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March: Liquidations on the rise, as is fraud and more redundancies to come

Liquidations soar
Company liquidations in England and Wales increased by 51.6% in the last three
months of 2008 compared with the same time in 2007, and increased by 11.9% on
the previous quarter 2008. The figures from the Insolvency Service also show
that voluntary liquidations more than doubled in the quarter, up by 62.2% in Q4
2008 compared to Q4 2007, while compulsory liquidations rose by 34.4% in that
period. At the end of 2008, 0.7% of UK companies had gone into liquidation,
compared with 0.6% at the end of 2007.

Pensions deficit balloons

Defined benefit occupational pension schemes in the UK’s private sector have
seen a staggering shift from a surplus of £130.4bn, recorded in June 2007, to a
deficit of £194.5bn this January, according to the Office for National
Statistics. Using data from the Pension Protection Fund as well as data obtained
directly from self-administered funds from insurance companies, pension funds
and trusts, the ONS says falling equity markets and bond yields led to the
substantial decrease in the value of fund assets.

Fraud rockets
The judicial system saw fraud cases totalling £1.1bn in losses brought to court
in 2008 ­ its highest level in 13 years ­ according to KPMG’s fraud barometer.
Corporate fraud increased almost five-fold with losses totalling £125m last
year. Frauds caused by managers in all sectors resulted in losses to the value
of £128m, up from £54m in 2007.

Cut time, not staff
Redundancies are not the only cost saving measure when companies look at their
staffing budgets. In the Labour Market Outlook survey for Q1 2009, compiled by
the Chartered Institute of Personnel and Development, in association with KPMG,
it shows incorporating flexible working time, cutting wages, and stopping
bonuses are alternatives to redundancies. It says recruitment freezes are the
most popular method of reducing staffing costs, followed by terminating
temporary or agency worker contracts.

Insurance to grow
The European insurance industry could continue to grow in 2009 despite the
recession, says Ernst & Young. If insurers can take preventative measures,
such as improving operational efficiency and maintaining good customer and
broker service, they should maintain growth in the downturn despite minefields
such as declining asset values, increased hedging costs, and foreign exchange

Across the pond
A study of chief financial officers in US technology companies shows that just
12% say retaining talent is their biggest concern in 2009, compared with about
40% in 2008. According to research from BDO Seidman, the US branch of accounting
firm BDO International, green tech has also fallen off their radars this year.
Just 13% of tech CFOs seeing it as a growth business area for the future.

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