Scottish businesses are continuing to struggle with growing numbers showing signs of financial distress.
Latest research from the Begbies Traynor Red Flag Alert show there were 30,435 businesses in Scotland in "significant" financial distress in the second quarter of this year, meaning they have suffered a deterioration in key measures such as working capital, contingent liabilities, retained profit and net worth. That was an increase of more than 46% from the same period a year earlier and was almost 9% higher since the first quarter of this year.
The annual increase in Scotland was markedly higher than the UK average which showed a rise of 37%, while the quarter-on-quarter level was closer to the national figure of an 8.6% rise. Across the UK, almost 602,000 businesses were suffering "significant" distress in the second quarter.
Looking at more advanced or "critical" distress, there was an increase of nearly 41% in Scotland when compared to a year earlier with an additional 2,031 businesses affected. However, the country saw a fall in critical distress of 1.7% since the previous quarter, while in the UK as a whole it rose by 1.1% quarter-on-quarter and by nearly 35% year-on-year.
"Despite some encouraging signs of a return to growth in the UK economy, such as the slight rise in GDP in May, there’s no doubt that over the last few years businesses have battled a deluge of challenges and, unfortunately, their cumulative effect is continuing to be felt, particularly by SMEs, with early-stage financial distress once again on the rise," said Ken Pattullo, managing partner for Begbies Traynor in Scotland.
In Scotland none of the 22 business sectors analysed saw a fall and only one experienced less than double-digit growth in financial distress when measured year-on-year. in the second quarter of this year compared with the same period the previous year. Significant distress in utilities increased by just 2.7%, while the greatest increases were in health and education (up 68.8%); bars and restaurants (up 64.6%); retail (up 64.5%); and food and drug retail (up 60.8%).
“With the UK election now firmly behind us, many businesses are hoping for a more stable environment in which to consolidate and plan for future growth," Mr Pattullo added. "However, after seismic events from Brexit to Covid, plus further elections around the world and ongoing global conflict, the future is far from certain."
BT fined £17.5m after service outage sees 14,000 emergency calls unable to connect
BT has been fined £17.5 million after a network failure meant nearly 14,000 emergency calls were unable to made.
The company connects 999 and 112 calls in the UK and provides relay services for deaf and speech-impaired people. During the incident on June 25, 2023, nearly 14,000 call attempts from 12,392 different callers were unsuccessful, though there were no reports of serious harm as a result.
Read the full story here.
Unions to announce decision on bin strikes in Scotland
Two trade unions are expected to announce today whether or not their members in waste disposal will accept a new pay deal.
More than half of Scotland's council areas could face strike action in a dispute over pay, recalling the summer of 2022. Two years ago strikes took place in 18 of the 32 council areas, with the streets of Glasgow and Edinburgh overflowing with litter.
Unison, the biggest union representing waste and recycling workers, have already rejected a new offer from Cosla while GMB and Unite took the weekend to consider the offer.
Read the full story here.
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