Page last updated at 11:07 GMT, Tuesday, 23 June 2009 12:07 UK

London business failures 'worst'

Pound coins
Most computers will open PDF documents automatically, but you may need to download Adobe Acrobat Reader.

New businesses in London are more likely to fail than anywhere else in England, a report by the London Assembly has claimed.

Businesses in London have a lower one-year and three-year survival rate than any other English region, it said.

The assembly's economic committee said Mayor of London Boris Johnson needed to do more for entrepreneurs.

A spokesman for the mayor said he welcomed any positive suggestions about how to help them further.

The report cited government figures which showed 91% of London's businesses survived their first year, with the South West region the highest at 93%

But London has the lowest three-year survival rate, with 67% still in existence after three years.

Investment in business start-ups should be a high priority for the mayor
Dee Doocey, assembly member

Most other English regions have rates of around 70% to 73%, with a high of 74% in the South West. Northern Ireland has the highest three-year survival rate at 79%.

But the government findings appear to conflict with a 30-year piece of academic research carried out by Professor David Storey of Warwick Business School which shows the North East has been consistently at the bottom of the league for both new business start-ups and the failure of new businesses.

The Warwick study's co-author, associate Professor of Enterprise Dr Francis Greene, said: "Sole traders and partnerships were not excluded from our study, official statistics only look at limited companies."

Dynamic economy

The assembly said that while Mr Johnson recently made a £3m loan fund available to new businesses, he had made cuts to other programmes designed to support new enterprises.

The Business London Programme, which provides mentoring, had its budget cut by 40%, it said, and funding for new businesses worth £28.6m had been abolished.

Liberal Democrat Assembly member and committee chairwoman Dee Doocey said: "Investment in business start-ups should be a high priority for the mayor.

"But major programmes which provided support have had funding cut and millions of pounds of grants previously available have also been abolished."

A spokesman for the mayor's office said: "London's dynamic economy has long had the highest rate of business start-ups in the UK, but the risky nature of starting a businesses means that London has also long had the highest rate of business failure.

"However, there is no room for complacency, especially in the downturn, which falls particularly hard on struggling entrepreneurs.

"The Economic Recovery Action Plan announced over £23m new support for businesses, much of which is targeted at small and medium sized enterprises."

Print Sponsor

Emergency loan fund 'too small'
12 Jun 09 |  London
Optimism 'rises' among businesses
29 May 09 |  London
Mayor launches economic plan
17 Dec 08 |  London

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific