Leeds business closures increase by 43 per cent in just one year, report claims

LEEDS: A paper from the Centre for Cities think tank published this week claimed that the number of firms shutting down in the city jumped by a massive 43 per cent between 2016 and 2017.

The claims refer to figures published by the Office for National Statistics in November 2018, which claimed that the number of business “deaths” jumped from 3,195 in 2016 to 4,570 in 2017.

It puts Leeds behind only Nottingham (47.8 per cent) and Doncaster (47 per cent) and was far higher than the national average (24 per cent) for the rates of increase in closures during this period.

The only large town or city to see a reduction in business closures during that time was Exeter.

The ONS figures add that the rate of new businesses being set up in the city fell from 4,820 in 2016 to 3,815 in 2017 – a drop of more than 20 per cent.

Mark Goldstone, head of business representation and policy at the West and North Yorkshire Chamber of Commerce, said Leeds was a good place to set up a new business, despite the figures.

He said: “In any dynamic economy businesses will open and close all the time and for lots of different reasons. Leeds certainly has been one of the best places to open and scale up new business over the last decade and as a consequence has also some of the highest levels of private sector job creation.

“The recent announcement by Channel Four to locate to Leeds is already acting as a catalyst to bring more companies to the city and I have no doubt there will be even more opportunities for entrepreneurs to locate here in the region.

“As long as we continue to develop the talent pipelines companies need through school, college and university engagement the greater the economic opportunities which will exist.”

The Cities Outlook 2019 report, published on Monday, focuses mainly on the effects of Government austerity on cities and large towns across the UK.

It claimed cities have been hit twice as hard by austerity than elsewhere in the UK, with the North of England bearing the biggest burden.

The report also claimed that Wakefield saw the fourth biggest drop in Government spending in the country, receiving 30 per cent less cash than it did in 2010, equating to a £484 cut to spending per person.

Andrew Carter, Centre for Cities chief executive, said: “Cities drive our national economy and, while austerity has improved local government efficiency, its sheer scale has placed public services in many of our most populated cities under huge pressure. Cities Outlook 2019 shows that the cities most affected are economically weaker and have been less able to absorb the loss of central government funding.

“Councils have managed as best they can but the continued singling-out of local government for cuts cannot continue. There is a very real risk that many of our largest councils will in the near future become little more than social care providers. Fairer funding must mean more funding for cities.”