INSOLVENCY WARNING: Southern and Thames Valley R3 chairman Garry Lee
Businesses in the South and Thames Valley are being warned to keep watch for signs of financial distress after corporate insolvencies hit a post pandemic high.
R3, the insolvency and restructuring trade body, called for vigilance after its analysis of the latest statistics from The Insolvency Service.
There were a total of 2,457 corporate insolvencies in England and Wales in March – the highest for any month since the onset of the Covid pandemic in 2020.
The figures revealed month-on-month rises of nearly 40% for both corporate and personal insolvencies.
The statistics for England and Wales shows:
- Corporate insolvencies increased by 37.7% in March 2023 to a total of 2,457 compared to February’s total of 1,784, and increased by 15.9% compared to March 2022’s figure of 2,120.
- Corporate insolvencies increased by 145.9% from March 2021’s total of 999 and by 99.3% from March 2020’s total of 1,233.
- Corporate insolvencies also increased by 55.4% compared to pre-pandemic levels in March 2019 (1,581).
- Personal insolvencies increased by 38.9% in March 2023 to a total of 11,438 compared to February’s total of 8,237, and decreased by 1% compared to March 2022’s figure of 11,554.
- Personal insolvencies increased by 4.4% from March 2021’s total of 10,954 and increased by 46% from March 2020’s total of 7,832.
- Personal insolvencies also decreased by 6.4% compared to pre-pandemic levels in March 2019 (12,216).
Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, said: “The latest figures are beginning to reveal the impact of the attritional business environment over the past three years.
“The number of corporate insolvencies hit their highest for any single month since the outbreak of the pandemic in March 2022 and, indeed, were significantly higher than all months in 2019.
“The true scale of the impact of the pandemic, the withdrawal of Covid business support, economic uncertainty and pernicious inflation is being laid bare.
“Costs continue to rise at a time when consumers are cutting back on discretionary spending, and when staff are requesting pay rises to cover their bills.
“With the Government’s Energy Bill Relief Scheme ending at the end of March, many businesses will be facing further increases in costs at a time when they can ill-afford them.”
Garry, who is an Associate Director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “Directors in the South and Thames Valley need to be vigilant about the signs of financial distress.
“The key is to seek advice as soon as they spot issues with their business or begin to worry about its finances.
“If stock is starting to pile up, cashflow is an issue, or the business is having problems paying rent, staff or suppliers, now is the time to seek advice from a qualified and regulated source, rather than further down the line when these issues have evolved into problems.”
The rise in corporate insolvencies was driven by increasing numbers of Creditors’ Voluntary Liquidations.
The monthly increase in personal insolvencies was mainly due to rises in Individual Voluntary Arrangement and Debt Relief Order numbers.
ENDS
