More than half the companies in Dacorum fail to survive five years

Federation of Small Businesses says firms were "already up against it" before the pandemic

Thursday, 10th December 2020, 9:36 am
Updated Thursday, 10th December 2020, 9:38 am

More than half the the companies started in Dacorum failed to survive in business up to the end of 2019.

The Federation of Small Businesses says firms were "already up against it" before the Covid-19 pandemic - but they are now reporting record falls in revenue with many posed to cut staff numbers.

Office for National Statistics data shows 1,005 businesses in Dacorum were set up in 2014 – but after three years 670 were still active, and by 2019 just 480 remained.

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That equates to a five-year survival rate of 48%.

In the East of England, both Great Yarmouth and Luton had the lowest rate, 38%, while both King's Lynn and West Norfolk and Broadland had the highest at 51%.

Across the UK, the five-year survival rate to 2019 was 43%.

Survival rates for businesses in clothes manufacturing, food services and food services such as restaurants were among the lowest nationally.

In the FSB's Small Business Index report, Mike Cherry, national chairman, said small firms were already struggling with political uncertainty and a surge in operating costs before the Covid-19 pandemic.

He said Government support, such as the Eat Out to Help Out scheme, had led to a “summer bounce”, but that many were now struggling.

He added: “Firms still report a record drop in revenues, while the number planning to let staff go is at an all-time high."

"Exporters– still without any significant clarity around what the future holds for trade with Europe – say international sales have plummeted."

Last year, 990 new businesses were launched in Dacorum – 75 more than those which ceased to trade in the same year.

At last count there were 9,025 active companies in the area.

The ONS figures also reveal one-year survival rates for companies set up in 2018.

In Dacorum 890 businesses were still active one year on from launch, a survival rate of 91% which is slightly higher than the UK rate of 89%.

Due to coronavirus restrictions imposed from March, many industries in the UK have been hit by enforced closures or lower takings.

The Government has provided a range of support for businesses over the pandemic including a Bounce Back Loan Scheme, the opportunity to defer VAT payments and business rates holidays.

The Coronavirus Job Retention Scheme has also been extended until March.

A spokesperson said: “We are committed to making the UK the best place in the world to start and grow a business.

"That is why we have invested more than £623 million in start-up loans for 75,000 new businesses since 2012 and created a competitive tax environment that rewards entrepreneurship.

"We are also looking to refresh our Industrial Strategy to stimulate economic growth to create jobs and new business opportunities for decades to come. "

They added: "But we also understand the pressure businesses are currently under, which is why we have acted to support them through the pandemic with a £280 billion support package, which is among the most generous in the world."