East Anglia: Region has second-lowest business failure rate, says Experian

THE East of England retains one of the lowest company failure rates in the UK despite an increase in insolvencies last month, according information services company Experian.

A total of 151 corporate insolvencies were recorded in the region in July, an increase of nearly 18% compared with the same month last year and representing a failure rate (failures as a percentage of all businesses) of 0.08%.

This was slightly up on the July 2010 failure rate of 0.07%, but the East still ranks as the second best region in the country with only Scotland (0.07%) having a lower failure rate last month.

In contrast, the highest failure rates were 0.14% in the North West, where the number insolvencies was 61% up compared with July last year, and 0.13% in Yorkshire, despite a year-on-year increase of just 1.4%, the lowest in the country.

Greater London and the South Each each recorded failure rates of 0.10%, in line with the national average.

The total number of insolvencies across the country was up 27% compared with a year ago at 1,962.

Larger companies, those with more than 500 employees, saw a 12.5% fall in the number of insolvencies although small and medium-sized firms followed the upward trend.

Most Read

Max Firth, managing director of Experian Business Information Services, said: “When a large company becomes insolvent it can create a domino effect in the surrounding economy, so the improvement in insolvency rates among firms with more than 500 employees is good news.

“However, this doesn’t lessen the need for all organisations, regardless of their size or sector, to be mindful of the riks their customers, suppliers and partners can expose them to.”

n Shay Lettice, eastern region chair of R3, the trade body for insolvency professionals, has warned that HM Revenue & Customs is taking a tougher line with firms over late payment of tax bills.

Just 4,730 firms in the region have been given time to settle so far this year, compared with 13,100 in 2010 as a whole.