ALMOST 590 companies in Milton Keynes are now classed as being in “significant” economic distress, according to the latest figures from corporate recovery specialist Begbies Traynor.
Ongoing economic uncertainty, coupled with the impending impact of the tax, National Insurance and National Minimum Wage increases announced in the October 2024 UK Budget, are all contributing to business stress in the town, with 589 at risk of economic failure. This represents a quarterly increase of 0.9%, and an annual rise of 60.9%, says the practice’s quarterly Red Flag Alert report, which monitors the financial health of companies across the UK.
Looking at the sector picture, there are 107 support services businesses in significant distress, making it the most troubled sector in Milton Keynes.
There have also been significant increases in the number of construction and real estate & property businesses facing difficulties, with these industries seeing annual increases of 120.6% and 105.6% respectively.
Nationally, the latest Red Flag Alert research for Q4 2024 recorded 654,765 businesses in significant distress, which is 21.3% higher than the same period in 2023. In addition, there has been a worrying surge in the number of businesses in the UK entering ‘critical’ financial distress in the final quarter of 2024, rising by 50.2% to 46,853 companies.
Julie Palmer, partner at Begbies Traynor in Milton Keynes, said: “Even at this very early stage, the outlook for the rest of 2025 is challenging and many companies are clearly struggling to adapt to the compounding issues they are facing. Unfortunately, there is no easy fix, which will be very unsettling for businesses that are struggling to tread water already.
“For many companies which were already dealing with rising operational and borrowing costs, the increase in National Insurance contributions and the National Minimum Wage announced at the last UK Budget could result in further financial strain at a time when confidence is already low.
“So, in the absence of a reduced tax burden and a strong economic recovery, unfortunately it is likely that the number of insolvencies will continue to rise in 2025 as firms struggle to cope with a perfect storm of rising costs, financial instability and fluctuating market conditions.”
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