Each month, the Insolvency Service publishes monthly statistics on the numbers of registered company insolvencies, with a ‘bonus’ quarterly round-up. Month on month since March 2023, when the last of the government’s financial support measures came to an end, it’s been stark reading of increasing numbers of companies closing due to insolvency.

What makes the latest quarterly statistics so alarming is that they represent the second-highest volume of insolvencies since 2009 (the previous quarter being the highest).

The insolvency statistics and what they mean

Although the increase between quarters has been gradual, year on year the difference is far greater. Compared to Q3 2022, total company insolvencies have increased by 10%. Broken down into the individual insolvency procedures, year on year:

• Compulsory Liquidations increased by 46%
• Creditors Voluntary Liquidations increased by 3%
• Administrations increased by 58%
• Company Voluntary Arrangements increased by 41%

The economic conditions have frankly been a perfect mix of financial pressures that very few could have predicted. Those who survived the covid-19 pandemic and were able to pivot their business have then found themselves stretching profit margins to cover higher interest rates and inflated utility costs, without customers spending anywhere near what they used to.

Will the Autumn Statement see the government step back in to support businesses?

Unfortunately, we don’t have a crystal ball to reveal what Chancellor Jeremy Hunt is going to share on 22^nd November. However, we’re not expecting any radical support measures to be put in place like there were during the Covid-19 pandemic. Companies are still repaying bounce back loans and other government backed loans. It would be unwise for the company as well as the lenders to fund additional borrowing in such an uncertain climate.  

If support can’t be provided to all, can those sectors most impacted get some help?

The reality is, all bar two sectors (Electricity, gas, steam & air conditioning supply and Mining & quarrying) saw increased insolvency numbers in the last 12 months. Everyone needs support. Those industries making up the majority of registered insolvencies hasn’t changed that much since last year. The insolvency statistics are still dominated by construction, retail, hospitality and manufacturing and this continues to be reflected in the conversations we’re currently having with company directors. Construction companies are still struggling with increased costs and projects being delayed, adding to a reluctance from lenders to lend more money. Non-essential spending cuts are an ongoing trend still impacting hospitality and retail companies today, with little evidence that this will ease soon.

What can company directors do if they are really struggling?

There is no magic wand that company directors can get hold of to vaporise creditors or debts, or cast a spell on customers to spend more.  Times are tough, for everyone. Financial pressures won’t ease by ignoring them, they need to be addressed head-on with the support of your accountant and an insolvency practitioner.

The thought of fully understanding your company’s financial position can feel overwhelming but we’re here to support you. We’ve helped directors just like you, walking them through the insolvency process, supported at every stage. With over 30 year’s experience helping these directors, we understand how you feel, and we can help you move forward.

Directors rarely say they wish they’d never spoken to us; only that they wished they’d called us sooner.  

Call us today on 0808 196 8676 or email help@trusolv.co.uk