Partner Article

North East "bucking the trend"

According to the latest figures from business advisory firm Deloitte, the number of UK businesses going into administration rose by 26% in 2006 compared with the previous year. But the North East appears to have bucked this trend with a reduction of 2%.

Ian Brown, reorganisation services partner at Deloitte Newcastle, said: “Many businesses have shown signs of distress over the past year. Our research shows that the worst hit were in the financial services, hospitality & leisure, and recruitment and business support services sectors. The overarching theme of increased costs appears to have hit a large number of the businesses. “Overall, the figures suggest the economy is not as healthy as it might seem on the surface.”

Neil Matthews, reorganisation services director at Deloitte Newcastle, said: “The costs associated with running an independent financial advisory business, such as FSA regulation and professional indemnity insurance, have increased significantly in recent years making it more difficult for the smaller businesses to absorb these costs. “The last year has seen a number of regulatory changes creating an additional audit burden, which may have pushed a number of the smaller operators over the edge.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .