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R3 comments on Scottish insolvency statistics Q3 2016-17

Commenting on the Scottish Insolvency Statistics, Q3 2016-17, provided by the Accountant in Bankruptcy (AiB), Tim Cooper, Chair of insolvency trade body R3 in Scotland and a partner at HBJ Gateley in Edinburgh, says:

Personal insolvencies up:

  • The number of personal insolvencies (bankruptcies and PTDs) in Scotland has risen by 7.9% in Q3 2016-17 compared with the previous quarter, and by 12.4% compared with Q3 2015-16.

“When talking about the rise in personal insolvency figures, it’s important to note that the numbers for 2015-16 were especially low when compared with previous years as a result of the legislative and operational changes introduced through the Bankruptcy and Debt Advice (Scotland) Act 2014 on 1 April 2015. A comparison with Q3 of 2014-15 is perhaps more illustrative, and shows that the most recent figures represent a very small fall of 0.7%.

“Including Debt Arrangement Schemes, statutory insolvency procedures are 1.9% up from the last quarter, and 10.5% up from the same quarter last year – but down 15.8% on the same quarter two years ago.

“The fact that interest rates over the period were at a record low, and remain so, has more than likely helped prevent the number of personal insolvencies from rising further. A jump in inflation is forecast for this year, which risks pushing personal insolvency rates higher as the cost of living goes up.

“Just under two in five (38%) Scottish respondents to an R3/ComRes survey (carried out between 23-25 September 2016) said they were worried about their current level of debt, with 13% saying they were ‘extremely’ or ‘very’ worried about their current level of debt. Anyone who feels concerned about their personal finances should seek advice from a regulated professional as soon as possible – ignoring problems only makes them worse.”

Corporate insolvencies down:

  • The number of corporate insolvencies in Scotland has fallen by 4.1% in Q3 2016-17 compared with the previous quarter, and by 18.4% compared with Q3 2015-16.

“There have been a number of challenges for Scottish businesses to get to grips with over the last six months, notably the introduction of the National Living Wage at the start of the year and the dramatic fall in the value of the pound following June’s Brexit vote. The struggles in the North Sea oil sector following the falling oil price over the last couple of years will have had knock-on effects on all sorts of other industries, too. Therefore, the reduction in corporate insolvencies of 4.1% is welcome news and demonstrates the resilience of Scottish businesses in the face of adverse trading conditions.

“Consumer confidence continues to outperform most predictions and has helped counteract the impact of a less valuable pound on businesses’ bottom lines.

“Our research into the credit scores of Scottish companies found that, overall, under one in five (19.6%) of businesses in Scotland are at greater than normal risk of becoming insolvent, compared with a UK average of 21.7%. In fact, Scotland came out on top of all regions for the stability of its businesses, which is definitely something to celebrate.

“Any business which is feeling the pinch ought to seek qualified advice as soon as possible, as early intervention, expert advice and decisive action increase the chances of survival. Companies which can adapt to changing market conditions will be best-placed to thrive in the future.”

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 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.