The Insolvency Service has published the official insolvency statistics for England and Wales for the fourth quarter of 2011, as reported by Shrewsbury Insolvency Practioners, Burton Sweet.
The company, based in Abbey Foregate, says that despite an increase in companies going into liquidation last year, the amount was still relatively low considering the financial climate.
The number of winding up orders made by the courts in the quarter was 1,389, up by 14.1% on the previous quarter, and an increase of 16.1% on the same period in 2010.
Receiverships, administrations and company voluntary arrangements (CVA’s)
The number of receiverships, administrations and CVA’s registered at Companies House in the quarter was 1,173, a decrease of 6.3% on the previous quarter. Overall the figures show an increase of 5.2% on the final quarter of 2010.
The number of bankruptcy orders made by the courts against individual debtors in the quarter was 8,626, a decrease of 9.8% on the previous quarter, and down 28.3% on the corresponding period in 2010.
Debt Relief Orders
Debt relief orders were introduced in April 2009, for individual debtors with few, if any, assets or surplus income and relatively modest liabilities. A total of 7,300 orders were made in the quarter, a decrease of 4.0% over the previous period.
Individual voluntary arrangements (IVA’s)
The number of individual voluntary arrangements in the quarter was 13,047, an almost identical number to the previous quarter, and an increase of 4.5% compared with the fourth quarter of 2010.
Eddie Hunt from Burton Sweet Insolvency Practitioners said: "The figures show that the number of company failures, as measured by liquidations, was broadly stable in the final quarter of the year, increasing only very slightly (by 0.4%) as compared with the previous quarter. Nonetheless, it is the fourth successive increase after a trend of falling numbers over the previous two years.
"A total of 4,260 companies went into liquidation in the fourth quarter, with an increase in compulsory liquidations pretty well matched by a fall in voluntary liquidations. This may indicate increasing activity by the UK’s most active petitioner – HM Revenue & Customs.
"The number of administrative receiverships, administrations and company voluntary arrangements, which are intended to be procedures aimed at rescuing all or parts of businesses, decreased slightly this quarter.
"Looking back over 2011 as a whole, there were a total of 16,871 liquidations in total in the year, an increase of 5.1% on 2010, but still remarkably low considering the prevailing economic conditions. There were 4,972 other corporate (insolvencies administrative receiverships, administrations and company voluntary arrangements), an increase of 1.3% compared to the previous year.
"Meanwhile the unrelenting diet of economic doom and gloom, both in the UK and internationally, continues unabated. The recently published provisional GDP figures showed negative growth in the last quarter. Whether we will see a second successive dip in the current quarter, and therefore a formal return to recession, remains to be seen.
"Whatever the formal statistics may say, in the real world, many businesses continue to struggle in a weak and volatile trading environment, with consumer and business confidence low. The period since the turn of the year has seen a further spate of high profile corporate failures such as Hawkin’s Bazaar, Peacocks, La Senza, Blacks Leisure and others. We suspect that 2012 will be somewhat busier for the insolvency profession than 2011.
"As we continually remind our contacts, where businesses in difficulties take sound, professional advice in good time, instead of leaving things until the problems become insurmountable, there is often a good prospect of recovering at least part of what might otherwise have seemed a hopeless case.
"The number of individual insolvencies continues to run at historically extraordinary rates, albeit falling overall in the last quarter. Taking the year as a whole there were 119,850 individual insolvencies, a fall of 11.3% on 2010, but still the third highest annual number ever."
For further information, please contact Eddie Hunt on 01743 233603.
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