Whenever a well-known business name fails, it’s the human cost of the company’s problems that are the most long-lasting implication of its demise.
For all the media focus on the varying Parliamentary testimonies of Sir Philip Green, Dominic Chappell and several others involved with the travails of BHS, the core fact remains that, unless things take an unexpected turn, around 11,000 people are likely to be losing their jobs when the ongoing administration process is finally resolved.
These jobs are of course spread out right across the UK, but when the problem is concentrated in one area, the impact of an administration can be significantly multiplied.
Around 2,200 jobs were lost in October last year when 98 years of steel production in Redcar came to an end with the close of the town’s SSI steel works.
Not only was the closure a dreadful blow for a relatively small community in itself, but the fact that so many other local companies were part of its supply chain significantly amplified its impact.
Fast forward nine months, and while everything is far from rosy in Redcar, the impact of the concerted effort that went into supporting the area after SSI’s closure, allied to the strong resolve of local people not to give up, has at least borne some fruit.
There has been, perhaps surprisingly given the many prognostications of doom that we hear, a regular flow of positive stories in our regional media about former SSI employees finding new jobs and apprenticeships, or choosing to start up their own company. The recent launch of Lord Heseltine’s report on how he believes jobs and wealth can be created across the Tees Valley area in the future gives hope that this flow will become even stronger in time.
When major insolvencies look likely to happen (and experience, of course, tells that BHS will sadly not be the last household name to suffer this fate), having the right structures in place to both enable IPs to do everything they can to save the business, and to subsequently deliver targeted assistance to those who have lost their jobs if this doesn’t prove possible, is absolutely essential.
There are always lessons to be learned from what has gone before, and the hope is that what has worked for the SSI experience will be translated into practical support for former BHS workers when it is required.
For further information, please contact Neil Harrold, Partner at Hay & Kilner
Call: 0191 232 8345