Bernard Ginns: Tell it like it is and public may give 'permission' for cuts

HERE'S a quandary. Imagine you are the managing director of a company. It has a lot of borrowings, agreed when credit was easy.

Trading is challenging, of course it is, but business is holding up, because you work hard and you have a good team and customers want your products and services.

But deep down you are worried about meeting the debt repayments and you know that these are crippling your ability to invest in new products and services. In your mind, this puts a question mark over the future sustainability of the business.

Hide Ad
Hide Ad

This question gnaws at you because you know it is probably the biggest challenge that you and your company have ever faced. Costs need to come down, sure, but the shape and size of the business need fundamental change.

You dwell on this. Then, in the middle of one night, the solution comes to you. It will solve most of your problems, but there is one snag. You know it is likely to cause huge upheaval among your workforce.

The quandary is this. At what point do you tell your staff? The timing of internal communications is vital. Some prefer to be totally up front about the direction of the business with the view that it will be easier to take people with them if they feel fully engaged.

But others believe it is more important to keep a total shutdown on any confidential information for fear of unsettling workers. There can also be regulatory issues that hinder disclosure.

Hide Ad
Hide Ad

In reality, some sort of compromise is usually the best way forward. You need to strike the right balance between keeping employees happy and the long-term interests of the company.

This question of timing arose yesterday when I was reading some research on the Government's spending review consultation. The research, by PricewaterhouseCoopers, found a lack of awareness among the general public about the extent of the problem facing public spending.

In some ways, the Government faces the same challenge as the imaginary business in my example. Yes, there has been a lot of rhetoric about the need to cut, but detail is still very vague and will likely remain so until the findings of the spending review is published this October.

Roger Marsh, a partner at PwC, said: "The public is hungry for knowledge on the deficit but current communications around the fiscal consolidation have yet to hit the mark. The better the available information, the more likely that 'permission' will be given by the public to Government to make the hard choices necessary."

Hide Ad
Hide Ad

The research revealed that opinions changed on where cuts should be made after respondents were given more information; in fact, they concluded that no area should be considered a sacred cow and ring-fenced from cuts.

According to Mr Marsh, engaging and educating the public was a crucial ingredient of the successful deficit-cutting exercises by the Swedish and Canadian governments.

If Britons are not given more information, they will not understand the problems and if they don't understand the problems, they are less likely to accept the solutions, which should concern us all. It would be nice if the Government could treat us like grown-ups.

On October 14, The Queens Hotel will play host to the North of England's top business awards dinner, which is being addressed this year by the Chancellor of the Exchequer.

Hide Ad
Hide Ad

As keynote speaker at the Yorkshire Post Excellence in Business Awards, George Osborne is expected to talk about his plans to improve Britain's economic fortunes.

The impressionist Jon Culshaw, our master of ceremonies, will bring some light relief with his acclaimed impressions of public figures from national and international life.

But the real stars of the show will be the shortlisted companies. My colleagues and I at the Yorkshire Post have been impressed with the quality on show among this year's entries across the range of categories.

This demonstrates the fact that, in spite of the challenges of the recessionary environment, Yorkshire is home to some excellent businesses.

Hide Ad
Hide Ad

We expect to publish the shortlist next month. Keep an eye on the paper and the website for details.

Meanwhile, tickets can be bought from the Editor's Secretary, Jayne Lownsbrough. Contact jayne.lownsbrough@ ypn.co.uk or phone 0113 238 8432.