South East: Insolvency practitioners help save over two in five insolvent firms, says R3

More than two in five (43%) insolvent companies across the South East have been rescued with the help of the region's insolvency professionals, saving around 13,550 jobs in the process.

That's the key finding of a new report by insolvency trade body R3 into the impact that its members have had on the fortunes and prospects of troubled firms across the UK.

The report: Why Insolvency Matters: The insolvency profession’s value to the South East, reveals that out of approximately 1,567 businesses across the region which entered a formal insolvency procedure in 2013/14, 674 (43%) were rescued and 13,551 jobs saved.

Looking at the region, which includes Hampshire, Kent, Surrey and Sussex, the regional business survival rate of 43% is slightly higher than the national average of 41%. The figures do not include those companies which took advice from insolvency practitioners but managed to refocus their business without entering a formal insolvency procedure.

Speaking after the launch of the new report at a meeting of R3 South East and London members, regional chairman Andrew Watling, a partner at Quantuma in Southampton, said: “The insolvency profession makes a huge impact on the fortunes of businesses, individuals and creditors in the UK. Our members witness first-hand the human cost of business failure and do everything in their power to rescue both businesses and jobs. We are delighted to see the huge number of jobs and companies we have saved in the last year but know that there is more we, the Government and individuals can do.

“We have seen great successes in the UK’s insolvency regime over recent years through R3’s work in halting the implementation of the proposed Jackson reforms to the funding of insolvency proceedings and in leading on the planned introduction of measures to secure continuation of essential IT and utility supplies for viable firms. Going forward we will continue to fight for a fairer system in a bid to further increase the number of businesses and jobs we can save.

“There is also a part the public can play to reduce the percentage of companies and people entering insolvency. The sooner insolvency practitioners’ advice is sought, the greater the chance of business and job rescue, so it is vital that anyone in serious financial distress seeks professional help as soon as possible.”

There are around 453 licensed R3 insolvency practitioners in the South East and London out of approximately 1,750 in the UK; accounting for a quarter of the country’s profession.

As well as dealing with corporate insolvencies, the region’s insolvency practitioners deal with personal insolvencies and bankruptcies. The South East has the lowest personal insolvency rate in England and Wales at 13.9 per 10,000 adults.

However, some constituencies within the region have some of the highest personal insolvency rates in the UK, with the Isle of Wight and Gosport sitting high in the national rankings at 40.6 and 35.3 respectively.

Watling added: “While it is very positive to see we have the lowest rates of personal insolvency in the country, there is a considerable degree of disparity between rates within the region. We would hope to see those at the higher end fall. Seeking help from an insolvency practitioner is the best option for those with serious financial difficulties. Nationally, the UK’s insolvency profession is helping individuals repay £5 billion of personal debt to creditors within five years of their procedures starting.”

He concluded: "This report demonstrates the undoubted importance of the profession to the South East and we're confident that it will continue to play a key role in the region’s economy for years to come.”