Top five UK bankruptcy blackspots all on coast

Survey finds Torbay has highest insolvency rates as seaside towns and cities get trapped in 'vicious cycle' of decline

Coastal towns and cities account for the five worst places in Britain for personal bankruptcies, and 21 in the worst 50, according to an analysis highlighting the speed at which seaside resorts and ports are falling behind the rest of the country economically.

They include Hull, newly crowned city of culture, which is said to have the fifth-highest rate of insolvencies. The findings are based on 2012 figures, well before the recent announcement by BAE Systems that there will be no more shipbuilding in Portsmouth, costing 940 jobs.

The highest numbers were in Torbay, Devon, with 54 new cases of insolvency per 10,000 population, compared with a national average of 25, said accountants Wilkins Kennedy. The town was followed by the Rhyl and Prestatyn area in north Wales, with 53; Scarborough and Blackpool, with 48; and Hull, with 44. Other coastal areas featuring prominently included Runcorn and Widnes, Cheshire, in eighth place and Great Yarmouth, Norfolk, in 10th.

Stoke-on-Trent and Tamworth, in Staffordshire, and Mansfield, in Nottinghamshire, took up the other places among the worst bankruptcy rates. Figures include bankruptcy orders, individual voluntary arrangements and debt relief orders.

Anthony Cork, partner at Wilkins Kennedy, said: "Many of our coastal towns have been suffering a slow decline for many years, as tourism struggles to compete with cheap overseas travel, fishing quotas are slashed and other maritime industry has all but died off. These figures highlight how desperate their plight still is – with even traditionally popular tourist destinations suffering severe pain.

"Within just the top five of the personal bankruptcy league table, you can see a pretty broad cross-section of the UK's picture-postcard seaside economy failing. Many will be surprised to see places like Torbay, with its reputation for luring genteel, affluent holidaymakers to the 'English Riviera', sitting right at the top alongside Blackpool, the UK's answer to Las Vegas, and more traditional bucket-and-spade resorts like Rhyl and Scarborough."

Although there were exceptions in the south of England, such as Brighton or Bournemouth, which had diversified, the vast majority of towns relying on the seasonal tourist trade were struggling badly. "The recession has hit hard despite the temptation for more people to stay and holiday in the UK instead of going abroad," said Cork. "For every hot-spot like Newquay or Padstow, there are many more places where flagging tourism plus the lack of permanent, well-paid employment are taking their toll."

Cork said the government's £29m coastal communities fund was a step in the right direction but that such investment was unlikely to go very far.

He added: "Students and graduates with high levels of debt will find it hard to return to their home towns if they can't find a decent job, but unless young talent can be persuaded to stay, it's difficult for businesses to invest, creating a vicious cycle.

"Funding for small businesses remains very tight at the moment, particularly where trade is seasonal, putting a huge strain on the self-employed, who may have ploughed a substantial proportion of their personal assets into their businesses or put them up as security."

Article Source : http://www.guardian.co.uk
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