Suffering seaside towns
Five out of the 10 local authorities with the highest total individual insolvency rates in 2011 are seaside towns, according to an analysis by R3, the insolvency trade body, of recent Insolvency Service figures. Blackpool, with an individual insolvency rate of 57.7 per 10,000 adults has approximately double the England and Wales rate (27.1).
The other seaside towns in the top ten are Wansbeck (56.6) in the North East, Penwith (51.2) and Torbay (50.3), both in the South West and Scarborough (50.2) in Yorkshire. Three of these towns also have an above average percentage of companies at risk of failure.
Using Bureau van Dijk’s ‘Fame’ database, R3 has been able to ascertain the percentage of companies in each region that are at risk of failure in the next 12 months*.
Penwith, Torbay and Scarborough all have a higher percentage of companies at risk compared to the national average (21.6%). In Penwith, 24.4% of companies are at risk of failure; this figure rises to 25.2% in Wansbeck and 25.7% in Torbay. Both Blackpool (21.8%) and Scarborough (20.7%) are closer to the national figure.
Lee Manning, R3 President, comments: “Despite the increase in those prepared to opt for a “staycation” rather than an overseas package holiday, many families simply can no longer afford to take a holiday at all or are cutting back on how much they spend while they are away, both of which is having a significant impact on seaside resorts.
“Many of these areas are still very much reliant on the holiday trade, and are therefore under enormous pressure. Without the boost that tourism gives to local economies, many small local businesses are struggling to stay afloat and this will have an inevitable impact on the finances of those who own, supply to and are employed locally by these businesses.
“We appreciate that individuals are also feeling the pinch, with wages stagnant and the cost of living increasing, but the important thing is to seek help early. We would urge any business or individual who is struggling to make ends meet to seek advice from a regulated professional.”
*‘At risk of failure’ is defined as a company that has a QuiScore below the normal band. The QuiScore is a measure of the likelihood of company failure in the twelve months following the date of calculation.
The QuiScore is given as a number in the range 0 to 100. For ease of interpretation, that range may be considered as comprising five distinct bands:
82-99 The Secure Band:
57-81 The Stable Band:
37-56 The Normal Band:
19-36 The Caution Band:
01-18 The High Risk Band:
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Antoinette Huka, Communications Officer
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Will Black, R3 Communications Manager
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- R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners.
- R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies
- R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals
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