ALMOST 1,700 Bournemouth businesses have found themselves in “significant” financial distress in the past three months.

The figure is up by eight per cent on last year – but is set to rise even more when government support ends and the courts catch up with a backlog of insolvencies.

Analysis by insolvency firm Begbies Traynor found the pressure was hardest on the property sector, bars and restaurants.

It found there were 1,692 Bournemouth businesses in significant distress between July and September. The figure was up three per cent on the previous quarter.

Begbies says a backlog of court cases has prevented many county court judgements (CCJs) and winding-up petitions being issued. Only 10,045 CCJs were lodged nationally between April and May, compared with 26,244 last year. There were only 101 winding-up petitions between April and May, a fall of 90 per cent on the same period last year.

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “Bournemouth businesses continue to face multiple challenges – from unpredictable consumer demand to restrictions on the way they offer their services, as well as managing the direct health impact of the pandemic on their workforce. This is undoubtedly taking its toll, as reflected in these regional figures.

“It is noteworthy that the number of businesses in significant distress has grown substantially in the last three months, even with court capacity significantly reduced due to the pandemic.

“As such, there could be a significant number of insolvencies when the courts do get back to anywhere near normal capacity and attempt to clear the backlog of pending cases. This, combined with the end of the furlough scheme and other government support measures, is likely to have a material impact on the business failure rate.

“Unfortunately, a combination of a grim economic data, and very poor trading conditions, particularly in the most vulnerable sectors such as hospitality will take its toll and this is expected to feed through to Q1 2021 as restrictions continue.”

Nationally, Begbies’ Red Flag Alert research for the third quarter of this year showed 557,000 businesses in significant distress, six per cent up on the same period last year.

Businesses in “significant” distress are those with problems such as CCJs of less than £5,000, or those which have been identified by the Red Flag risk scoring system, based on indicators including working capital, liabilities, retained profits ad net worth.