Troubled economy brings dip in turnover for accountancy giant

Roger Marsh, the senior partner at PwC in Leeds, said the company’s 880-strong team in Yorkshire had won many clients in a highly challenging market place, including UK Asset Resolution (UKAR).

UKAR runs the £80bn of mortgages that were bailed out by the taxpayer during the financial crisis of 2008. Mr Marsh, who has worked at PwC for 35 years, admitted that the economy was in “a bit of a limbo”, adding: “There is optimism, but the confidence is not quite embedded.”

In the year ended June 30 2011, PwC achieved turnover growth of six per cent to £2.46bn.

Average profit per partner for PwC’s UK operation, which includes member firms in the UK, Channel Islands and the Middle East, was £763,000, an increase of 0.5 per cent on the previous year.

PwC does not publish a regional breakdown of its figures.

However, the Yorkshire Post understands that PwC’s Yorkshire operations suffered a drop in full year turnover of around five per cent.

The dip is believed to be partly due to the fact that there were fewer insolvencies in the last financial year. Mr Marsh said PwC had “probably come off a high base in terms of business recovery activity” and there had been fewer “problematic situations where outside help is necessary”.

He added: “Businesses probably have come through the worst and are beginning to be more confident and think beyond the here and now. We have done well in terms of new business across all facets of Yorkshire and the Humber’s economy.”

He said PwC Yorkshire’s operation had enjoyed particular success in education, financial services and healthcare. Mr Marsh said PwC was “facilitating transformation” in the health sector by helping health professionals to use money and resources more effectively.

He added: “In some respects, one size doesn’t fit all. The health needs of Harrogate are very different from the health needs of Bradford.”

PwC hired around 40 graduates and school leavers last year.

Mr Marsh said: “We’re trying to invest ahead of the curve. We should take a sustainable approach to recruiting the leaders of tomorrow.”

Britain’s big four accountancy firms are facing their own audit after a watchdog supported calls for a competition inquiry into the industry.

Deloitte, KPMG, Ernst & Young and PwC were criticised last year by a House of Lords committee over conflicts of interest and the quality of published accounts.

The committee also said the failure of auditors to communicate regularly with regulators ahead of the banking crash of 2008/09 amounted to a “dereliction of duty”. The Office of Fair Trading (OFT) said it had been concerned for some time that the market was highly concentrated, with substantial barriers to entry and switching.

The OFT decided a Competition Commission inquiry was the “appropriate response to our long-standing competition concerns in this market”.

A final decision on whether a probe will take place is expected soon.

The Big Four have said they believe that the audit market is already fiercely competitive.

Mr Marsh said: “We will strongly and comprehensively put forward, together with others in the profession, the position that significant change is not in the best interests of corporate Britain.”

Commenting on the results, Ian Powell, PwC UK Chairman and Senior Partner, said: “I am pleased to report a strong performance in a period of volatile financial markets, fragile economic confidence and the tightening of public expenditure. We continued to stay close to our clients and to invest in the future of our business.

“Despite the challenging environment, our assurance business performed well competitively winning the Aviva, TUI and IG Holdings audits and achieving turnover growth of six per cent to £909m; our advisory business achieved strong turnover growth of eight per cent to £907m, including a 10 per cent increase in revenues for our consulting business, while our tax practice saw a two per cent increase to £645m.”

As UK chairman, Mr Powell is entitled to a profit estimated at £3.7m, up from £3.6m last year.

In the UK, PwC admitted 81 new full equity partners last year, an increase on the 57 appointed the year before.

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