The latest figures from the Insolvency Service show there were 889 business insolvencies in England and Wales in November – 4% higher than the previous month but 41% lower than November last year.
Allan Cadman, North West chair of R3 and a partner at Poppleton & Appleby, said the impact of the pandemic had not been reflected in the insolvency statistics, with the only reason being the extensive support the Government has provided. “Without it, we’d be in a very different situation – and a very grave one at that,” he said.
“The economy is still nearly 8% smaller than it was in February, unemployment has increased, and a number of big brands have entered insolvency processes or announced restructuring programmes in recent weeks.
“The extension of the furlough scheme and the temporary ban on winding-up petitions until the end of March will provide some reassurance to businesses. However, the effect of the various restrictions and lockdowns remains to be seen, and questions remain about the Government’s strategy for eventually winding down its packages of support and what will happen to those benefiting from these measures once they end.
“Against this backdrop, continued uncertainty around the UK’s future trading relationship with the EU is one issue that many already struggling firms could do without.
“A good festive trading period has never been more important, but the impact of repeated stop-start closures and the disruption to usual pre-Christmas activities mean that many companies will face a cold start to 2021.
“As we approach the end of this year, it becomes even more critical that company directors seek advice from a qualified source as soon as they see signs their business is starting to struggle. The earlier they seek advice, the more options they have to resolve their situation.”
