By Claire West

The outstanding feature of the forthcoming public sector cuts is their uncertainty. Consequently they are difficult to plan for and businesses can either take predictive action that may absorb the potential impact to their bottom line, or do nothing and hope for the best. The Baker Tilly Outlook 2011 survey conducted by YouGov demonstrates that businesses are combining both.

However, the survey, which gathered opinions from 516 business decision makers, does highlight areas of uncertainty, with only 33% of respondents being confident for their business sector and only 20% having a positive view of the future for their region.

38% of owner / directors anticipate that their companies will experience a reduction in turnover as a result of public sector cuts. However 42% say the cuts will have no effect and a fifth say they do not know whether they will have an effect or not.

59% of owner / directors say that they have no plan to mitigate the risks stemming from public sector cuts.

27% said they did have a plan.

Restructuring and Recovery partner, Bruce Mackay, suggests that companies who are heavily reliant on the public sector for their income should think ahead, as few will be unaffected:

“All businesses in the private sector should think about how the cuts will affect them and what they can do now to soften the blow,” says Mackay.

“For some businesses, the potential impact is obvious — the loss of public sector contracts — yet for others, it is less direct, where levels of activity reduce over time through the knock-on impact across the supply chain. Either way, the effects need to be planned for and preparedness is key.”

Regions most optimistic for their business outlook were in the South East, and more unusually, the North and Scotland, areas traditionally that heavily rely on public sector investment.