Total fee income for the UK's top 50 accountancy firms has shrunk for the first time since the Accountancy Age Top 50 was launched, suggesting that UK firms are facing their toughest business climate for a decade.
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From last year’s high of £7.4bn, total fee income for the firms has dropped to £7bn – a drop of 6% or £432m – and is the first recorded fall since Accountancy Age began compiling the league table six years ago.
The results, based on information submitted by the firms for Accountancy Age’s annual Top 50 survey, reveal the industry, and particularly thebiggest firms, has not been able to offset the effects of the protracted global economic slowdown, tightening of regulation or the knock-on effects of reputational damage.
The Big Four has suffered the most with its collective fee income tumbling by 9.5%, some £557.7m.
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KPMG CEO John Griffiths Jones said: ‘There’s been a dramatic fall in number of transactions on London stock exchanges directly affecting corporate finance and tax work. This flows all the way down the chain. The market’s not been good for us.’
Mid-tier and smaller firms have proved more resilient, collectively growing by 7.6% and 11% respectively. The largest of the mid-tier firms have also had a tough time this year.
Baker Tilly and PKF had growth rates of only 5% or below. Partly attributable to the fall is the loss of income from consultancy and corporate finance work. But most of the fall can be put at the door of the drop in mergers and acquisitions activity.