Businesses fear costs will bounce back – KPMG
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Poll by professional services firm finds most finance managers are worried the costs they cut during the recession will spring back up
Finance managers at the majority of UK businesses are fearful that the most of the cost they cut during the recession will soon bounce bank, according to a poll by KPMG.
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The professional services firm says the majority of respondents are 'concerned' that as much as 95% of the cost reductions they made will evaporate. It extrapolates this to a £90 billion 'bill' for the UK economy.
Around four in ten (38%) UK businesses believe that what KPMG dubs the 'cost boomerang' will outweigh savings made during the recession.
Companies in continental Europe have similar concerns, KPMG found – just 6.5% of German business, and 6.6% of Spanish firms, felt they could sustain the cost reductions they had made. But in the UK, that proportion was just 5% – the lowest among the countries surveyed.
All this means that many businesses still need to find strategic and sustainable ways to reduce operational costs, KPMG says. It found that 86% of UK respondents are "considering or planning significant changes to their cost base in line with future growth strategies".
