31 October 2023
The number of registered company insolvencies in Q3 2023 fell 2% on the previous quarter, according to figures released today, and are expected to continue falling towards the end of 2023, predict* business restructuring advisers at RSM UK.
The figures show between 1 July and 30 September 2023, there were 6,208 company insolvencies, made up of 4,965 creditors’ voluntary liquidations (CVLs), 735 compulsory liquidations, 466 administrations, 41 company voluntary arrangements (CVAs) and one receivership appointment. The number of insolvencies in Q3 2023 was 10% higher than Q3 2022.
Commenting on the latest figures, Gareth Harris, partner at RSM UK Restructuring Advisory, said: ‘A small drop in insolvencies is a step in the right direction, with the majority of the fall from lower levels of ‘shut down’ creditors’ voluntary liquidations at the smaller end where the catch-up from Covid and Government support has been flushed out.
‘Sticky inflation, high interest rates and the cost of living are still making it tough for businesses to recover post-Covid, but we are entering a new phase, as business confidence recovers, we are already seeing an increase in corporate rescues and businesses bought from administration. High debt levels are really starting to bite but there is increased appetite to invest and save those businesses that ought to have a future.
‘The flip side of this is that whilst creditors have been supportive of businesses as they recover post-pandemic, this patience has now run out and the stance on forbearance has hardened, leading to an increase in compulsory liquidations, which points to the need to engage with all stakeholders to find a solution.
‘Whilst this is a small fall in overall insolvency numbers, we expect insolvencies to return to more normal long-term levels over the next few years.’