NOVEMBER FIGURES: Southern and Thames Valley R3 chairman Garry Lee
Corporate insolvencies have reached their second highest level since before the pandemic, according to R3, the trade body for restructuring and insolvency professionals in the South and Thames Valley.
It has warned of a ‘perfect storm’ of conditions as increasing numbers of businesses ‘buckle’ under the strain of more than two and a half years of economic turmoil.
The comments come after the publication of November 2022 personal and insolvency statistics for England and Wales.
R3’s analysis of data from The Insolvency Service shows:
- Corporate insolvencies increased by 4.2% in November 2022 to a total of 2,029 compared to October’s total of 1,948. They also increased by 21.1% compared to November 2021’s figure of 1,676, and by 34.8% compared to November 2019’s total of 1,505.
- Personal insolvencies decreased by 0.6% to 10,465 in November 2022 compared to 10,528 in October. They were 11.4% higher than November 2021’s figure of 9,390, and 8.9% from November 2019’s total of 9,606.
Garry Lee, chair of R3’s Southern and Thames Valley region, said: “What we’re seeing is a perfect storm of creditors pursuing unpaid debts and directors choosing to close down their businesses – either before this choice is taken away from them or because they have simply run out of road.
“An increasing number of businesses are buckling under the strain of more than two and half years of economic turmoil.
“Companies have been battered by the pandemic, rising costs, reduced spending and increasing inflation, and a growing number are now turning to an insolvency process to resolve their financial distress.”
The figure of 2,029 corporate insolvencies in November is the second highest since before the pandemic. The highest was in March of this year when there were 2,120 corporate insolvencies.
The month-on-month rise in corporate insolvency numbers was mainly driven by an increase in Compulsory Liquidations and Administrations (increased by 46 and 27 respectively compared to October), while Creditor Voluntary Liquidation (CVL) numbers also increased.
Turning to personal insolvencies, the monthly reduction was driven by a fall in Individual Voluntary Arrangement numbers. However, the numbers for this process were higher than last year and 2019.
Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, said “Our message to anyone in the South and Thames Valley worried about money or their business is to seek advice as early as possible.
“While it’s incredibly hard to voice your fears about your finances or about a business which you own or run, having that conversation with a qualified and regulated advisor when your worries are new will lead to better outcomes than if you’d waited until your problems became more severe.
“Most R3 members will give prospective clients a free consultation so they can understand more about their situation and outline the potential options for resolving it.”
ENDS
