London remains the prime location for STARTING a business venture

A recent study revealed that the top unitary districts to fund a startup remain in London and the Southeast, despite efforts to bridge regional disparities.

Westminster and Camden rank as the best unitary districts in the UK for startups, based on a study conducted by a merger and acquisition advisor.

Webacquisition.com conducted a study comparing unitary districts based on the number of new enterprise births, percentage of Year-on-Year business counts growth, business survival rates, average Gross Domestic Household Income (GDHI) per hour worked, and other key indicators.

Based on these indicators, Camden and Barnet were awarded a credit score of 80 and 70.5 out of 100 respectively.

On the opposite end of the spectrum, Merthyr Tydfil in Wales and Inverclyde in Scotland ranked the lowest, with a 40 and 40.11 credit score respectively.

In the study, out of the 20 best unitary districts to fund a business, 10 were based in London. This speaks to the enduring funding gap between the North and the South, despite government efforts to narrow it.

Levelling up or down?

There were 7,145 new businesses in London's Westminster, the top unitary district for funding startups in 2022. Business survival rates in this region are impressive at 46.3%, making it an affluent and business-friendly region.

As the only non-London district in the top 20, Birmingham in the West Midlands ranks fourth. In addition to having a 26.32% business survival rate, it has a 70.32 credit score.

Alternatively, Merthyr Tydfil in Wales has a YoY growth of -0.49% and a credit score of 40.

Across the eight-year period of Levelling Up, a government initiative aimed at bridging regional economic disparities, results have been slow.

In this year's Levelling Up fund, more than 100 projects were funded.

According to a recent Guardian report, 95% of local authorities who received funding last year couldn't spend it all.

Due to bureaucratic hurdles and a hollowing out of council expertise, funds were handed over too late.

The Startups 100 Index exclusive data confirms this pessimism - London startups receive an average amount of £15m in early-stage funding, eight times the average for UK startups.

As a result of this disparity, startups are having difficulties scaling and staying sustainable. According to a report by Nucleus, 55% of SMEs believe regional inequalities prevent them from hiring highly skilled workers. Meanwhile, 47% of respondents said regional funding gaps are impacting their business's financial health.

According to the ONS, inflation will continue to hover around 6.7% until September 2024, making access to funding more crucial than ever for small businesses in poorer areas.

Maintaining stability

The Autumn Statement will be delivered by the Chancellor on 22 November. During the speech, the government's macroeconomic policies will be outlined, which could have a significant impact on the economic environment that SMEs face as they struggle to survive.

Small businesses will need to find creative ways to raise money and cut costs as corporate tax remains 25% and banks scale back funding support for them.