‘Quick fixes’ to cost Scots firms £4 billion

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UNDERLYING uncertainty in the strength of the economy this year will see Scottish businesses spend up to £4 billion on short-term “fixes”, such as employing temporary staff instead of committing to additional capital expenditure and personnel investment, a report published today has revealed.

Almost three quarters (72 per cent) of Scottish business leaders now feel less optimistic about 2013 then they did in 2012, according to the Volkswagen Caddy However Big Your Ambition survey of 1,000 owners of small and medium-sized enterprises (SMEs).

Worries about company performance meant that 35 per cent said they would rather spend money on temporary personnel than commit to taking on more staff on a permanent basis.

With temporary staff costing, on average, 40 per cent more than full-time personnel, the report estimates that combined spend on salaries by SMEs could be up to £690 million higher than necessary this year. The findings also reveal that firms will spend £2.2bn on hiring equipment, rather than commit to additional capital expenditure.