The number of business insolvencies has more than doubled year on year with the number of administrations having reached a 15-month high, the latest figures show.
According to the insolvency and restructuring trade body R3, it shows the lifting of restrictions has not been the ‘shot in the arm’ that businesses had hoped for.
The Insolvency Service figures show there were 1,515 corporate insolvencies in February in England and Wales – 3 per cent down on the previous month but an increase of 121 per cent on February 2021. The figure was also 13 per cent higher than in February 2020 before the start of the pandemic.
Allan Cadman, North West chairman of R3 and a partner at insolvency firm Poppleton and Appleby, said: “This increase in administrations suggests that there are a number of insolvent businesses which have some prospect for rescue, given this is one of the main purposes of the administration process.
“Sadly, the ending of the peak of the pandemic and the lifting of the final set of restrictions hasn’t led to the shot in the arm the business community had hoped for. Although the economy grew in January and firms benefited from restrictions ending in February, it took time for footfall to increase – and will take a while before anything resembling normality returns.
“Consumer spending has declined and consumer confidence is low as people worry about the economy and their own financial position.
“In addition to this, the restrictions on using winding-up petitions are coming to an end later this month – something which could see an increase in creditors turning to legal action to recover unpaid debts.”