Newly-released government figures show the number of businesses registered in Barnet has declined by almost 20 per cent since 1994 by far the worst figure in London.

Council officials have struggled to account for the decrease particularly as employment levels in the borough have continued to grow. A council spokesman said it was a 'complex issue' as the number of businesses paying non-domestic rates the business equivalent of council tax has actually increased in recent years with shop vacancies falling. This suggests that non-Barnet based companies are filling the gaps left by the failure of small local businesses.

Michael Brookes, an economics lecturer at Middlesex University in Hendon, has examined the figures. He said: "It would appear that the fall in the number of businesses in Barnet has been fuelled by a significant increase in the number of business failures, presumably amongst small businesses.

"Now it would probably be a research project on its own to establish the true causes of this, but clearly issues such as property prices and lack of parking can't have helped.

"For the last three years there has been a significant increase in business deregistrations in Barnet, in the region of 40 per cent, a pattern which is not repeated in any of the surrounding boroughs.

"This would fit in nicely with the property price argument, but whether that is the cause or it is simply coincidence would take time to establish. It's fairly strong evidence although it is fairly anecdotal."

The figures, released by the Department of Trade and Industry, show that one business sector in Barnet has bucked the trend the one that has benefited most from the booming property market. This sector, known as 'K' in business literature includes lawyers, accountants, property developers and estate agents and has seen an increase in the number of businesses of almost a quarter, largely in line with the rest of the capital.

This has led to speculation that the huge rise in property prices and business rates could be starting to choke the economy in Barnet.

The average price of a home in the borough is now £250,000 and business rates are set by the Government and linked to property prices as, of course, are business rents.

Barnet businessman Usama Siddique, believes that a combination of high property prices, high rates and business rents, and a lack of parking spaces in our town centres are responsible for the decline, which he said he first noticed in 1994.

Mr Siddique, who is the franchise holder for McDonalds in Barnet and North Finchley, said: "Business rents in Barnet are phenomenal. They are crippling." He said that this may be why there are so many empty shops and charity shops in the borough, which get discounts on their rates and rents.

"If the high street is run down I wouldn't ever if I was an accountant or solicitor like my customers to come into an area which is run down.To attract businesses you have to attract them into the right environment. Even though the high street is only for shops, it affects other businesses.

"Also, if they wanted to bring their businesses in the borough where are they going to park?

"What happens is that your spending power decreases because everything is sucked up by the mortgage."

He also said that Barnet Council has 'poor long-term vision'. "They have to hire people who are experts in business analysis. They don't look at it from the business perspective. When you deal with them they don't understand. They do not have people who have business and systems analysis who work out what importance yellow lines and CPZs will have on businesses.

"That's very, very short-term."

June 19, 2002 17:30