It’s not exactly news that the charity and not-for-profit sectors are facing stresses and strains at the moment. Even before the Oxfam scandal broke earlier this year, charities were facing challenges; raising income; and maintaining their support base. The reasons for this are many-fold, but a major factor is a rise in the number of charities combined with reductions in public and government funding.
The government has today announced that corporate governance reforms are on their way. In fact, these reforms have been announced by a Kent MP, Kelly Tolhurst, who was recently appointed as a parliamentary undersecretary with responsibility for small business affairs and insolvency.
The high-profile collapse of Carillion is a timely reminder that financial failure can affect businesses in all sorts of ways. The ‘domino effect’, where the collapse of one company pulls down others, is a real phenomenon. Some businesses concentrate all of their risk management on the creditworthiness of their customers and fail to appreciate the potential impact of supply chain failure.
As many will be aware, the wage increase from The National Living Wage (NLW) announced in the Chancellor’s Summer Budget came into force this April. This brought into effect a £7.20 per hour (£9.15 in London) minimum wage for employees aged over 25. The NLW is also expected to rise over the coming years, exceeding £9 per hour by April 2020.
Andrew Tate, Kreston Reeves Restructuring Partner is Vice President of the insolvency Trade Body R3, soon to be President, and was asked to comment on BHS filing for administration as their last-ditch rescue talks fail.