Corporate failures at lowest levels for a decade as funders rescue companies from collapse

Published at 11:19 AM on 07 February 2014

PwC analysis of today’s national corporate insolvency statistics finds that the number of company failures has decreased again as positive sentiment has seen funders provide more sustained support for businesses. 

4,398 companies entered insolvency in the last quarter of 2013. This is a decrease of  6.8% on the third quarter of 2013 when 4720 businesses failed. Year on year the number of collapses has dropped by 6.4% when 4701 businesses began insolvency proceedings in Q4 2012.

Comparing the whole of 2013 with the same period in 2012, company collapses dropped by 9.2% (18,841 in 2013 vs 20,749 in 2012).

In response to today's national corporate insolvency figures, Mike Jervis, business recovery partner at PwC, said:

"Insolvencies have shown a fall of 6.8% in the last quarter of 2013 and this is as expected as the economy continues to pick up. However, there are some interesting factors to take into account.

"The quarter's low level of insolvency has been driven by the availability of investment funds to help bring companies back from the brink of collapse. Hedge funds and distressed venture capital funds are the busiest part of the restructuring community.

"The insolvency levels in the UK compare very favourably to other Eurozone economies, notably Spain and Italy, where the insolvency trend is still rising. 

"I expect the decrease in UK insolvencies to continue during 2014. However, companies should not be complacent: management of cash is a key factor as the economy achieves its own turnaround."

ENDS

Notes to editors

· The Official Insolvency Statistics for Q4 2013 for England and Wales were released on 7 February 2014.

· The Tribunals, Courts and Enforcement Act 2007 introduced a new route into personal insolvency called the debt relief order (DRO), which came into effect from 6 April 2009.  DROs provide debt relief, subject to some restrictions, and are suitable for people domiciled in England and Wales who do not own their own home, have little surplus income (no more than £50 a month), assets (other than possibly a car) not exceeding £300, and less than £15,000 of debt. DROs do not involve the courts; they are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries.  A DRO lasts for a period of one year before discharge and, as for bankruptcy, there are penalties in place for debtors who seek to abuse the process.

· Additional information may be found on The Insolvency Service website here:

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201402/index.htm


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