Bradford businesses are being urged to improve their debt collection after the district was branded an 'insolvency graveyard'.

The city has the third highest rate of business failures anywhere in the UK, behind only Manchester and Bolton.

And today business support lawyers in the city claimed a reluctance to get tough with customers was partly to blame for the problem.

Ian Longbottom, operations director at Bradford business support lawyers LCL Law, said many firms needed to clamp down on their customers.

It followed the publication of an annual review of company insolvency in which it emerged 3.49 per cent of firms in Bradford failed during 2001.

The survey by business recovery professionals R3 branded large areas of the north an 'insolvency graveyard', and named Bradford as a blackspot. Bolton had the worst rate at 3.99 per cent, while South West London averaged just 0.96 per cent and Lancaster and Canterbury 1.09 per cent.

Mr Longbottom said the high rate of failures in Bradford was not necessarily a reflection of poor management at the firms and could be due to the large amount of entrepreneurial activity that has taken place.

But he said companies could safeguard their futures by making improvements to cashflow, cash collection and customer payment behaviour.

"It is not always the businesses' fault that they have these problems," he said. "We have known very good businesses that seem financially strong that go into insolvency not because they have been badly managed but because they have been too trusting."

Mr Longbottom said many smaller firms in the district had suffered due to the effects of larger PLCs going into liquidation and failing to pay unsecured creditors.

But he said companies should not be afraid to take a tough stance with their customers and urged them to use late payment legislation to educate their customers to pay to their terms of trading.

If court action is threatened, he said, that action should be carried out if necessary.

"If companies are hard but fair, and provided the service that they are providing is good, then the clients will always come back," he said.

LCL Law is to hold a seminar on Wednesday, July 16, at the Midland Hotel in Bradford to discuss late payment legislation and early warning signs of insolvency. For det-ails, contact Andrew Langton on (01274) 737486.