Research conducted by RSM Tenon, indicate that the ‘North-South’ divide for the number of companies failing, increased in 2011. A total number of 21,000 businesses collapsed in the UK, with approximately one out of every 40 businesses in the North East and North West of the UK collapsing. In stark comparison, less than one out of 70 businesses collapsed in the South East and London.
The Coalition government were contemplating an economic recovery which would be led by the manufacturing industry. However, the research carried out by RSM Tenon indicates that the companies which are failing most in the North of England are manufacturing businesses. The head of RSM Tenon’s recovery service, Carl Jackson said:
“Sadly, it’s a return to the old story: northern England used to be geared towards industry, but, judged by proportion of insolvencies, it appears that industry is still deserting it.”
Jackson went on to say that businesses dealing in medical, pharmaceutical, furniture, industrial materials or paper and wood industry, had a far higher chance of succeeding if they were situated in the South of England. Although the failure of businesses in the North could be blamed on the public sector cuts, the number of public services businesses which failed in 2011 was similar in both the North and South. Mr Jackson believes that the impact of public sector cuts is still to have an effect on the divide, especially as the North of England has a greater dependency on the public sector.
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