RSM Tenon - South East Insolvencies rise by just 4%

According to figures by RSM Tenon, the UK’s seventh largest accountancy and professional services firm 4,362 companies in the South East became insolvent in the course of 2011, . The figure is 4% up compared to 2010.

The worst hit sector was business services, with 1,234 of the region’s companies hitting the rocks during the year, followed by the construction industry, with 853 failures.

Sandy Kinninmonth, Director of Recovery for RSM Tenon in the South, said: “These figures do not come as a surprise following a difficult year for companies in the South East. We expected to see business services and the retail industry high up the list of sectors suffering in 2011 as these sectors arguably form much of the backbone of the region’s economy. Construction in particular has seen many insolvencies because the front-loaded nature of building contracts allows companies to survive for sometimes long periods of time after work has dried up.”

Meanwhile, the outcome was slightly better for individuals in the South East. 15,974 people in the region hit the financial buffers, with 6,853 taking out an Individual Voluntary Arrangement, 3,392 taking out a Debt Relief Order, and 5,729 being declared bankrupt – an aggregated drop of 14% compared to 2010.

Kinninmonth said: “Although 2012 is unlikely to be a boom year, the picture is not necessarily bleak for companies in the area. Business services, due to the flexible nature of the industry, is often the first sector to innovate and bounce back. Furthermore, the high proportion of people educated to degree level in the workforce helps the area to adapt, and to expand into new areas. While 2012 won’t necessarily see resurgence for the South East, I believe there are reasons to be cautiously optimistic.”