Corporate insolvencies up by 21% in November

The number of corporate insolvencies hit 2,466 in November, 21% higher than the prior year, meaning the number of total failures for 2023 now total over 23,000, according to new figures from The Insolvency Service.

This was higher than levels seen while the Government support measures were in place in response to the pandemic, and also higher than pre-pandemic numbers.

The Insolvency Service added that the monthly figure was driven by higher numbers of creditors’ voluntary liquidations (CVLs) and compulsory liquidations.

Insolvencies over the period consisted of 359 compulsory liquidations, up 23% on November 2022, while CVLs were also up by 23% to 1,962.

Administrations for the month were comparable to November 2022 at 133 (down from 134), though total administrations have increased “significantly” during 2023 (1,465 from Jan-Nov 23 compared to 1,231 for 2022, up 19% to date).

Andy McGill, Restructuring and Insolvency partner at Azets, said: “UK insolvency levels continue to run at alarming levels, despite the UK technically still not being in recession.

“The continued trend upwards is no surprise given the cost of living crisis, including sustained interest rate increases and higher energy costs which are set to stay at present levels indefinitely. With Black Friday come and gone in November, retailers will continue to be under increasing pressure to maintain turnover and margin levels in December to achieve their required cashflow to meet supplier and rent payments due in Q1 2024.” 

He added: “With access to funding increasingly difficult and costly, the ability for companies to ride out the storm is becoming increasingly challenging. Administrations provide a better insolvency process for underperforming businesses to be sold through an insolvency process, trade on and preserve jobs.

“Directors need to recognise financial issues at an early stage and obtain robust professional advice to ensure sufficient time is available to understand and explore options available to them to rescue their business, even if an insolvency route cannot be avoided.”