Rise in insolvencies across Lincolnshire – but many firms weathering the storm

Figures from the BBC Shared Data Unit shed light on the challenges faced by businesses.

However, council bosses also highlighted the resilience displayed by local authorities and business leaders.

Over the past four years, Lincolnshire has seen a total of 204 insolvencies.

In 2019, there were 49 insolvencies, which decreased to 35 in 2020. However, the numbers rose to 42 in 2021 before experiencing a significant jump to 78 in 2022.

This surge represents a 59 per cent increase compared with 2019 and an 86 per cent rise compared with the previous year, underscoring the impact of challenging trading conditions on local businesses.

Coun Colin Davie, Lincolnshire Council portfolio holder for economy, expressed confidence in the county’s ability to weather the storm.

He said: “Despite tough trading conditions, our businesses in Lincolnshire have weathered the storm relatively well, in part thanks to the government and county council support that was rapidly put in place during the Covid pandemic.

Coun Davie further highlighted that Lincolnshire’s insolvency figures are relatively low compared with the national average, with only 0.23 per cent of businesses being insolvent in 2022, compared with 0.75 per cent in England and Wales overall.

He said support from the government and the council had helped businesses weather the storm.

According to the council, the county recorded more than 4,300 new business start-ups in 2022, a testament to the entrepreneurial spirit and the robust economy within the region.

The Federation of Small Businesses shed light on the sectors most affected by insolvencies, particularly in the wake of the Covid pandemic.

Paula Gouldthorpe, FSB development manager, said industries such as construction, retail, and hospitality have faced disproportionate impacts.

These sectors, unable to adapt their services to meet lockdown restrictions, have encountered significant challenges due to rising staffing, energy and supply costs.

Decreased consumer spending on non-essential items has further exacerbated the difficulties they face.

Amid these challenges, the FSB aims to send a message to small business owners that “you are not alone”.

Ms Gouldthorpe urged business owners to seek support and engage in open and constructive conversations with creditors.

She said: “Remember not to bottle up or ignore your debt-related worries. Getting your concerns out in the open and seeking advice from an expert third party is crucial and will help to know which is the best path to take.”

The FSB also highlighted the availability of business support networks and specialized assistance for those feeling uncertain about their debt, encouraging proactive action to explore options and find a way forward.

The rise in insolvencies among small firms in Lincolnshire reflects the current challenges faced by businesses.

However, local authorities, business leaders, and support organizations continue to provide resources and assistance to help businesses adapt and overcome these difficulties.

As the county moves forward, the focus remains on building resilience, fostering innovation and supporting the growth of a diverse and thriving business community.

Nationally, 85 per cent of upper tier authorities in the UK saw a rise in liquidations, indicating economic turbulence.

In response, a government spokesman highlighted ongoing efforts to address energy cost concerns and provide support for businesses, including pandemic-related rent debt.