UK insolvency industry saved over 750,000 jobs and 6,000 businesses in 2012
Engaging with insolvency practitioners (IPs) does not necessarily signal the end of a business – as evidenced by new analysis by ComRes on behalf of R3.
ComRes’ analysis of the insolvency industry found that in 45% of cases, the business advised by IPs avoided full closure. Of those in formal insolvency procedures, 27% continued in some form. This comes against a background of falling corporate insolvency numbers, down 11% from 2009.
Former R3 President Lee Manning comments:
“The insolvency profession may seem at first glance an unlikely saviour of businesses and jobs, but a struggling business may well survive in some form.
“The findings also highlight practitioner work involves advising a business pre-insolvency or restructuring, often overlooked and by necessity under the radar. Our insolvency regime is shown to be flexible with a variety of options to suit any distress situation. I am heartened by the high numbers of jobs saved and the contribution that is making to the UK economy.”
The total number of business insolvency cases in the UK stood at 17,819 in 2006, and peaked at 25,432 in 2009 but has since declined by 11% to 22,590 for 2012.
Lee Manning continues:
“It may not feel like it with the succession of high profile retail collapses earlier this year – but business failure has been on the decrease since 2009. This is good news for businesses struggling through a very slow recovery. The picture could alter if asset values increase and interest rates go up, perhaps pushing insolvency numbers up as happened in previous recessions. However, if struggling business owners take action now, the outcome for them is likely to be far better.
“In the meantime, these findings show that, though minor changes could be beneficial, the UK’s insolvency regime is broadly working well. This is backed up by favourable comparisons to other international insolvency regimes.”
Will Black, R3 Communications Manager
t: 020 7566 4215 m: 07917 422 485 e: firstname.lastname@example.org
ComRes interviewed 429 insolvency practitioners across the UK, all of whom are members of R3. The interviews were conducted online between 12th December 2012 and 22nd January 2013 as part of the R3 quarterly membership survey. The results have been used to extrapolate and model all IPs in the UK.
The insolvency industry was responsible for rescuing approximately 6,100 businesses and helped to save around 761,000 jobs in companies going through insolvency.
In particular, part of the survey addressed the detail of the nature of the last five corporate insolvency cases that respondents had worked on. These cases have been used to model the state of UK businesses which have gone through insolvency procedures. Combined with analysis using data from the Office of National Statistics and the Insolvency Service, this allows us to calculate the value of the insolvency industry through its multifarious contributions to the wider economy.
Where the report produced references the ONS, this data is from 2010, which is the most up-to-date data available.
Notes to editors:
– R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners.
– R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
– R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals. Website www.r3.org.uk