Firms considering their credit management options, including credit insurance, may be interested in figures that show the divide between the north and south of England in terms of business success has been widening.
According to accountancy and professional services firm RSM Tenon, over the course of last year, more than 21,000 companies become insolvent. However, the fortunes of enterprises at either end of the nation were markedly different.
The research indicated that firms located in the north-east and north-west of the country were more than one and a half times more likely to fail than their counterparts based in London and the south.
RSM Tenon revealed that over 6,000 companies in the north went bust over the 12-month period, representing one failure for every 40 companies registered in the area at Companies House in January 2011.
In contrast, around 9,600 companies in the south become insolvent during this time, which was less than one in 70 of those registered.
Meanwhile, in the East and West Midlands, one in 50 enterprises failed in 2011.
Given these statistics, it is no wonder that so many organisations are focussing keenly on their credit management strategies at present, including their credit insurance provisions.
Responding to the findings, of RSM Tenon’s Carl Jackson said: “It’s tempting to blame the rift on the effect of the comprehensive spending review and the current austerity period, especially given that the north – and particularly the north-east – is relatively dependent on the public sector compared to elsewhere in the country.
“However, the proportion of failed public services companies in the north and the south was roughly similar this year.”
Therefore, the picture is more complex, he added. According to Mr Jackson, the sectors experiencing the most trouble in the north are manufacturing-based. While northern England used to be geared towards industry, such activities appear to be in decline there now, he suggested.
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