Tag Archive | "banking"

A ringing endorsement from some politician called Dave

I really must think about writing these jottings earlier in the week. I routinely find myself talking about things that have just happened rather than predicting what’s about to happen. Although, of course, that does mean I can be a little more accurate in what I’m saying. Better late than never I suppose…

But this week’s major news in contractor world was PCG’s third National Freelancer Day, which as we all know is held on November 23rd. This is an event that celebrates the role of the freelance worker in today’s economy and is primarily aimed at ensuring the value they bring to the UK is recognised.

The event is going from strength to strength, with ever increasing participation. It was picked up in a wide range of places, including the Twitterverse and a host of freelancer websites. More importantly it not only the mainstream press but we even got a mention from Evan Davies on Radio 4 and a ringing endorsement of the freelance profession from some politician called Dave, who said “This Government recognises the valuable contribution that freelancers make to the economy and, as more and more people choose to join your ranks, you have all our support”. He’ll go far, that lad, you just watch.

So PCG are to be congratulated on a job well done. Again.

Elsewhere though, things are giving off mixed messages. There has been a lot hand-wringing about rate cuts and job losses affecting contractors. Which is quite worrying, with all this fear of double-dips (still think that sounds like an ice cream) until, that is, you look a little more closely.

These cuts are only happening in banking and finance. Other people aren’t seeing cuts in rate – I know I’m not, if a sample of one is useful – and others are actually saying they’ve got a raise in rate. There are plenty of reported contract extensions out there as well. Just not in banking. How odd.

Another point, if you are of a suspicious mind like me, is that all the banks are cutting by the same rate, a precise 10%. Nice round number, of course, but it is just a little odd that they all see the need to make the same cut regardless of how well or how absolutely dreadfully they are faring. One might even think they were working to the same hymn sheet. Surely not: they are, after all, in competition for the best resources and paying a shade more than the competition is one way to secure them.

But hey, these are banks, after all. It’s not like we expect them to understand economics or anything. So it must just be a fluke of timing and cost accountancy.

Ah but, it’s also interesting to note the response of the guys being hit by these cuts. The proportion that react with “That’s it, I’ll go somewhere else” to those whose reaction is “90% of something is better than 100% of nothing so I’m staying” has reversed totally, with the latter group now prevailing. Mostly that’s because the feel there aren’t the jobs out there to be had, which is understandable. And in fact they’re probably right; the vacancies created by the macho “I’m outa here” brigade don’t exist so there is nowhere to go. Rather than a big round robin with the worst performers falling off the bottom, as happened last time around, everyone has stayed on their chairs. And that, if you’re the banks, is actually something of a result; keep the same staff, no retraining needed, and 10% of quite a lot of money to feed into the bonus pot.

OK, so perhaps the banks aren’t all that stupid after all.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Facing My Manga by Rob Boudon

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Barclays receives 251,563 complaints in six months!

Contractor accountants who bank with Barclays may want to think about switching their accounts after news that the high street bank received one complaint per minute in the first six months of this year.

According to data from the FSA, Barclays received 251,563 complaints and in over 50% of cases they admitted that they were in the wrong. Lloyds TSB came second on the gripe list, with 181,907 complaints whilst Spanish owned Santander came third with 168,888.

Barclays was the worst bank for complaints last year and although it claims to have made progress, that does not seem to be reflected in these latest statistics. Every day, almost 1,390 customers either wrote letters or phoned to complain about Barclays’ products from January to June this year.

At the other end of the scale, the Royal Bank of Scotland received 68,331 complaints and HSBC – 76,188.
While businesses are depositing more money in UK banks, the meagre interest they earn on their deposits is being eroded by inflation to such an extent that they are losing over £10 billion a year.

In July 2001, deposits from private businesses in the UK totalled £136 billion. In July this year, the figure reached £242 billion and that excludes companies in the financial sector. However, data from the Bank of England shows that £37.7 billion of that money is deposited in business accounts that yield 0% interest.

UHY Hacker Young explained that banks have been trying to improve their lending margins and this has led to them offering very low rates on business cash deposits. Derek Young, a partner at the firm, said that if it wasn’t for the current economic uncertainty, a lot of businesses would be better off investing the money back into the business or distributing it among shareholders rather than building up a cash cushion.

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Small businesses lose faith in the UK’s banks

Britain’s sole traders and contractor accountants have lost faith in the country’s banking system, according to the Forum of Private Business.

The FPB is now calling on the government to introduce new measures to restore smaller enterprises’ trust in banks.

The British Bankers’ Association recently published research showing that about 670,000 UK firms have needed funding in the past 12 months but did not submit an application for it. 18% of companies believe they will require finance within the next three months but say they will not be able to apply unless there is a significant improvement in the country’s economic conditions.

The FPB’s senior policy adviser, Alex Jackman, pointed out that the report showed that small businesses have a crisis of confidence when it comes to the banking system in the UK. As well as practical measures to restore confidence, innovative funders must also be allowed to compete in the current bank dominated finance market.

The Bank of England published its Trends in Lending report for May recently and it showed a record decline in the number of approved loans for smaller enterprises. It also stated that the average interest rate payable on small business loans is 4.66%. Two years ago, the rate was 4.29%.

John Walker, the national chairman of the FSB, said that entrepreneurs and limited company contractors should be able to take advantage of healthy competition from the UK’s banks. He pointed out that the 4.8 million small businesses in the UK are the ones that will create jobs and drive the economic recovery, and yet they are getting a worse deal than their larger counterparts.

