News

August 24, 2012

Also in the news this week - 24 August 2012

Small firms pay £2.3bn a year in bank charges and fees

While criticism of banks for failing to meet small businesses' lending requirements continues, a report published by business-to-business financial services provider CashFlows puts the total banks receive from business banking transaction charges and fees at an estimated £2.3bn a year. CashFlows chairman and CEO Nick Ogden said: "There's widespread demand for a change in the way businesses are served by the existing financial services industry. Our research clearly demonstrates that there is a considerable gap in the business banking services currently being delivered by British banks and the services that customers actually require. There is a real need to simplify and reduce fees and charges to give businesses transparency and competitive choices."

Business insolvencies fall during July

During July, 1,776 companies (0.09% of the business population) failed, compared to 1,962 companies (0.10%) in July 2011, according to the Experian Business Insolvency Index. Although the biggest improvement came from the UK's largest firms (more than 501 employees), falling from 0.15% last July to 0.08% this year, there was good news on smaller firms with 11 to 25 employees, falling from 0.26% in July 2011 to 0.19% in July this year. Max Firth, managing director of Experian Business Information Services UK&I said: "Since March this year, when the insolvency rate peaked at 0.11 per cent, it has remained fairly stable — between 0.08 per cent and 0.09 per cent. The lack of any real increase is welcome and this picture is unlikely to change in the near future."

Curb employees' use of social media to boost productivity

According to employment law specialist Bibby Consulting & Support, employee distractions caused by social media is still a major problem for businesses large and small. It estimates that a firm with 100 staff could lose more 16 working hours every day if each person checks texts and Facebook posts for just 10 minutes. With the growth of social media "apps" for mobile devices, distractions for employees have reached new highs. Bibby Consulting & Support's managing director, Michael Slade, recommends that all employers introduce a social media and IT policy. He said: "Businesses need to get tough by implementing a strict policy. Having a comprehensive set of rules will help staff remain focused and this will drive up productivity."

Poor internet coverage hinders rural businesses

More than half (57%) of small firms in the UK are affected by poor internet access which affects their ability to operate effectively. That's the alarming conclusion of a survey published by online outsourcing marketplace Freelancer.co.uk. Some 65% of those who replied believed that there is still a rural and urban divide when it comes to internet services, with many rural businesses unable to take advantage of new business opportunities offered by the internet. Recently, the government announced plans to equip 90% of the UK with superfast broadband, but John Walker, national chairman of the Federation of Small Businesses, said: "Speed is important, but the most important factor is the reach of that coverage. With six in 10 rural firms suffering because of slow broadband, we need the vast majority of the country equipped with superfast broadband."