Personal Insolvency Epidemic Expected Over Public Sector Job Cuts
According to a research conducted by RSM Tenon, job cuts that are being planned by the public sector may intensify the pressure on the bankruptcy hotspots.
It may also deepen the north-south divide.
RSM’s own personal insolvency hotspot map has identified the regions which has the highest increase in personal insolvency cases and also those which have the largest percentage of public sector workers. Analysis has shown that the areas which have the largest percentage of people working in the public sector are the ones where personal insolvency is the highest.
The biggest growth in personal insolvencies is being noticed in the North-West. It is also the area where a 20% increase in the figure is seen every year.
RSM Tenon has said that if the figure of personal insolvencies is coupled with the 20.8% workers who work for the public sector in that area, the number could just go thought he roof.
RSM Tenon is an audit firm which has been involved in the auditing of several public sector companies.
According to the firm, the East Midlands and the North-East is also in the danger of becoming an insolvency hotspot soon, considering that these are areas where personal insolvency cases are growing by 17% year on year. Job losses could lead to a higher margin of such cases.
RSM’s map has split up the country into 2 parts. It shows that areas in the South have a lesser dependence on public sector jobs, fewer personal insolvencies and lesser annual increases.
Mark Sands, who is Head of Bankruptcy at RSM Tenon said that the spending cuts will “serve as a catalyst for further personal insolvency rises”. He also said there are thousands of people who are living on the brink of bankruptcy at the moment in the North.