Half of Milton Keynes start-ups at risk amid coronavirus crisis

Half of start-ups and growing businesses in Milton Keynes are at risk of failing due to the coronavirus crisis, new research shows.

That is according to a study of almost 30,000 new and growing businesses in the UK by analyst Beauhurst, which has warned any national financial recovery will be impeded if these "economic powerhouse" firms are not targeted with support.

Beauhurst analysed various factors to determine the risk facing each business, such as whether their premises had been closed, social distancing had prevented them providing a product or service, or they were having to offer their products at a reduced cost.

Of the Milton Keynes firms tracked by Beauhurst, 50 per cent were classed as 'at risk' in April.

That includes 8 per cent at severe risk, meaning they have suffered serious disruption to their operations, and 10 per cent that were critical, and facing an "existential threat" to their ability to continue trading.

The remainder were at moderate risk – although that means they have still suffered disruption "beyond mere inconvenience".

The data tracks start-up businesses alongside so-called scale-ups, which are established companies that have moved beyond their initial phase to focus on growth.

However, some businesses could see a positive impact from the pandemic, if they are able to grow their operations or have otherwise seen a surge in demand, with tech companies faring particularly well.

In Milton Keynes, 13 per cent of businesses fell into this category, compared to 15 per cent across the UK.

Henry Whorwood, head of research and consultancy at Beauhurst, said: "The companies we track are the UK’s economic powerhouse. They employ millions of people, have received billions in investment and grants, and operate in sectors as diverse as AI and catering.

"It’s crucial to make sure the interventions proposed by the Government reach these companies."

In April, the Government launched its Future Fund scheme to provide loans of between £125,000 and £5million to companies that may not be able to access other government support schemes because they are yet to turn a profit – provided they secure equal funding from private investors.

But Beauhurst said the scheme would be difficult to access for most firms, with investors “wary of putting money into ambitious companies in return for equity right now”.

It has called on the Government to instead reward employers who retain staff in active employment instead of furloughing them, and to make changes to research and development tax credits to promote investment in innovation.