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UK business start ups fall by nearly a fifth in last five years. Orkney Islands among places to defy the trend with 42% increase

11th January 2017

Start-up numbers have fallen significantly in the last five years according to Lloyds Bank analysis. The findings reveal that 19% fewer new businesses were started up in the UK in November 2016 compared to November 2011.

Regionally, the data from BankSearch shows that Wales has seen the largest decline in new start-ups falling by over a quarter (26%) between a rolling 12 months from November 2011 compared to November 2016. In contrast, the business climate appears to be more positive in Scotland with a much smaller decline in new business openings of just 3% over the past five years.

England has also been hit hard, declining by a fifth (20%). As this is where the greatest volume of new start businesses are launched, this equates to nearly 100,000 fewer new businesses created in 2016 compared to 2011.

Although there has been a fall in the number of new businesses being created, Lloyds Bank has maintained its commitment to supporting British enterprise. In 2016 Lloyds Banking Group (which includes Lloyds Bank) exceeded its pledge to help 100,000 start-ups get off the ground as part of its drive to support small businesses.

Jo Harris, Managing Director of Retail Business Banking at Lloyds Bank, said: “The New Year is a time when people aim to make a fresh start. There’s no bigger or braver change you can make than starting your own business. The recent downward trend we’ve seen in new business start-ups is likely to be a response to the uncertain economic environment; however there are significant opportunities if you have the determination and drive and we will be there to support you every step of the way.”

Regional impact

There’s been a widespread decline across all regions of England but Yorkshire & The Humber and the South West are the most impacted, with both regions seeing about a quarter (26% and 24%) fewer start-ups in November 2016 compared to five years ago. Interestingly, the West Midlands has been the least impacted after a 16% decrease in new businesses, with London closely behind it, falling by 17%.

Like England, all regions in Wales have declined in the number of new start-ups, however 50% of them (11 out of 22 regions) have reduced by over a quarter, while almost a third of regions (7 out of 22) saw the number of new start-ups shrink by more than a third in 2016 compared to five years ago.

The Isle of Anglesey has been worst hit almost halving (50%) from 668 new businesses in 2011 compared to 331 in November 2016.

Amongst the top five worst hit regions are Gwynedd in second place at almost 43% and Pembrokeshire which declined by almost 41% over the last five years. These were closely followed by Ceredigion and Conwy with 40% and 37% fewer new businesses in November 2016 compared to five years ago.

The three least impacted areas are Merthyr Tydfil, which has stayed fairly static at 0.3%, following this Blaenau Gwent is the second least impacted reducing almost 8% from 364 new businesses in 2011, down to 335 in 2016. And finally Newport had almost 9% fewer start-ups, falling from 941, down to 861 five years later.

In contrast to England and Wales, the view in Scotland is much more encouraging, with almost half (14 of 32) of Scottish regions seeing growth in the number of start-up businesses over the last five years. This follows additional research from Bank of Scotland’s ‘How Scotland Lives’ study which showed that more than one-in-nine Scots anticipate starting a company on their own or with a partner, the equivalent to 12% of the Scottish adult population of 4,459,590.

The biggest success story is the Orkney Islands which leapt by more than a third (42%) from just 83 in 2011 to 118 in 2016. In December it was rated the best place to live in Scotland for its low unemployment rates, among other things, for the fourth year running (Bank of Scotland quality of life survey), the group of islands is clearly fostering an entrepreneurial spirit.

The Highland region also saw a fair increase of 15% from 1,180 new start-ups in 2011, rising to 1,354 in 2016. Aberdeenshire and Midlothian have both seen improvements of 10%, and Moray has increased by a little over 8% over the last five years.

Glasgow City ranked 15th declining by just over 1% in 2016 compared to 2011, with a total of 28,163 new businesses launched over that period, compared to the City of Edinburgh, which ranked 21st decreasing by almost 7% – a total of 24,134 start-ups during the same period.

The worst affected areas in Scotland can be captured in the bottom five regions which all saw reductions in the number of new businesses launched in 2016 compared to five years ago.

South Ayrshire, Dumfries & Galloway and Argyll & Bute all declined by over a fifth with 23%, 22% and 20% fewer new businesses, respectively, launched in 2016 compared to five years ago. East Ayrshire reduced by just under 18% and North Ayrshire fell by 17% making these the five worst affected regions in Scotland.

