Halved fee growth seen as omen

Jul 2 2008 by Peter McCusker, The Journal

FEE income growth has slowed to half of last year’s, according to Accountancy magazine’s annual survey of the 60 top UK firms.

Widespread fears that the economic downturn caused by the credit crunch is beginning to bite is illustrated in the survey, which shows fee growth of 6.4% in the past year, down from 13.8% in the previous 12 months.

Accountancy editor Sally Percy said: “Even after a couple of years of strong fee income growth, this year’s figures would usually be seen as a good result if it weren’t for the fact that nerves are jangling over the state of the economy.

“This may be taken as an omen of things to come.”

The Top 60 survey shows Deloitte to be the big four star performer, reporting a rise in fee income of 15.7% to £1.8bn.

Senior partner John Connolly said its performance reflected strong markets over the previous 12 months, and that “credit availability and confidence generally has been affected.

“Undoubtedly we will have a more cautious environment going forward, with particular impact on some parts of the merger and acquisitions market.”

It is not all bad news for accountants, though, as extra work in corporate recovery departments will help offset the lack of business elsewhere.

The league table shows PwC retaining its crown, with £2.1bn fee income, up 6.1%.