Insolvency warning: more practices ‘will go under’
Insolvency practitioners Grant Thornton has warned that it is ‘inevitable’ more practices will go under following the news that Browne Smith Baker (BSB) had gone into administration
The practice, which had offices in Leeds, Hull, Darlington and Newcastle, had a staff of more than 80 just two years ago. That number had fallen to 25 by the time the firm closed last week (Barnard Castle Hub by BSB pictured).
Joe McLean of Grant Thornton, which is handling the administration, said: ‘The practice had reduced in size due to a downturn in workload and people being unable to pay on time. Regrettably, the practice has come to an end and there is no prospect of selling it to another party.
‘This sector has been under the cosh for some time and inevitably there will be more bankruptcies.’
The AJ understands that architects and property professionals now account for 10 per cent of callers to the Business Debtline, making them the largest single group using the service.
Business Debtline says the main topics of concern are trade shortfall, which makes up around 18 per cent of calls, and potential bankruptcy at nearly 12 per cent.
Last month, Austin-Smith: Lord was forced to issue a notice to its 180 staff warning that there would be delays in receiving July’s salary due to late payment by a major client.
A spokesperson for the practice said: ‘Since that time, payments on account of outstanding salaries have been made to staff. Staff have been provided with a schedule showing dates for payment of all outstanding salaries by 7 October. This is a temporary position and there is no suggestion of any salary sacrifice being required.’
‘This is a temporary position and there is no suggestion of any salary sacrifice being required.’
Meanwhile Patrick Theis of Theis and Khan, whose Bateman’s Row was Stirling shortlisted last year (pictured below), confirmed the firm has also downsized. He said: ‘We had accumulated people unnecessarily and have now consolidated.
‘We had our fingers burned by employing staff too readily and the hiccup was taking on two senior people. But we found jobs were not taking off as quickly as we expected.’
He added: ‘We are a small practice and very hands on. Being large doesn’t suit us.’