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Banks must treat small businesses fairly says Oakeshott

Accountants for contractors and other small business owners might be interested to hear that Lord Oakeshott has accused the banks of treating them unfairly.

The former Lib Dem Treasury spokesman pointed out that there are large discrepancies between the interest rates charged on loans to large organisations and those levied on small businesses. Figures from the Bank of England show that big firms pay an average rate of 1.78% on a £20 million loan and yet a smaller loan of £1 million would attract a rate of around 3.69%.

Lord Oakeshott would like to see the government put immediate pressure on the banks to rectify this situation and show that it is serious about helping small businesses lead the economic recovery.

One bank that it trying to do its bit is Spanish based Santander. Last week, the bank announced that it had secured £150 million from the European Investment Bank so that it can provide loans at discounted rates to firms with less than 250 employees. Funds are available immediately for companies requiring a loan of up to 12.5 million Euros over a minimum period of two years.

Santander has already pledged to increase lending to SMEs by 25% this year. The bank is increasing overall lending by £6.7 billion and £4 billion has been set aside for small and medium sized enterprises.

115,000 SMEs in Europe benefited from funding from the EIB last year and 30 billion Euros have been lent to European SMEs over the last three years, of which 2 billion Euros went to small businesses in the UK.

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24% of employees are seeking out new horizons

The latest ‘Employee Outlook’ survey from the CIPD suggests that UK workers are feeling increasingly insecure about their jobs.

21% of employees now think it is likely that they will be made redundant as a result of the recession, a rise of one percentage point on the previous quarter.

Not surprisingly, the highest level of concern is found in the public sector, with 30% of employees believing they are likely to lose their job. 27% of those in voluntary sector share the same sentiment but only 19% of private sector workers express concern.

Job satisfaction fell five points during the quarter to +34. Employees in the voluntary sector are most satisfied whilst those in the private sector are least satisfied.

The survey also discovered that 24% of respondents were looking for a new position with a new company, up from 19% in the previous quarter.

Research from staffbay.com suggests that figure could be even higher. It claims that since the two consecutive bank holidays, there are now four times the normal level of people looking for new employment.

The founder of the online recruitment platform explained that bank holidays give us the chance to reflect on our career path and back to work blues hit people strongly enough to encourage them to apply for new positions.

However, according to the latest Reed Job index, there was a 2% drop in vacancy numbers last month. Since December 2009, 25% more job opportunities have been created in the private sector and year on year demand is 22% higher.

Demand in banking and leisure and tourism fell back last month whilst customer service, engineering, IT and manufacturing were among the sectors to record an increased job demand.

The bank holidays may have played a part in the drop in demand as UK businesses experienced a disjointed period with the two long weekends, suggested the MD of reed.co.uk, Martin Warnes.

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Taskforce banks to be monitored by external reviewers

External reviewers have been appointed by the Business Finance Taskforce to ensure the Big 5 British banks stick to their promise of a ‘fair, prompt and transparent’ appeals process for companies that are refused loans.

The review team will be led by Professor Russel Griggs and supported by Promontory, a consultancy firm. HM Treasury and the BIS Department have backed the selections.

Companies can see details of the treatment they should receive from the Taskforce banks by checking the website or the site of their own bank.

The chief executive of the BBA, Angela Knight, explained that last October the Business Finance Taskforce agreed to 17 initiatives aimed at supporting UK SMEs. One of these was to set up a monitored process for appeals. The Taskforce banks have agreed a common set of principles for operating individual appeals and these should help businesses receive the support they need to grow.

Phil Orford, the CEO of the FPB, said business owners should not let the banks off the hook; rather they should lodge an appeal as soon as possible if they are denied funding. Otherwise the financial institutions will be able to say that SMEs are satisfied with lending decisions.

Meanwhile, Barclays Bank credit card division has recently acquired the credit card portfolio of MBNA Europe in a move which will expose the high street bank to around £130 million of outstanding debts.

Bob Diamond, the new chief executive of Barclays, has decided that the bank should increase its appetite for risk if it is to meet its profitability targets for the next three years.

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Time to make banking faster?

For the last couple of years, SMEs and contractor accountants have had difficulties accessing finance and the problem still isn’t going away, says Ed Moss from the Manufacturing Institute.

Despite the banks assuring us that they are open for business and ready to help, people still don’t trust them.

Could that situation be about to change? The European Commission recently announced the introduction of a European Union Small Business Act. Included in the policies is an action plan intended to improve access to finance for SMEs’, help them enter the venture capital markets and raise awareness of SMEs potential amongst investors.

One measure that might help small business cash flow is the requirement for public sector organisations to settle their debts within 30 days. The public sector has been criticised for a long time for its tardiness in paying suppliers; many of whom are small enterprises who have been struggling to keep afloat since the start of the recession.

Ed Moss also pointed out that banks could help SMEs if they speed up the cheque clearing system. If you pay a cheque into the bank on Monday, you have to wait until Thursday before it clears. In Sweden and Greece, you pay the cheque in at 10:00 and it’s cleared by 12:00 the same day or the bank is fined.

Moss made his comments after the FPB revealed that over 200 entrepreneurs are supporting the Get Britain Trading campaign designed to promote the contribution small enterprises make to the country’s economy.

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Image: Pequeño tributo a las increíbles fotos de Toni V by Viernest

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