Milton Keynes in vanguard of recovery - but some cities feel the pinch

Some gloomy predictions on insolvency this morning - and it looks as if some parts of the UK will feel the pain more than others.

by Emma Haslett
Last Updated: 24 Jan 2011
Milton Keynes may not be one of Britain’s premier beauty spots, but economically, it’s positively blooming: a new report by the Centre for Cities suggests that it has been one of the fastest-recovering places in the UK since the recession. However, the report also warned that recovery is going to be ‘unevenly spread’ across the UK – some areas will bounce back quickly, while others (mainly those dependent on public sector jobs) will need extra support. If they don’t get it, they may end up with more than their fair share of the 23,500 companies predicted to go bust this year…

According to the report, eleven cities account for a third of all private sector jobs, including the likes of London, Birmingham, Edinburgh, and Manchester. But places like Reading, Aberdeen, Leeds and Bristol (and, of course, sunny Milton Keynes) may actually be best-equipped to bounce back, due to their capacity to create new private sector jobs. Equally, unlikely spots like Hull, Doncaster and Northampton are recovering faster than expected: although hit hard by job losses, the number of people claiming Jobseeker’s Allowance has fallen by 1.2% in the past year, more than twice the UK average.

Sadly, the same isn’t true of places like Sunderland, Liverpool, Birkenhead, Swansea and Newport, where heavy job cuts in the public sector have created higher-than-average unemployment – and with little prospect of a boost from the private sector. What’s more, the cuts are going to make matters worse (particularly in the north-west). The Centre for Cities reckons more autonomy might help: it wants the Government to install London-style mayors in the worst-affected cities, and give them powers over things like local business rates.

The latest insolvency predictions from Begbies Traynor are unlikely to cheer anyone up. The firm (home to MT blogger Nick Hood) says insolvency rates are likely to rise again this year: apparently 148,000 companies had serious financial problems in the last three months of 2010, while firms owe a collective £52.7bn to creditors and suppliers. As many as 23,500 companies could go out of business this year, it reckons – a 10% rise on 2010.

So this year’s going to be a long hard slog – in some places more than others. But cities are starting to take a more proactive approach: Liverpool, for example, has just opened its own ‘business embassy’ in London’s New Bond Street, in a bid to attract more businesses to Merseyside. It’s a start…

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