Insolvency rates high in borough

9:15am Friday 16th May 2008

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WEYMOUTH and Portland has one of the top 30 insolvency rates in England, according to research.

The South West Economic Review by Plymouth Business School found 0.35 per cent of individuals in the area being declared bankrupt or agreeing individual voluntary agreements (IVAs) to resolve problems with their creditors.

Deputy manager of Weymouth Citizens Advice Bureau Helen Jones said debt has always been one of their major areas of work.

She said: "I think we're beginning to see the snowball effect starting with people who managed with their mortgages up until now. The general cost of living is also a problem.

Mrs Jones said she would advise people not to do anything without taking independent advice, especially regarding IVAs, where people agree to pay proportions of their debt at regular intervals.

She added: "Bankruptcy can be more appropriate than IVAs for some but not for anyone who owns their own home.

"If it appears too good to be true it probably is and I can not warn people enough not to be drawn into an IVA without getting advice as they may choose the wrong products."

The report says negative influences on insolvency include level of earnings, the percentage of old people and the proportion of the working age population in the public sector, excluding the armed forces.

Weymouth and Portland Borough Council's Employment and Prosperity spokesman Geoff Petherick said he was surprised to see the area listed so high.

He said: "One of the reasons I became a councillor is to do something about the wage rates as we have one of the lowest in the country."

"There is millions being invested in regenerating the area and with Sunseekers increasing their number of employees in the area we are looking very prosperous."

The report predicted there will be a rise in both company and individual insolvency due to the economy heading into an economic downturn.

Within the South West, Weymouth and Portland has the 11th highest insolvency rate with Plymouth highest and Bournemouth ninth.

Operations manager for Business Link, Ian Girling, is part of a team that provides information, advice and support to businesses in Dorset.

He said: "We would urge sensible caution to businesses and not to panic or talk ourselves into a recession.

"It's about taking a measured approach so we advise people not to over commit and make sure they think over any new ventures carefully.

"There's an awful lot going on to help them maximise the benefits of the Olympics both before and after the games."