REACTION: Southern and Thames Valley R3 chairman Garry Lee has urged any directors or business owners spotting signs of financial distress to seek support immediately from a regulated and qualified source.
Latest figures for England and Wales from The Insolvency Service show that:
- Corporate insolvencies decreased by 15.3% in June 2023 to a total of 2,163 compared to May’s total of 2,553, and increased by 27.4% compared to June 2022’s figure of 1,698.
- Corporate insolvencies increased by 79.4% from June 2021’s total of 1,206, by 191.9% from June 2020’s total of 741, and 47.5% compared to June 2019 (1,466).
- Personal insolvencies decreased by 18.7% in June 2023 to a total of 8,119 compared to May’s total of 9,990, and decreased by 22.9% compared to June 2022’s figure of 10,534.
- Personal insolvencies decreased by 17.6% from June 2021’s total of 9,852, decreased by 2% from June 2020’s total of 8,282, and decreased by 16.5% compared to pre-pandemic levels in June 2019 (9,722).
Garry Lee, chair of the Southern and Thames Valley region of R3, the UK’s insolvency and restructuring trade body, responds to the publication of the June 2023 personal and corporate insolvency statistics for England and Wales.
He said: “The monthly fall in corporate insolvencies is driven by a reduction in Creditors’ Voluntary Liquidations, but numbers for this process are still higher than they were pre-pandemic as a sizeable number of directors are still choosing to close their businesses while the choice is still theirs to make.
“Despite the monthly fall in corporate insolvencies, levels are higher than they were this time last year. They are also well above what they were this time two, three and four years ago, as the hangover from the pandemic combines with a challenging trading climate caused by a number of economic issues.
“Firms in the South and Thames Valley are trading in a time of cautious consumer spending and rising costs, which are hitting margins and profits hard.
“Directors expect costs and wages to rise further as the year goes on, and if these don’t translate into more demands for goods and services, it could be the final blow for those businesses that are just managing to survive.
“Rising interest rates are another potential challenge, as that will make the cost of borrowing more expensive and may price some firms out of the survival funding they’ll need.
“Given the economic and business climate, we urge directors to be alert to the signs of financial distress, and seek advice if they find themselves facing issues like rising stock levels, problems with cashflow or difficulties paying staff, taxes or suppliers.”
Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “It is really hard to talk about your concerns with money.
“But I would encourage anyone with financial concerns in the South and Thames Valley – whether they’re personal or business ones – to be brave and seek advice from a qualified and regulated source as soon as possible.
“There are a number of options out there for resolving personal or corporate financial issues, but these options dwindle the more time elapses before the problem is addressed.
“Seeking advice when your worries are new – or at least fresh – nearly always results in a better outcome than if you’d waited until the problem became more severe.”
