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Personal insolvencies across North-East up five-fold
PERSONAL insolvencies in the region have increased fivefold in ten years, figures show.
The North-East had the highest individual insolvency rate in the country last year at 35.2 per 10,000, compared to 7.3 in 2001.
There were 1,441 personal insolvencies in the region in 2001. However, there were 7,319 last year.
Last year’s rate was twice that of London, which was the lowest in the country at 17.5, the Office for National Statistics (ONS) said.
The figures also revealed that between 2008 and last year, Middlesbrough recorded the country’s second biggest rise in the individual insolvency rate.
The rate increased by 76 per cent from 174 to 310 cases.
In Yorkshire and the Humber, the insolvency rate increased from 8.6 cases per 10,000, 3,298 in total, in 2001 to 28.9 (12,255 cases) last year.
Experts said the figures highlighted the regional gap between the rich and poor in recession-hit Britain.
David Birne, insolvency partner at chartered accountant HW Fisher and Company, said: “These figures confirm what has long been apparent; that the pain of insolvency is not being spread evenly across the country.”
Despite the increase since 2001, insolvency rates in the region have fallen since 2009.
Jim James, former chairman of insolvency trade group R3 in the North-East and head of the insolvency and corporate recovery unit at law firm Ward Hadaway, based in Newcastle, said: “Whilst it is encouraging that the number of individual insolvencies in the North-East is falling, the fact that our region still tops this list is still a significant concern.
“The economy is showing little sign of improving quickly in the foreseeable future, which means that the current climate of financial uncertainty is set to dog us for some time to come.
“There is no doubt that there are still wide-ranging financial issues to address for a lot of people in the North- East.”
Individual insolvency procedures include bankruptcy, debt relief orders and individual voluntary arrangements (IVA). Last year, the North- East had the highest bankruptcy and IVA rates in the country, as well as total individual insolvencies.
Individual insolvency rates began to rise dramatically from 2004, the ONS said, following the implementation of the Enterprise Act 2002 and again in 2008, coinciding with the recession.