Insolvency rates show 'stark' north-south divide

A "stark" divide between the north and south of England has opened up since the recession in rates of personal insolvency, highlighting the uneven nature of the economic recovery.

In London and the home counties, insolvency rates fell 18 per cent and 16 per cent respectively in the five years from 2008 as the services industries staged a concerted recovery, according to research by the accountancy firm Moore Stephens. But in the northeast and northwest of England, personal insolvency rates rose by 5 and 4 per cent respectively.

"Of almost 350 local authority areas, almost 100 are still experiencing rises in insolvency levels, showing that recovery is clearly uneven," the research said.

Rates of personal insolvency across the UK dropped from 24.8 per 10,000 of population in 2008 to 22.4 per 10,000 in 2013.

But in Wales they rose 4 per cent. The biggest single increase was in Denbighshire in north Wales, where personal insolvencies jumped 44 per - more than anywhere else in the UK.

Coastal areas such as Hartlepool and Carlisle appear particularly hard hit, accounting for eight out of the 10 locations with the highest insolvency rates. "At this level, government initiatives to boost the country's seaside economy have yet to bear fruit," the report said.

Jeremy Willmont, Moore Stephens' head of restructuring and insolvency, said the data suggested the north-south divide had grown substantially in personal finance terms since the recession.

Partly this was the result of London and the southeast's reliance on finance, which had appeared a liability at the height of the crisis, but became a strength when recovery returned.

"The capital's position as a magnet for international investment has allowed London, the home counties and its residents to repair their finances at a far faster rate than the rest of the UK," he said.

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