Yorkshire and the Humber shows resilience as levels of insolvency-related activity rise

With most UK nations and regions seeing increasing levels of insolvency-related activity in May compared with the previous month, Yorkshire and the Humber remained steadfast with a rise of 12.5%, according to the latest research from the UK’s insolvency and restructuring trade body, R3.

The research from R3, which is based on an analysis of data provided by CreditSafe, showed that last month, nine of the 12 regions and nations surveyed saw an uplift in this type of activity (which includes liquidator and administrator appointments and creditors’ meetings). In Yorkshire and the Humber, 296 businesses were affected in May, 33 more than in April 2024. The region performed fairly well compared with others such as Northern Ireland which experienced a hike of 57.1%, while the West Midlands rose by 18.4% and the North West by 15% compared with the previous month.

In contrast, three regions and nations saw a fall in month-on-month insolvency-related activity: the South West (down by 17.1%); the North East (-7.7%); and East Anglia (-2.5%).

Looking at the number of start-ups, another indicator of economic health, the whole of the UK experienced a worrying month-on-month fall in levels of new businesses. Yorkshire and the Humber was among six regions and nations which had 40-45% fewer start-ups in May than the previous month, with the region dropping from over 6,770 to around 3,770 new businesses. The most severe fall was in Northern Ireland where there was a drop of 57%. The strong performances were seen in Scotland (down by 21%) and in the South East, East Anglia and London (all fell by 38%).

Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “While there has been some encouraging news with the latest ONS figures showing that there was slight economic growth in the first quarter of the year, many businesses appear not yet to be feeling the benefit. It is concerning to see a marked and widespread increase in insolvency-related activity across most of the UK, as well as a nationwide fall in the number of entrepreneurs launching new ventures. However, Yorkshire and the Humber seems to be holding its own compared with many of the other regions and nations.

“Despite relief that the UK has moved out of recession after a relatively mild downturn, economists are forecasting only slow growth for the second half of 2024 with pressure on consumers continuing amid high interest rates and the impact of last year’s surging inflation. Given the added uncertainty and disruption of an impending General Election, small businesses would by well-advised to proceed with caution and turn to insolvency professionals for support at the first signs of financial difficulty when the most tools will be available to help them.”