Design budgets will be cut as consumers reduce spending

In response to last week’s Voxpop (DW 18 October), which asked: what implications are there for design consultancy businesses as a result of the measures announced in the Chancellor’s Pre-Budget Report and Comprehensive Spending Review, I would say the following: the Chancellor provided implicit confirmation that consumer spending is likely to decline as money becomes more scarce and taxes on the consumer rise (air travel, Council Tax and so on) so budgets for redesign projects are likely to be deferred or curtailed. But digital design could benefit as retail clients search for less costly and more effective ways to interact with customers.

Design consultancy owners looking for a buyer next year face two threats: the deterioration of the currently favourable capital gains tax regime and a decline in acquirers’ readiness to pay ‘top dollar’ prices as available capital and the potential return on investments decline.

Bob Willott, Editor, Marketing Services Financial Intelligence, by e-mail