Corporate insolvencies in Thames Valley and Wiltshire fall, but trend remains high - R3

Corporate insolvencies in the Thames Valley and Wiltshire decreased by 15.2 per cent in September but are still much higher than a year ago, says R3, the UK’s insolvency and restructuring trade body.

Garry Lee, R3 regional chair, says the ongoing challenging trading climate continues to take its toll on businesses with many needing to seek professional help.

R3 is the trade association for the UK’s insolvency, restructuring, advisory, and turnaround professionals and its Southern & Thames Valley region includes Berkshire, Buckinghamshire, Oxfordshire, Hampshire, the Isle of Wight, Wiltshire and Berkshire.

Figures just published by the Insolvency Service show corporate insolvencies decreased by 15.2 per cent in September 2023 to a total of 1,967 compared to August's total of 2,319, but when compared to September 2022’s figure of 1,688 they increased by 16.5 per cent.

Corporate insolvencies increased by 35.4 per cent from September 2021's total of 1,453 and by 112 per cent from September 2020's total of 928, and also increased by 30.4 per cent compared to pre-pandemic levels in September 2019 (1,509).

Personal insolvencies decreased by 15 per cent in September 2023 to a total of 7,271 compared to August's total of 8,553 and decreased by 27.5 per cent compared to September 2022's figure of 10,024.

Personal insolvencies decreased by 27 per cent from September 2021's total of 9,967 and decreased by 2.7 per cent from September 2020's total of 7,471.

Personal insolvencies also decreased by 40.8 per cent compared to pre-pandemic levels in September 2019 (12,280).

Garry Lee, chair of R3’s Southern and Thames Valley region, has commented on the publication of the September 2023 personal and corporate insolvency statistics for England and Wales.

“September 2023’s corporate insolvency figures are the highest we’ve seen for this month in four years as a combination of economic issues, director fatigue and the post-COVID insolvency lag see more firms turn to corporate insolvency processes to resolve their financial issues.

“The fact that all forms of corporate insolvency process have risen year-on-year, with the exception of CVAs which have held steady, shows that businesses are struggling on all sides and from all ends of the supply chain.

“Compared to September 2022, more directors have turned to Creditors’ Voluntary Liquidations to wind down their businesses and more creditors, especially HMRC, have turned to Compulsory Liquidations to recover the debts they are owed.

“While numbers for these processes are higher than they were pre-pandemic, administration numbers have yet to return to 2019 levels, although they are higher than this time last year.

“It’s clear that the challenging trading climate is taking its toll on businesses. Firms are operating in a climate where people are cutting back their spending on non-essential items, while at the same time the costs of operating a business remain high – and will only increase as the weather gets colder and the cost of borrow and servicing existing debts get more expensive.

“Our message to company directors is simple: if you’re worried about your business, seek advice. It’s a difficult conversation to have, let alone start, but you’ll have more options open to you and more time to take a decision if you have it when your worries are new, rather than when they’ve spiralled.”

Garry is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office.

He added: “Personal insolvency numbers hit a four-year low in September 2023, and this is down to drop in the number of people entering an Individual Voluntary Arrangement.

“Bankruptcy and Debt Relief Order (DRO) numbers are at their second highest level this year, which suggests the cost of living crisis is leading more people to seek support via a personal insolvency process – although the increase in the DRO threshold could be a reason why bankruptcy levels have yet to return to pre-pandemic levels.

“Despite the trend in the figures published today, times remain tough for personal finances. The cost of living, a long succession of interest rate rises and the general health of the economy remain a major worry for many, and people are reluctant to make big purchases as they save money in the run-up to Christmas and as they ensure that they have enough to cover the bills.

“Food and energy costs are a key concern for consumers as we head into the winter months – while the cost of both of these has come down, it still hasn’t returned to pre-2022 levels.

“Our advice to anyone who is worried about their finances is to seek advice from a qualified source as soon as possible. The sooner you speak to someone, the more options you have for improving your situation, and the more time you have to decide about how you move forward.

“Most R3 members will offer a free consultation to prospective clients, to give them a chance to learn more about their circumstances and outline the potential options for resolving it.”