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27/07/2016

R3 comments on Q1 2016-17 Scottish insolvency statistics

Commenting on the Scottish Insolvency Statistics, Q1 2016-17, Eileen Blackburn, Chair of the Scottish Technical Committee of R3, the insolvency and restructuring trade body says:

Personal insolvencies:
 
“This quarterly rise, driven mostly by an increase in bankruptcies, bucks the wider downward trend in Scottish personal insolvencies we’ve seen in past years. The number of insolvencies have been falling steadily since their peak in 2012, and this quarter represents a return to more stable levels.
 
“The rise is probably less do with the EU referendum result, which only happened towards the very end of the quarter, and more to do with ongoing difficulties in the Scottish economy and the end of the financial year in March.”
 
“The after-effects of the downturn in the Scottish oil and gas sector are still being felt throughout the economy. Redundancies, wage freezes and fewer available working hours can have a big impact on the ability to make ends meet.”
 
“The end of the tax year in April can also be a trigger for some people to consider their options if they don’t have enough cash available to pay their taxes – or if they’ve missed paying the taxes due for the previous year in January.”
 
“R3’s latest research showed that over a quarter of Scottish adults say they do not have any savings at all at the moment. This is concerning as any interruption to regular income could quickly push people into serious financial difficulty.
 
Corporate insolvencies
 
“Corporate insolvencies have been on a slightly upward trend over the last 12 months, following big falls since the financial crisis.”
 
“In the last quarter, there may have been some insolvencies caused by pre-referendum uncertainty. Many companies put big decisions and new investment on hold. A delay in orders or expected financing can severely disrupt cash-flow and may have pushed some companies over the edge.”
 
“In light of the leave vote, business decision-makers are in unfamiliar territory and may still feel unable to plan ahead with confidence.”
 
“At this stage, it’s impossible to predict the long-term impact of ‘Brexit’. The UK’s relationship with the EU isn’t going to change overnight, but a weakened pound and uncertainty over what happens next could cause some companies difficulties in the coming months. Companies that are facing immediate problems should seek professional advice at the earliest stage possible.”

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.