Table 1: Total Number of Start Ups in Last 5 Years – UK
Ranked by 5 Year % Change
UK Mainland Nov ’11 Nov ’16 5 Year Change 5 Year Change %
Scotland 29,132 28,222 -910 -3.1%
England 494,614 395,088 -99,526 -20.1%
Wales 23,195 17,089 -6,106 -26.3%
UK Mainland 549,028 443,805 -105,223 -19.2%
12 Month Rolled Data
Source:  BankSearch Business Start Ups

 

Table 2: Total Number of Start Ups in Last 5 Years – ENGLAND
Ranked by 5 Year % Change
England and regions Nov ’11 Nov ’16 5 Year Change 5 Year Change %
England 494,614 395,088 -99,526 -20.1%
West Midlands 45,093 37,864 -7,229 -16.0%
London 119,978 99,921 -20,057 -16.7%
East of England 53,301 43,025 -10,276 -19.3%
North West 55,247 44,297 -10,950 -19.8%
North East 16,502 13,210 -3,292 -19.9%
East Midlands 35,774 28,332 -7,442 -20.8%
South East 83,588 64,370 -19,218 -23.0%
South West 47,299 35,956 -11,343 -24.0%
Yorkshire and The Humber 37,828 28,113 -9,715 -25.7%
12 Month Rolled Data
Source:  BankSearch Business Start Ups

 

Table 3: Total Number of Start Ups in Last 5 Years – WALES
Ranked by 5 Year % Change
Wales and regions Nov ’11 Nov ’16 5 Year Change 5 Year Change %
Wales 23,195 17,089 -6,106 -26.3%
Merthyr Tydfil 364 363 -1 -0.3%
Blaenau Gwent 364 335 -29 -8.0%
Newport 941 861 -80 -8.5%
Swansea 1,667 1,424 -243 -14.6%
Neath Port Talbot 891 722 -169 -19.0%
Rhondda Cynon Taf 1,484 1,188 -296 -19.9%
Bridgend 927 742 -185 -20.0%
Torfaen 522 412 -110 -21.1%
The Vale of Glamorgan 1,014 800 -214 -21.1%
Carmarthenshire 1,493 1,157 -336 -22.5%
Monmouthshire 808 618 -190 -23.5%
Cardiff 2,975 2,243 -732 -24.6%
Caerphilly 1,083 784 -299 -27.6%
Flintshire 1,144 823 -321 -28.1%
Wrexham 969 650 -319 -32.9%
Denbighshire 744 493 -251 -33.7%
Powys 1,215 786 -429 -35.3%
Conwy 1,044 658 -386 -37.0%
Ceredigion 665 399 -266 -40.0%
Pembrokeshire 1,157 687 -470 -40.6%
Gwynedd 1,055 607 -448 -42.5%
Isle of Anglesey 668 337 -331 -49.6%
12 Month Rolled Data
Source:  BankSearch Business Start Ups
Table 4: Total Number of Start Ups in Last 5 Years SCOTLAND
Ranked by 5 Year % Change
Scotland and regions Nov ’11 Nov ’16 5 Year Change 5 Year Change %
Scotland 29,132 28,222 -910 -3.1%
Orkney Islands 83 118 35  42.2%
Highland 1,180 1,354 174 14.7%
Aberdeenshire 1,467 1,615 148 10.1% 
Midlothian 390 429 39 10.0% 
Moray 387 419 32 8.3%
East Renfrewshire 472 511 39 8.3%
Dundee City 699 736 37 5.3%
North Lanarkshire 1,292 1,356 64 5.0%
Angus 522 543 21 4.0%
East Lothian 523 533 10 1.9%
Shetland Islands 127 129 2 1.6%
Falkirk 661 667 6 0.9%
South Lanarkshire 1,620 1,629 9 0.6% 
Fife 1,676 1,683 7 0.4% 
Glasgow City 3,994 3,939 -55 -1.4%
Perth & Kinross 870 855 -15 -1.7%
West Lothian 849 813 -36 -4.2%
Western Isles 137 131 -6 -4.4%
Renfrewshire 925 867 -58 -6.3%
West Dunbartonshire 412 384 -28 -6.8%
Edinburgh, City of 3,547 3,301 -246 -6.9%
East Dunbartonshire 564 518 -46 -8.2%
Scottish Borders 702 636 -66 -9.4%
Inverclyde 337 303 -34 -10.1%
Clackmannanshire 217 194 -23 -10.6%
Aberdeen City 1,633 1,438 -195 -11.9%
Stirling 553 485 -68 -12.3%
North Ayrshire 709 587 -122 -17.2%
East Ayrshire 629 519 -110 -17.5%
Argyll & Bute 535 426 -109 -20.4%
Dumfries & Galloway 691 539 -152 -22.0%
South Ayrshire 729 565 -164 -22.5%
12 Month Rolled Data
Source:  BankSearch Business Start Ups

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