One in 10 firms say there is a risk they will go bust because of coronavirus crisis as 40 per cent warn they have less than six months worth of cash reserves left
- The Office for National Statistics published latest results of its business survey
- It showed one in 10 firms estimated they had a ‘moderate’ risk of insolvency
- Some four in 10 said they had less than six months’ worth of cash reserves left
- One in 10 workers remain on furlough leave ahead of scheme winding down
One in 10 UK firms have said they are at risk of becoming insolvent because of the coronavirus crisis with 40 per cent admitting they have less than six months worth of cash reserves in the bank.
The Office for National Statistics today published the latest results of its Business Impact of Coronavirus Survey and it suggests large swathes of the British economy are still struggling to get back on their feet.
The numbers revealed some 10 per cent of firms have estimated they are at ‘moderate’ risk of being unable to pay their bills in the near future.
Just one per cent of businesses said their risk of insolvency was ‘severe’ but almost half of all companies – 45 per cent – said they faced at least a low risk of going bust.
Just shy of one third (32 per cent) said there was no risk of them becoming insolvent.
Meanwhile, the ONS data showed that 41 per cent of businesses have less than six months worth of cash reserves while four per cent said they had zero cash reserves.
The Office for National Statistics’ latest business survey showed one in ten firms have estimated they are facing a ‘moderate’ risk of insolvency
The numbers also show 12 per cent of workers are still on furlough as Rishi Sunak, pictured in Scotland on August 7, aims to close the scheme by the end of October
The numbers also suggest the return of furloughed workers to their jobs continues at a slow place with some 12 per cent of the overall workforce still on furlough leave.
Of businesses which are currently trading, some 11 per cent of their workers remain on furlough.
But for businesses which are temporarily closed or which have paused trading the numbers are much higher, with 71 per cent of workers still at home.
The numbers are likely to spark concern in the Treasury as Chancellor Rishi Sunak looks to wind down the furlough scheme by the end of October.
The survey also revealed that many firms are still suffering from massively reduced revenues despite lockdown having been eased.
Almost a quarter of businesses (23 per cent) said turnover was down by up to 20 per cent when compared to what is normally expected at this time of the year.
Some 17 per cent said their turnover was down somewhere between 20 per cent and 50 per cent while one in ten (11 per cent) said their turnover had decreased by more than 50 per cent.
However, the survey showed consumers are continuing to return to all retail locations, with footfall numbers up across the board.
Overall footfall was at 68 per cent of its level between August 10-16 when compared to the equivalent week last year.
That number is the highest recorded since the week beginning March 16 this year – the week before Boris Johnson imposed lockdown.
Some 12 per cent of the workforce are still on furlough, according to the data published by the ONS
Footfall has gradually increased since non-essential shops were given the green light to reopen in England from June 15.
Retail parks are now at 85 per cent of footfall compared with the same day a year ago while shopping centres and high streets are both at just over 60 per cent.
The latest business data came as the ONS also revealed that 765,000 young people aged 16 to 24 in the UK were not in education, employment or training (NEET) in April to June this year – some 11 per cent of all young people.
That number represents a decrease of 28,000 compared with the same period in 2019 and was also down by 6,000 on the number recorded in January to March.