Business Start-Up Figures
2006

In March 2007, Barclays released estimates of business formations in England and Wales down to the district local authority level. This research monitor is based on these estimates and uses results for Lancashire, the North West and at the national levels.

The information from Barclays complements the official government data for the registration and de-registration of businesses for VAT purposes. The VAT data have been published in research monitors listed in the Lancashire Profile Business Activity Sectionand reveal much lower numbers of business start-ups. This is because of the turnover threshold necessary for VAT registration that excludes many new businesses from the VAT data that are picked up by the Barclays figures.

The Barclays estimates of business formation are obtained by grossing-up the number of new firms (not including those coming from other banks) by an estimate of market share. The estimates only cover firms operated through a business current account (75-80% of all new firms, a stock of circa.2.8 million in England and Wales). All estimates are rounded to the nearest 100, which reduces the quality of the results at the district level.

National and Local Perspective

The figures reveal that the number of small business start-ups increased by 12 per cent in 2006, a noticeable improvement on the 2005 figure. The 2005 result was however, noticeably lower than the 2003 and 2004 figures that were considered to be the product of exceptional boom years.

Table 1 details the results from 1995 onwards and reveals that the number for 2006 is not far behind the very high results recorded in 2003 and 2004.

The regional estimates for 2006 revealed that the 24% yearly increase in the North West was the highest increase of any region in England and Wales and was double the national rate (see Table 2).

The Lancashire Perspective

Table 2 also lists the results for the 12 districts in the Lancashire NUTS-3 area and the two unitary authorities of Blackburn with Darwen and Blackpool. The numbers and the percentage changes at the local authority level must be treated with caution due to the rounding to the nearest 100.

In general terms, the Table indicates some noticeable increases in East Lancashire authorities such as Burnley, Pendle and Ribble Valley. The two neighbouring central Lancashire authorities of Chorley and South Ribble also recorded significant yearly increases.

The 17% overall increase for the Lancashire NUTS-3 area is somewhat subdued in comparison to the North West rate of change, but is well ahead of the national increase of 12%. Reductions in Preston and Wyre, along with no recorded changes in Fylde and Hyndburn were responsible for the Lancashire figure being below the regional average.

Table 3 details business formations in England and Wales at the national level by broad industrial sectors. The percentage sectoral changes for 2005 to 2006 indicate that the 'Retail' and 'Property services' recorded the highest yearly growth rates (both up by 21%). In contrast, the 'Health education & social work' sector was subdued with growth of just 1%. This may be the result of some tightening of public expenditure in this sector during the period in question.