The Centre for Retail Research (CRR) has claimed that 12,000 outlets could close in 2014, an increase of 2,000 over 2013. CRR director Professor Joshua Bamfield blamed the migration to online shopping and the cost of living squeeze. He urged the Government to freeze business rates for two years and link them to turnover to allow newer and smaller retailers to survive. Begbies Traynor warns that 151 retailers are experiencing critical problems and that ten times that many have significant problems.
Last year I said "New local communities will, I think (and hope), continue to be built and residential occupation will mingle with retail on the High Street to change its face and help it compete with the all-pervading internet (so long as they can work out how to deliver parcels!)" and I stick with that as an ongoing prediction.
The latest Business Trends survey from BDO, shows that private sector hiring intentions have hit a 30-month peak, as “buoyant” services and manufacturing sectors point to sustained economic growth. Meanwhile, according to a survey by EY, banks in the UK are becoming much more optimistic than their European counterparts as the British economy starts to improve. However it is still a long haul with a backlog of 'zombie' businesses to be cleared out.
Companies are still hanging on to too much cash but if optimism continues to increase, one would hope to see some of that invested in growth and structure. London is an island of investment but will the British own any of it in 40 years?
More pain and suffering is likely for professional firms, with increasing regulatory burdens, competition and financial pressure with many being overdrawn and over-leveraged.
Law firms will not be alone in their suffering as IPs face fee reviews and pressure as well as the spectre of regulatory reform and more pre-pack consultation... The slightly improving economy may give more room for some actual work for them though!
Fraud and Jackson
The independent research undertaken by Dr Peter Walton commissioned by R3 ansd sponsored by Moon Beever, JLT, Moore Stephens and BDO willl be published shortly, and given that it supports the profession's view of the damage which will be caused by any change to the status quo, renewed efforts to retain the insolvency exemption will commence.
In general areas of litigation, the Jackson reforms are using the stick to force 'efficiency' of lawyers and clients, whilst failing to tackle court inefficiency which causes cost and indicates a failing to appreciate the dynamics of litigation which needs time to work though. Yet again solicitors are being penalised for not having a crystal ball and a magic wand.
Fraud, whilst reportedly reduced against the public sector (changes in measuring), is clearly an increasing threat to the State, as it is to the private sector and also to the country generally in terms of tax rates, a place to do business and a cultural attitude. Government needs to recognise that for the want of a nail, the horse is not only lost it's stolen - and used to commit highway robbery and worse. Also IPs need to promote their abilities to investigate, prevent and disrupt fraud and compensate victims (aka creditors).
All the government has to do to retain and increase the use of insolvency to tackle and prevent fraud is make a short announcement that the insolvency exemption will remain indefinitely.
So 2014 gives mixed messages and mixed outlooks but if we have some growing optimism to build on perhaps 2014 will be the start of something good.
Frances Coulson (email@example.com)
This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information.