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Budget DBA

DBA warns of extra scrutiny for client budgets following budget

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By The Drum Team, Editorial

June 22, 2010 | 2 min read

The Design Business Association (DBA) has called on design companies to be more vigilant in their operations with design budgets likely to come under more pressure following today’s emergency budget from Chancellor George Osborne.

Adam Fennelow, development director for the DBA warned of the impact that will be felt by design consultancies following the budget, which will include a rise in VAT next year to 20%, which is likely to have an effect on private sector budgets, as will the cuts being made within the public sector.

“Although there are good things within this budget for small businesses, what they have to make sure is that those businesses are properly run to be able to withstand the effects that it’s going to have on the design buyers. From our point of view we think that it’s imperative for design companies to be run professionally and to promote themselves to the right audience,” said Fennelow.

He added that budgets and results are also likely to be more closely scrutinized by clients, with agencies likely to come under more pressure to prove their worth and show the impact that creative investment has had for clients.

“Client’s are trying to use the money that they have more effectively. They are wanting design companies to prove their work is effective, which is where case studies come into play where design companies will need to prove their worth and their impact on the bottom line as companies look to mitigate the risk that they are taking by buying creative services by really scrutinising the design companies they take on,” concluded Fennelow.

He also highlighted the reduction in the threshold for National Insurance payments, along with reduction in corporation tax and small business tax as benefits for the industry.

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