Double blow for flood-hit South West as coastal towns top financial distress league table
New research from Begbies Traynor, the UK’s leading independent insolvency practice, today reveals the towns and cities in the UK with the highest levels of corporate financial distress. The research, undertaken using the Red Flag Alert dataset, alarmingly reveals that as the beleaguered south west struggles with severe weather and flooding many of the region’s coastal towns are topping the financial distress league table.
Weymouth, Dorchester and Newton Abbott all appear at the top of the list for Q4 2013, with 14.0%, 12.4% and 12.2% of their business populations facing severe financial difficulty. Torquay also features in the top ten with 11.5% of businesses in distress, significantly above the UK average of 8.8%.
Julie Palmer, Partner at Begbies Traynor, commented: “Our research highlights the challenges facing coastal towns such as Weymouth and the broader South West region, which rely heavily on tourism and agriculture, even before the devastating effects of the recent severe weather. Businesses in this region, which are already vulnerable during the winter months due to lower visitor numbers and therefore reduced local spending power, now face the immediate challenge of dealing with further business disruption from the damaging effects of bad weather and incessant flooding.
“Without a rapid increase in inward investment, to help the region diversify away from tourism and agriculture, and investment in infrastructure to improve the region’s accessibility and ease of doing business, we fear significant growth in the number of business failures in the region over the coming years.”
The figures show a contrasting picture across London and the South East, which contain eight of the ten UK locations with the lowest levels of business distress. Barking and Dagenham are bottom of the tables with distress rates of 4.9% and 5% of the local business population respectively; Southsea and Altrincham are the geographical exceptions, experiencing the lowest levels of financial difficulty outside of London at 5.3% and 5.8% respectively.
Julie Palmer said of the figures “It appears that the South East continues to go from strength to strength, as London outpaces the rest of the UK economy due to its attraction as a hub of international activity and investment - not to mention increased confidence across the region as a result of house price rises, and continued public sector spending on large infrastructure projects.
The data also details business distress by large town and city. 23 locations across the UK were analysed, which showed Edinburgh and Aberdeen recording the lowest distress levels of 6.8% and 7.0% of the local business population respectively. Newcastle and Belfast ranked highest with 10.3% and 9.8%.
Business population over 10000