Kirklees Business News - 10th May 2011

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KIRKLEES BUSINESS NEWS The business NEWSpaper for Kirklees

Distress levels up for region’s firms

NORTHERN businesses are showing greater signs of distress, says a Kirklees insolvency expert – with more firms making pay cuts and reporting cash flow difficulties Figures from insolvency trade body R3 show that 31% of companies in the north of England, including West Yorkshire, have introduced pay cuts compared with 16% in the Midlands and 20% in southern England. Some 31% of firms in the north also owned up to cash flow problems against 19% in the Midlands and 22% in the south. Some 24% of firms in the north used a maximum overdraft facility compared with 13% in the Midlands and 14% in the south. Equally worrying, 26% of companies in the north said they had lost regular customers against 15% for the rest of the country. The survey showed that one in four UK businesses are concerned about their debts – with small businesses being

particularly vulnerable. The biggest concern featured bank loans and other finance debt. Chris Wood, Yorkshire R3 committee member and partner at Clough Corporate Solutions in Cleckheaton, said: “An alarming minority of the business community, particularly in the north, are struggling to address their financial woes. “If these distressed businesses continue along this downward trend they may lose control of their mounting debt, which will push them into insolvency in the coming quarter. “These businesses are allowing their debts to manifest instead of being able to pay them off. “Things aren’t improving for these businesses which is of real concern at a time when monetary and fiscal policy should be benefiting businesses. “These businesses are likely to fall on hard times when interest rates inevitably rise, making it more difficult to service

their debt.” Mr Wood said: “Cash flow difficulties are particularly severe in the north and these, coupled with debt concern, paint a w o r r y i n g p i c t u r e fo r s m a l l businesses. “Results from the barometer in December, 2010, revealed high levels of distress and debt concern. We assume this is due to the adverse weather conditions and expected businesses to have a bleak outlook during those difficult trading conditions. “The fact that some of those results have been compounded or increased this quarter is alarming. Businesses haven’t just hit a bump in the road, but have sustained financial problems. These could be “zombie” businesses that are unviable. When changes to monetary and fiscal policy become less favourable they are likely to go insolvent.”

Organisations including the Lockwood-based Mid Yorkshire Chamber of Commerce argue that high speed rail is vital for the future of the regional economy – by putting businesses in closer touch with the capital and Europe and making Yorkshire more accessible for tourists. The report counters claims that a national high speed rail network will cost each UK household £1,000 in

taxes and the argument that it is “irresponsible” to spend money on a high speed rail system during a recession. It also responds to claims that the business case for the network relies on over-optimistic passenger forecasts and that time spent by commuters in trains is not being wasted when modern technology such as laptops allows commuters to work

Fleets hit by fraud FLEET operators in Kirklees have been warned to steer clear of staged “slam-on” collisions. Dr Will Murray, research director for Bradley-based Interactive Driving Systems, said statistics suggested an increase in this type of fraud, which often targets the drivers of liveried fleet vehicles.

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■ TRENDS: Chris Wood, partner at Clough Corporate Solutions

Employers highlight case for high speed rail link BUSINESS leaders lobbying for a high speed rail link between London and West Yorkshire have launched a report to dispel the “myths” they claim are being put forward by those opposed to the project. The report, entitled 10 Myths: Bringing balance to the debate about high speed rail, has been published by the business-backed Campaign for High Speed Rail.

INSIDE

productively on long journeys. Prof David Begg, director of the Campaign for High Speed rail said: “For too long, the opposition have been allowed to push misleading statistics and bogus exaggerations. “It is time for them to own up to the facts. “The economic case for high-speed rail is strong. This project must go forward.”

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Homing in on Attik ATTIK co-founder James Sommerville is among leading figures in the design and marketing sector who will address a major seminar in Huddersfield later this month.

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Solicitors for business inYorkshire www.chadwicklawrence.co.uk Huddersfield | Wakefield | Halifax | Leeds


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