It was reported today that Connaught is likely to be the latest victim of the spending cuts, being brought in by the new UK government as they try to cut the huge deficit that the country is in, which is likely to lead to the loss of 10,000 jobs. Yes 10,000 jobs, that’s a hell of a lot of people who are going to end up unemployed and a real sign that we’re heading into a double dip recession.
Connaught is a FTSE 250 company and provides a whole range of services which include social housing, property management for the public sector as well as waste management and cleaning. Over the last few months Connaught has got into difficulties following public sector spending cuts, which have affected 31 of its social housing contracts leading to a fall in revenue this year by £80 million. There has also been the difficulty in securing extra funding from creditors to cover their debts of £220 million to the point where their shares have now been suspended and it’s expected that KPMG are being appointed as the administrators.
More frequently over the last few months there have been news reports of spending cuts and job losses as the cuts ripple across the country. There may be spending cuts in government departments but the affects of these spread a lot further, as what were once secure public sector contracts get pulled overnight, many without any notice or warning leading to more job losses.
We all know that the country and the world is in a dire situation following on from the banking crisis a few years ago but I totally feel that the UK government are tacking the issue far too fast and by pulling so much money out of the economy too quickly is going to end us up in an even worse situation. As the economy becomes more unstable, and people start to lose their jobs, this again has a deeper consequence to the overall growth of the country leading to another recession. So far Bronco has been very lucky through the last recession as we have benefitted from clients leaving larger agencies to find a more effective and tailored product, as well as people wanting to really make a go of it online, and we can only hope that if we do get a double dip recession we can continue to growth and maintain our stability. I feel so sorry for all the people out there who are losing their jobs as it must be totally devastating, so I’m very pleased that we work for ourselves and in a way have control over the stability of our future and our staffs’ future.