R3 responds to insolvency statistics

The rise from 2,032 in November 2022 to 2,466 for the same month this year – an increase of 21.3% - was revealed in newly published figures for England and Wales.

R3’s analysis of data from The Insolvency Service also found that corporate insolvencies were at their highest annual total since 2009.

For 2023 so far, the figure stands at 23,153 – already outstripping 2022’s total of 22,129 with a month of the year still remaining.

The latest statistics for England and Wales show:

• Corporate insolvencies increased by 6.4% in November 2023 to a total of 2,466 compared to October's total of 2,317. They increased by 21.4% compared to November 2022's figure of 2,032.
• They increased by 47.1% from November 2021's total of 1,676 and by 63.9% compared to pre-pandemic levels in November 2019 (1,505).
• Personal insolvencies decreased by 16.6% in November 2023 to a total of 8,247 compared to October's total of 9,887. They decreased by 21.3% compared to November 2022's figure of 10,478.

Neil Stewart, chair of R3’s Southern and Thames Valley region, including Buckinghamshire, said: “The monthly and year-on-year rise in corporate insolvency levels is driven by an increase in both Creditors’ Voluntary Liquidations, as more directors choose to close down their businesses while that choice is still theirs, and Compulsory Liquidations, as creditors vigorously pursue debts they are owed as they attempt to balance their own books.

“But the figures published today also take 2023’s corporate insolvency figures to the highest annual total since 2009.

“The fact that corporate insolvency numbers have reached a 14-year high is partly because of the Covid hangover, which was a result of insolvency numbers being suppressed by Government support measures, but also as a result of a relay of economic issues that have taken their toll on businesses.”

R3 has urged directors and owners to seek help at the earliest possible opportunity if signs of financial distress occur rather than procrastinating until the new year.

Neil, a regional associate director at insolvency litigation financing company Manolete Partners, said: “This point of the year is a critical time for many businesses in Bucks.

“If it doesn’t deliver the rise in revenues many are hoping for, we could see insolvency numbers increase further in the coming months.

“Given the timing and climate, it’s vital that directors and managers in Bucks are alert to signs of financial distress and seek advice when they appear, from a qualified and regulated source.

“It’s a hard conversation to have, but seeking advice at an early stage will provide more options for improving the situation and more time to make a decision about moving forward.”

The monthly and yearly falls in personal insolvency numbers were due to a drop in the number of people entering a bankruptcy or an Individual Voluntary Arrangement (IVA).

Most R3 members will provide a free consultation to prospective clients so they can learn more about their circumstances and outline the options for improving them.