Instances of insolvency fell sharply in Yorkshire and Humber last month, according to research from a leading industry body.
Insolvency-related activities, including liquidator and administrator appointments and creditors’ meetings, were down by almost a third (29%), research by R3 showed, falling from 309 in October to 220 in November. The region saw a 16% decline in the number of start-ups, at 3,843, compared with 4,570 in October.
Insolvency activity levels fell across all English regions as well as Northern Ireland but increased by 9% in Scotland. The North West suffered the highest level of activity, outside of Greater London, at 382 - down 13% on the October.
Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “The fall in the numbers of start-ups is concerning, and is likely to be an extension of the general business confidence plunge that we have witnessed in the aftermath of the Autumn Budget. While entrepreneurs and businesses take time to absorb the consequences of the Budget for their future plans, the hope is that announcements early in 2025 on tax reform, industrial strategy and infrastructure may help boost growth and provide a lift to start-up numbers too.”
He added: “In the meantime, for businesses facing financial problems, whether as a result of the Chancellor’s Budget announcements or otherwise, we would always urge them to seek advice from qualified professionals to achieve the most positive outcome possible.”
R3's analysis, using data from business intelligence and credit checking provider Creditsafe, came as accountancy firm Azets published research highlighting how changes in the Autumn Budget created more headwinds for the hospitality sector. The firm pointed to the incoming rise in Employer National Insurance Contributions, along with rises in the National Minimum Wage as particular concerns.
Richard Whitelock, employment tax advisory partner at Azets, said: "It is difficult to convey just how difficult these mandatory rises will be for many firms in the regional hospitality sector. There are a lot of cold-sweat calculations going on behind the scenes as businesses here in Yorkshire work out what their new higher breakevens will be – and what needs to be done to recoup the higher outlays from April without hiking prices for weary customers who already tightened belts when inflation hit a 41-year high just two years ago.
“There is no doubt that the sector is set to face the most arduous financial challenges since the pandemic and the subsequent cost-of-living crisis, with the Autumn Budget reportedly adding an additional £3.4bn in employment costs and workers are likely to bear the brunt. What everyone has to bear in mind is there is no longer the business life support measures in place as there were during the national health emergency, such as the bounceback loans and furlough scheme.”
