Yorkshire and Humber firms account for 10% of administrations last year as national insolvencies rise

Yorkshire and the Humber was the fourth highest region for administrations across the country, with only Greater London, the North West and South East coming in front.

Retail, construction, hospitality, manufacturing and real estate were the worst-hit sectors for the second year in a row, collectively accounting for 55 per cent of the 1,718 administrations.

Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “In 2025, businesses across the UK will face an increasingly challenging environment, with a perfect storm of factors threatening to push more companies toward financial difficulty.

“Prolonged periods of difficult trading, exacerbated by geopolitical tensions and the impact of new tax burdens introduced in the latest budget, will intensify the pressures many businesses are already grappling with.

“The increase in national insurance contributions, coupled with the lower threshold for payments, will stretch cash flows for companies that are already operating on razor-thin margins.

“As we saw in 2024, sectors like retail, hospitality and manufacturing were hit hardest, and there is a real risk that without targeted support, more businesses will be forced to make difficult decisions, including cost-cutting measures, layoffs or even closure.”

The figures come alongside new research from the UK’s insolvency and restructuring trade body, R3, which claims that Yorkshire and the Humber’s economy was hit by a “double whammy” of bad news last month.

Data from the group shows a marked decrease in new business start-ups in the regionthroughout December, along with a small rise in insolvency-related activity.

In Yorkshire and the Humber, insolvency-related activities, which include liquidator and administrator appointments and creditors’ meetings, were up by five per cent, from 220 in November to 231 in December.

Business start-ups fell by 16 per cent in the region, following a 16 per cent decline in November, and taking the number of new start-ups in the region to 3,235.

This was a pattern that was also repeated across the UK.

Insolvency-related activity increased in December across every UK region apart from Scotland, which saw a 32 per cent drop, and South East England, where it fell by four per cent.

The North East and Greater London saw the largest hikes in insolvency-related activity, up by 60 per cent and 25 per cent respectively.

Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “December’s double whammy of increased insolvency-related activity and the falling numbers of new business start-ups is extremely concerning and comes as we are also seeing levels of UK business confidence plummet to their lowest since the 2022 mini-budget.

“Rising costs and taxes are putting firms under immense pressure and unfortunately that increased burden looks to be already having a negative effect on hard-pressed businesses as well as deterring new start-ups.”