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Small contractors ''could still fail''
Falling numbers of small company contractors going out of business does not necessarily mean that the economy - and business - will be safe from further failings.Instead, Contractor UK warned that it could still be a difficult time for some firms as there are still many public contracts which will be cut.
According to Keith Stevens, insolvency partner at Wilkins Kennedy, the public sector cuts will hurt, even though the economy is moving out of recession.
He explained that the expected rise in interest rates will come as a double blow to some companies in combination with lost business, which could result in more insolvencies as smaller firms are less likely to cope as they cannot deflect budgetary measures as easily as larger oprganisations.
"It certainly appears more difficult for these [smaller] companies to enter into a Time To Pay agreement with Her Majesty's Revenue and Customs and even other creditors," Mr Stevens added.
A downturn has already been felt in the sector, with the Recruitment and Employment Confederation's October 2010 report on jobs noting a slow-down on staff placements.
By Edel Quinn
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