R3 comments on Scottish insolvency statistics Q2 2016-17
Commenting on the Scottish Insolvency Statistics, Q2 2016-17, Eileen Blackburn, Chair of R3 in Scotland’s Technical Committee, the insolvency trade body says:
“It’s too soon to tell if there will be a ‘Brexit’ effect, but it’s good to see that the initial turbulence hasn’t translated into businesses being pushed over the edge.
“However, the decision to leave the EU and a potential second Scottish independence referendum on the horizon means that businesses could face a period of prolonged uncertainty.
“Like their counterparts elsewhere in the UK, Scottish businesses now have to adapt a ‘wait-and-see’ approach when it comes to planning for the future which can make it difficult for decision-makers to plan ahead with confidence.
“Many of Scotland’s oil and gas businesses are undertaking periods of restructuring, saving them from having to enter formal insolvency procedures, which will be contributing to the low number of corporate insolvencies.
“Companies that are facing financial struggles should seek advice as early as possible. Ignoring the problem only prolongs the difficulties and jeopardises the best chance of recovery.”
“The numbers of personal insolvencies in Scotland are beginning to stabilise after a long-term decline.
“It’s probably too early for ‘Brexit’ to be having any effect on the figures but it’s possible that it could cause financial difficulties for people in the future if the cost of living rises.
“The falling pound has increased the cost of imports, and while businesses haven’t yet passed this on to consumers through price hikes, if the pound remains weak they may not be able to absorb higher costs in the long-term.
“A recovering oil price has already caused a rise in inflation and if that continues, and inflation overtakes wage growth, it will have a tangible impact on people’s ability to make end meets.
“According to R3’s latest research nearly half (46%) of Scottish adults already struggle to make it to payday. This is concerning because if the cost of living increases, even marginally, it could have a significant impact on people’s finances.
“It’s important that people having financial difficulties don’t stick their head in the sand but seek qualified advice and take action.”