As the summer recedes into the past many will have fond memories of bucket-and-spade holidays with family and friends in one of Britain's many seaside resorts.

But the jollity masks a grim reality for many of those living in our coastal towns. For them, unemployment, poverty industrial decline are the true markers of life beside the seaside.

A report last week noted that in many such places personal bankruptcies – a good indicator of relative economic health – are among the highest in the country, reaching as high as twice the national average.

Using official statistics accountants UHY Hacker Young reported that while inland Stoke on Trent topped the insolvency poll, Scarborough was in second place out of 347 local authorities with 47.8 insolvencies per 10,000 adults, compared with the UK average of 25. It is followed by other well-known resorts including Torbay, Blackpool, Weymouth and the Isle of Wight. Seaside towns represent 7 out of the top ten rankings for the level of personal bankruptcy and 15 out of the top 20.

The sorry state of affairs has not gone unaddressed, As long ago as 2012 the Government launched the Coastal Communities Fund to help promote tourism and regenerate historic sites. The aim, according to the official statement, was 'to invest in seaside towns and villages, helping them achieve their economic potential, reduce unemployment and create new opportunities for young people in their local area.'

A report by the House of Lords select committee on seaside towns and communities earlier this year pointed out that some resorts – Brighton and Bournemouth are mentioned – are successful examples of 'reinvention'. They have invested in smartening up and offering high quality experience for the holidaymaker.

But others have struggled. Blackpool remains by far the most popular UK resort, hosting nearly 19m visitor nights compared with its nearest rival, Brighton with 11m, even so, the committee said, 'serious deprivation persists'.

The collapse in sterling and resulting increase in ‘staycation’ holidays has had little tangible impact on traditional UK holiday destinations which are still 'a long way from recovering from the decades of contraction in their traditional coastal industries such as tourism, ship-building and fishing,' according to UHY Hacker Young. They have largely failed to replace traditional industries with faster growth sectors such as financial services and technology.

It's a vicious circle: with a few exceptions, most of the poorer performing seaside towns lack universities, the report says, making them less attractive destinations for businesses looking for a highly skilled workforce. In turn, the weakness of the local economies leads to more skilled young professionals to move to higher growth areas, leaving behind a population more heavily weighted with pensioners.

The report's author, Peter Kubik, told LocalGov that solutions suggesting traditional seaside towns can turn to new industries to generate wealth are likely to be misplaced.

There is only one real solution for the Scarboroughs, Blackpools and Eastbournes, he says: creating jobs by upgrading their traditional holidaymaking offer.

And that means resources. 'Increased funding from central government, far in excess of the levels they are currently getting, could be key to tackling local economic decline in many of these areas,' he says.

Now that government thinking appears to have abandoned the free market 'cut and cut again' approach to public spending, it may be a time to look again at the support given to the traditional seaside town.

But there is another ingredient needed to breathe new life in the coastal resorts, however: giving them the powers they need to devise effective regeneration strategies.

In their report the Lords argue that 'top down solutions imposed from Whitehall and afar' should be avoided. Those best placed to build the seaside towns of the future, they say, are local people who want the freedom to grow and the right support, sometimes financial, sometimes not, to help them develop. 'They represent the seaside’s best hope,' the Lords said.

A combination of investment and greater local democracy: a twin strategy to restore the glory days of the British coastal holiday resort. As seaside entertainment veteran Punch might say: 'That's the way to do it!'