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Corporate liquidations down 7% 7 February 2014

The number of overall corporate liquidations in England and Wales dropped 7.4% during the fourth quarter of 2013, compared with the previous quarter.

Official statistics from The Insolvency Service revealed the total comprised 692 compulsory liquidations, down 26.7% on the previous quarter, and 2,860 creditors’ voluntary liquidations, down 1.1% on the second quarter of 2013 and 1.0% on the corresponding quarter in 2012.

There were a further 1,001 other corporate insolvency events during the fourth quarter, comprising 642 administrations, 236 receiverships, and 123 CVAs (company voluntary arrangements).

Throughout 2013 there were a total of 14,982 corporate liquidations (both compulsory and creditors voluntary), a 7.3% decrease from 2012, with a total of 3,859 other corporate insolvencies, a decrease of 16% from 2012.

Graham Bushby, head of restructuring and recovery at Baker Tilly, said: “The latest figures from the Insolvency Service show a welcome decline in corporate insolvencies in the last quarter.

“However, the numbers don’t really paint a true picture of UK corporate health. Recent research from the Bank of England suggests that 14% of banks’ lending to SMEs is subject to some kind of forbearance – whether in the form of loan term extensions, payment holidays, or transfers to interest only deals, so there is clearly a significant degree of distress still being felt by some businesses, despite the recent upturn in the economy.”

The overall percentage of active companies registered in England and Wales going into insolvency during 2103 was 1 in 166 (0.6%), down from 1 in 144 from 2012.

The Insolvency Service has also released statistics detailing insolvency levels within UK market sectors.

Labelled as “Experimental Statistics” and covering the 12 months to the end of Q3 2013, the data shows the highest level of corporate insolvencies was in the construction industry (2,819), followed by the wholesale and retail sector (2,160).

The administration & support services, accommodation & food services, and manufacturing sectors were the only other industries to see over 1,000 liquidations, with 1,607, 1,325, and 1,217 liquidations respectively.

Individual insolvencies in England and Wales during the period totalled 24,282, a 4.6% decrease on the same period last year and down 7.3% from Q3 2013.

The figure was made up of 5,386 bankruptcies, 6,563 Debt Relief Orders (DROs) and 12,333 Individual Voluntary Arrangements (IVAs).

The number of DROs issued has been higher than the level of bankruptcies for six consecutive quarters, while IVAs now comprise over half of all individual insolvencies in the England and Wales.

Giles Frampton, vice-president of insolvency trade body R3, said: “The fall in new personal insolvency cases, for the first time in six months, is welcome.”

“However, we are concerned that the official statistics are the tip of the iceberg. The government monitors only new bankruptcies, Debt Relief Orders (DROs), and Individual Voluntary Arrangements (IVAs), but does not record new Debt Management Plans (DMP).

“The significant barriers to entry to IVAs, DROs, and bankruptcy can often mean insolvent individuals have no choice but to enter a DMP, take out a payday loan, or don’t address their debts at all. Some DMPs see people stuck in debt for years at a time, with their repayments barely making a dent in what they owe.

“Until the government begins to monitor new DMPs, the true scale of personal insolvency in England & Wales will be hidden. Changes to bankruptcy, DROs, and IVAs are also needed to ensure they remain accessible to those that need them.

Hear more on this at this year’s Credit Summit, taking place at the QEII conference centre in London on 3 April. For more details, visit



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