

The CAM survey showed that 34 per cent of small business owners admitted they had been forced to shed jobs in the last six months, with a further 14 per cent saying they definitely would have to reduce their payroll by the end of the year and 11 per cent saying they might have to make cuts.

“We spoke to over 1,000 small business owners to gauge what impact the recession is having on them and what their biggest hurdles are as they fight to survive,” said Neil Greenaway, managing director of Clifton Asset Management.

“We keep hearing about these so-called ‘green shoots‘ of recovery, especially when it is reported that the banks are once again making profits, but our research reveals that further down the line our small businesses are still feeling the pain,” he added.

“At Clifton Asset Management we speak to hundreds of business owner-managers every month and the overwhelming majority are seeking alternative funding streams because the banks have either cut their overdrafts at a moment‘s notice or refused them any more cash.

“Until the government steps in and forces banks to loan to small businesses again I am afraid we are going to see an awful lot more job cuts.”

Last month official figures from the Office for National Statistics revealed that UK-wide unemployment had jumped by 220,000 in the three months leading up to June to 2.435 million – the highest level since 1995.

“Even though we may be seeing signs that the recession is coming to an end I‘m afraid the knock-on effects of the economic downturn to UK small businesses is going to be felt for many months to come,” said Mr Greenaway.

“It must be particularly galling for those business owner-managers out there who are having to explain to staff why they are letting them go, while at the same time watching in disbelief as the very banks who are refusing to lend them any more cash to get through the hard times are once again raking in the profits and paying their own executives huge salaries and bonuses.”

ENDS 8th September 2009

For further information please contact Louie Hadley, Sturgess Van Damme, on 01275 349011 or email louie@sturgessvandamme.co.uk