North East hit hardest by insolvency woes

Experian figures urge firms to tighten up procedures despite overall fall in business failures

Closed: The number of businesses going bust in the North East is on the up

Business failures in the North East of England more than doubled in the space of two months, as the insolvency rate continues to fluctuate across the UK.

The latest figures from services company Experian revealed that despite this, the UK-wide picture shows the insolvency rate varying month by month, revealing an overall improvement since early 2009.

September saw a slight annual decrease (from 0.09 per cent to 0.08 per cent) but was up on the 0.07 per cent reported in August 2010.

Yorkshire was the only region to see an improvement between August and September, while the insolvency rate for the East Midlands, West Midlands and Eastern England remained static, but the remaining regions all saw an increase. The North East saw the greatest increase, from 0.06 per cent in August up to 0.15 per cent in September.

Max Firth, managing principle of pH, an Experian company, said: “The North East of England’s business population is one of the smallest so every insolvency can dramatically affect the rate, which explains why we have seen a big variation between August and September. This underlines why businesses must be vigilant and closely monitor the financial health of every organisation with which they do business.”

Companies with 500 employees or more saw the greatest rise year on year in the insolvency rate, from 0.07 per cent in September to 0.16 per cent. While firms with six to 10 employees saw the largest annual drop in the rate of insolvencies from 0.21 in September last year to 0.16 in the same period this year.