FIGURES have shown a huge surge in the number of businesses filing for insolvency compared to last year, with many firms kept afloat by government funding fear they will go insolvent coming out of lockdown.

Analysis conducted by the BBC’s Shared Data Unit shows around 5,000 companies have filed for insolvency since March, down compared with 6,500 last year, as government funding meant they went into effective hibernation.

In Portsmouth, 13 businesses filed for insolvency during lockdown between March 24 and June 30 compared to just six last year.

In Fareham seven did, compared to three last year, in Gosport two did compared to one, and in Havant eight did compared to just one last year.

Companies working in information and communication had seen the largest increase in insolvencies.

In separate research, Begbies Traynor said 527,000 businesses were in significant financial distress at the end of June and the true impact would only be seen in months to come.

Partner Julie Palmer said: ‘This crisis will force many zombie companies out of business. While these were clinging on to survival prior to the pandemic, many will now have become simply unviable due to high levels of debts and poor sales.’

This news comes despite the government spending around £160bn in support for businesses.

Economic support has ranged from loans to business rate relief, tax deferrals, top-up grants, a future fund for blue chip companies and the Bank of England issuing bonds to corporations.

However, it is not all doom and gloom, as the research also found a resurgence in new businesses being set up during lockdown, with around 180,000 companies registering in the UK from April to June.

In Portsmouth 408 new businesses were registered, 226 in Havant, 174 in Fareham and 78 in Gosport.

One of those was Sherlock’s, a bar in Clarendon Road, Southsea, which opened on July 4. It was set up by Richard Peckham and Debbie Moorhead.

Richard said: ‘All our friends and family thought we were a bit mad to set up a business right now but we felt that it was a good time as people were out of their normal habits. It has been really good so far.’

Richard also runs a marketing company called Portsmouth Flyers and Debbie is a hairdresser.

Richard said: ‘Both of those jobs came to a grinding halt during lockdown so it gave us six clear weeks to get the bar ready.’

Source: portsmouth.co.uk