Business failure rates in annual drop

Business news from the Lancashire Evening Post
Business news from the Lancashire Evening Post
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The number of business failures fell significantly last year, according to new insolvency statistics.

An analysis by business recovery experts R3 of official insolvency figures shows administrations dropped by around 10 per cent from 2,808 in 2011 to 2,532 in 2012.

Receiverships fell by almost 13 per cent from 1,397 to 1,222 and liquidations were down four per cent from 16,886 to 16,138.

Jeremy Oddie, North West chairman of R3 and head of recoveries at chartered accountants Mitchell Charlesworth, said: “Given the fears of a triple dip recession, this drop in business failures is welcome.

“Business insolvency rates are low compared with previous recessions.

“However, R3’s research suggests that this is partly due to the growing number of ‘zombie companies’ which are being kept alive by lenient creditors and low interest rates.

“Our figures show there are now 160,000 zombie businesses in the UK.”

He added the figures do not take into account the size and impact of some firms that fall into insolvency, such as Comet and La Senza.