R3 in the South and Thames Valley responds to October 2021 insolvency statistics:

INSOLVENCY STATISTICS: Southern and Thames Valley R3 chairman Garry Lee

INSOLVENCY STATISTICS: Southern and Thames Valley R3 chairman Garry Lee

Monthly corporate insolvency figures have increased by nearly two-thirds on the year before, warns the insolvency trade body for the South and Thames Valley.

R3 – the association for insolvency and restructuring professionals – said the newly published statistics for October 2021 acted as a reminder for businesses to seek early advice at the first sign of difficulties.

The figures from The Insolvency Service for October 2021 in relation to England and Wales showed:

  • Corporate insolvencies increased by 63.6% from 864 in October 2020 to 1,405 in October 2021. Month on month, they fell by 3% from 1449 in September 2021 to October 2021.
  • Personal insolvencies fell by 3% to 9,668 in October 2021 compared to 9,966 in September 2021, and were 19.2% lower than October 2020’s figure of 11,960.

Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, said: “The business climate is still harsh. Economic growth is slowing, costs are rising, and consumer confidence is falling.

“Although consumer spending is higher than it was this time last year, rising COVID case numbers and sharp energy price rises have meant many businesses aren’t seeing the benefits of this.

“As we move closer to Christmas, we would urge company directors in the South and Thames Valley to be mindful of the signs of business distress, which include cashflow issues, problems paying staff or suppliers and increasing stock levels.”

The month-on-month fall in corporate insolvencies from September to October was driven by a reduction in the number of Creditors’ Voluntary Liquidations.

However, there were still twice as many companies entering this type of procedure than the same time last year and nearly 20% more than in 2019.

Garry, who is an associate director in the recovery and restructuring services department at accountancy firm Smith & Williamson’s Southampton office, added: “This would suggest that there are still a fair number of company directors who are choosing to close their businesses after deeming post-pandemic success unlikely.”

Although showing a leap from October 2020 to 2021, overall corporate insolvencies were still 5% lower than in October 2019 when they stood at 1,485.

This may suggest that the Government’s support measures have helped prevent the economic consequences of COVID from translating into even higher levels of corporate insolvency.

For personal insolvencies, the month-on-month and year-on-year falls were driven by a reduction in all types of procedure.

Garry said: “Anyone who is concerned or anxious about their business or personal finances should seek help from a qualified and regulated advisor as soon as possible.

“Early advice gives you more potential options and more time to make a decision about what’s best for you.

“Most insolvency professionals will give you an hour of their time for free to explain your situation and outline and discuss your potential options.”