THE ISSUE: Don't spoil the party say small firms

Nov 3 2009 by Jez Davison, Evening Gazette

EMPLOYERS have been urged not to cancel office parties this Christmas because of the devastating effect it could have on small firms.

A group representing leisure and entertainment businesses launched a campaign warning that they faced bankruptcy unless festive celebrations went ahead despite the recession.

Led by the Forum of Private Business (FPB), the group warned that although the Christmas party market is worth £1bn, hundreds of small firms including florists, chefs and entertainers could go bust if Christmas parties are cancelled.

Figures from an events company in London showed that one in five businesses have cancelled their Christmas party and one half are undecided - meaning the events industry supply chain already stands to lose an estimated £350m-£500m.

The FPB said Christmas parties were a valuable way of saying thank you to employees for their hard work during what is officially the longest recession since records began.

Output fell by a worse-than-expected 0.4% in the three months to September - a record sixth consecutive quarter of decline.

GDP has now slumped 5.9% since the onset of recession - almost as bad as the 6% slump seen in the early 1980s, according to the Office for National Statistics.

The lingering decline comes despite interest rates at a record low of 0.5% since March, additional Government spending and an unprecedented £175bn boost to the money supply through quantitative easing.

THE REACTION:

STEVE GUEST, managing director of Techconsult UK at Wilton, can see the benefits and pitfalls of hosting a festive bash.

“From a morale perspective it’s good but some managers might see the benefits of saving a few pounds - especially if they’ve made redundancies and don’t want to appear insensitive.”

DIANA KAYE ALLAN, owner of Diana Kaye Florist in Yarm, has seen a slight drop-off in forward orders for Christmas-related events.

“We’ve yet to receive notification from one or two companies that in previous years we would have had by now.”

But LISA HIGGINS, event management specialist and partner at Middlesbrough PR firm We Do Marketing, said she had seen no evidence of bosses canceling their Christmas parties.

DAVE NICHOLSON, managing director of Billingham-based Nicholson’s Transport, says some bosses may decide to reward staff in other ways such as a cash bonus.

“Why spend money on a Christmas do when some people are not getting pay rises?”