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.
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".