Looming public spending crisis for Big Four

Ian Powell, chairman and senior partner, PwC

Big Four firms may be performing well to maintain flat revenue growth,
experts believe, but there is a looming problem if public spending is
substantially reduced as a result of a Tory government taking power next year.

The warning comes in the wake of PwC results this week which showed the
firm’s headline revenues had increased by only 0.5% year on year to £2.25bn.

Kevin Wheeler, a consultant to professional service firms at Wheeler
Associates, said: “They will be OK. there’s a lot of work to be done when times
are hard. In a recession if you are operating at the top end you are advising
government and Blue Chip porganisations.”

But he added: “The smoking gun is the public sector. Under a new government
there’s going to be such a squeeze on public sector spending.”

Last year in Accountancy Age Wheeler speculated that Deloitte may have
overhauled PwC for the number one spot in the UK in terms of reputation.
However, in August Deloitte recorded a drop in revenues of 2%, a steeper decline
than that faced by PwC.

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