A rising tide of insolvent businesses in England and Wales could swell further and lead to a significant hike in corporate insolvency levels across the region for 2024.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows the latest annual statistics published by the Insolvency Service which show that there were 25,158 seasonally adjusted corporate insolvencies in 2023, which is an increase of 13.7% on 2022’s figure of 22,123.
The 2023 figure is also an increase of 78.9% on the 2021 statistic of 14,059, and a rise of 46.6% on the 2019 pre-pandemic figure of 17,163.
R3 Midlands chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “Increases in Creditors’ Voluntary Liquidations (CVLs), Compulsory Liquidations and administrations have driven corporate insolvencies to a 30-year high.
“This is due to a combination of increased costs, cautious spending, creditor pressure and the post-pandemic hangover. Unless the economic picture improves, it seems likely that insolvency numbers will rise yet again this year.
“The upsurge in consumer spending that many businesses had been hoping for since the end of lockdown hasn’t happened or, at least, hasn’t been sustained, and the firms who were hanging on and hoping for it have simply run out of time and money. The current business climate is undeniably harsh.
“Our message to company directors, therefore, is simple: if you’re worried about your business, seek advice. It can be a hard conversation to have, let alone start, but there will be more options available, and more time to make a decision, if you act when your worries are fresh, rather than when they’ve spiralled.”
