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North of England hit hardest by insolvencies in UK’s downturn

Insolvency Index: stark north-south divide, but most regions see fall in company failures

The region has a reasonably high number of start-ups

James Ramsbotham, chief executive, North East Chamber of Commerce

Insolvencies in the UK show up a sharp north-south divide, analysis by Exaro reveals. The north of England is suffering more than the south from company failures, but the figures show that most regions are seeing a fall in the numbers year on year.

The North West, for example, has a relatively high level of insolvencies compared with the number of businesses in the region.

The first pair of maps to the right, which can be clicked to enlarge, show that in June 2013 the North West, for example, had 28 companies that went into administration or receivership, and 56 winding-up petitions. These figures are down from 40 and 74 respectively in the same month last year.

And the second pair of maps to the right show that the same region had 159 winding-up orders or resolutions and 163 companies that appointed liquidators in June 2013. These figures are down from 196 and 203 respectively in June 2012.

July’s headline figures from the Exaro Insolvency Index showed last week that company failures across the whole of the UK have reached a turning point as all types of insolvencies are falling. It marked a potential turnaround for the UK economy.

The Exaro Insolvency Index tracks all company failures throughout the UK – a key economic indicator – and provides a breakdown by sector and geography.

The regional breakdown is based on the addresses of companies’ registered offices. These may not reflect where the businesses are really located, although the regional figures are remarkably similar when based on trading addresses instead of registered offices.

Exaro’s analysis relies on insolvency notices as published in the London, Belfast and Edinburgh Gazettes. Insolvency notices must be submitted to these publications to cover the whole of the UK.

The absolute numbers for the regional breakdown does not, however, tell the full story. We weighted the figures against the number of businesses in each region, as compiled by the Department for Business, Innovation and Skills (BIS).

The businesses as counted by BIS are not the same as companies registered at Companies House, but they provide a reasonable base line against which insolvencies can be measured.

The greater the proportion of company insolvencies for a given region, the higher the red in our four maps.

This is why northern regions are shown as being in a higher state of red. Southern regions are shown as suffering less from insolvencies, although London’s figures are relatively high.

Insolvency levels have fallen for most regions. The North East, Scotland and Northern Ireland each saw falls in three of the four types of insolvency.

James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “The region has a reasonably high number of start-ups, with many people who have found themselves out of a job following the severe cuts to the public sector choosing to start their own companies.”

By contrast, the South West saw rises in all four insolvency types. In June 2013, it had 13 companies go into administration or receivership, 36 winding-up petitions, 102 winding-up orders or resolutions and 85 appointments of liquidators. By contrast, in June last year, the figures were 9, 35, 67 and 55 respectively.

London saw slight rises in three out of the four insolvency types. It saw a fall in companies that went into administration or receivership, down from 44 to 30, which suggests that it will suffer a lower level of insolvencies in general in the near future.

The Exaro Insolvency Index provides a detailed analysis of company failures in the UK – a key economic indicator. A bespoke service is available. If you are interested in buying a regular, specialised bulletin that enables you to track the data – including lists of company failures – in specific sectors or geographical areas, please e-mail, putting in the subject line: Exaro Insolvency Index.

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