Company insolvencies increased to their highest annual level for over six years, the latest statistics have shown.
According to the Insolvency Service, which published the figures, there were 17,196 underlying company insolvencies in 2019 – a 6.8 per cent increase on 2018 and the highest level of underlying insolvencies since 2013.
Company voluntary liquidations (CVLs) and administrations also increased from 2018, by 8.2 per cent to 12,060 and by 24.0 per cent to 1,814 respectively.
The regulator said the rise was largely driven by CVLs, which reached their highest annual level in over a decade – now representing 70.1 per cent of all underlying company insolvencies, up from 57.9 per cent in 2010.
“Over the same period, compulsory liquidations have fallen as share of all underlying insolvencies from 24.4 per cent in 2010 to 17.3 per cent in 2019. 10.5 per cent of all underlying company insolvencies were administrations while two per cent of insolvent companies entered insolvency via a CVA,” added the report.
Commenting on the figures, Insolvency experts R3 said the findings confirm that “business is getting more difficult in the UK”.
“Businesses in a variety of industries are struggling right now. Retailers are suffering as the world in which they operate changes and more and more people shop online. Manufacturing output and confidence is low. Private and business car sales are down. And businesses which stockpiled items ahead of the original Brexit deadline of 29 March will now be seeing those decisions have an impact on their cash flow levels,” said R3 president Duncan Swift.
“Although numbers of administrations, a procedure designed to support business restructure and rescue, have fallen back slightly from last quarter, they are at still their second highest quarterly level since 2014. Meanwhile, the increase in Creditors’ Voluntary Liquidations suggests business rescue is more difficult to achieve in the current economic environment, perhaps reflecting greater uncertainty that purchasers can deliver sustainable business turnarounds.’
The Federation of Small Businesses (FSB), meanwhile, described the report as “troubling”.
“Important to get on with pro small business measures on tackling late payment and in the upcoming Budget on 11th March,” it said in a tweet last week.