Yorkshire business insolvencies up almost 40 per cent on pre-pandemic levels

Nationally, around eight out of ten UK local authorities saw an increase in company insolvencies last year compared to the year prior to the pandemic.

Wakefield had the biggest regional increase in insolvencies, with a 146 per cent increase from 52 in 2019 to 128 in 2022.

The withdrawal of government support and soaring energy costs have been blamed for the rise, with retail and construction the hardest hit industries. The Data Unit looked at insolvency notices in The Gazette, the official paper of record for public notices.

Michael Weedon, member lead for retail and high street at the Federation of Small Business, said the figures came as little surprise.

He said: "We knew during the first year of pandemic there was deliberate business support from the government - we knew when that tailed away, particularly in terms of finance, there was a risk we'd see companies disappearing, because if the support went away, they wouldn't be able to to persist depending on their state of confidence.

“One of the interesting things about FSB research is, when we look at confidence surveys, which are done quarterly, more business confidence fell throughout most of 2021 and 2022, and within that retail fell more sharply than the overall level of confidence - exactly as insolvencies were rising.”

He said the Government could take a number of steps to better protect businesses.

“Reinstating energy support levels at the rate they were previously, would make a huge difference. The support for business is being wiped away - while energy rates are not likely to fall any time soon.

“We also have a long-standing aim to see the small business rate relief, which currently kicks in at a £12,000 rateable value and disappears completely by £15,000. We want to take that up to £25,000, because it would take a swathe of those small businesses in the high street right out of the business rate system.”

Julie Palmer, a regional managing partner at insolvency experts Begbies Traynor, said: “Some businesses have emerged from the pandemic doing well, but for many others trading is very difficult, particularly those that are in consumer-facing sectors.

“There's a lot of nervousness in the economy at the moment due to macro-economic pressures. With interest rates, they are still not high in relative terms, but high in terms of how this generation perceives them, together with inflation that until recently seemed to be galloping out of control.

“People are tightening their belts and it's particularly those consumer-facing sectors, that we're really beginning to see struggle at the moment.”

A Government spokesperson said: “The Business Minister recently wrote to the CEO of Ofgem to raise this issue and ask them to ensure energy suppliers show forbearance to businesses that are struggling to pay energy contracts, and government support does not go to waste.

“We have already provided around £400 billion of direct support to businesses, including business grants, coronavirus loan schemes, the Coronavirus Job Retention Scheme, plus income tax payment deferral. This is alongside a new arbitration scheme to help resolve pandemic related rent debt.”