Ask just about anybody and they’ll tell you that it’s not easy being in business right now. As the global economy climbs out of one recession and looks poised to enter another, businesses everywhere are struggling to get their foot on the gas and really accelerate growth. It’s a situation that isn’t aided by instability throughout Europe and East Asia, but has it affected the number of company insolvencies in the United Kingdom? Let’s take a look at the numbers for England and Wales.
Firstly, it’s important to note that the Office for National Statistics recently published a revision to their numbers following a human error which meant the figures were incorrectly tabulated. For this analysis, we’ll be using their (seasonally adjusted) updated figures, pulled from the Insolvency Service and Companies House.
Looking back to 2007 (the first full year the Government is offering information on) we can see that in England and Wales, there were a total of 15,866 company insolvencies throughout the year. That’s 92 more than they previously published, but it represents a significant low for company insolvencies in the near-decade that has followed. 2007 was the last year before the global financial crash of 2008, and that’s reflected in the figures.
As the global economy shrank, a total of 21,072 businesses were forced into insolvency – a shocking leap from the previous year. Things only got worse in 2009, as they leaped once again to 24,010 as businesses that had held on through the initial year of the recession finally collapsed under its weight. From there though, we witness a period of relative improvement in the number of insolvencies. 2011 brought a drop to 19,796, which was followed in 2011 by a small rise to 20,285 before falling to 19,350 in 2013, 17,681 in 2013 and then to 16,317 in 2014.
For 2015, the Government are only supplying the first two quarters, though the numbers look extremely promising given – besting even the pre-recession numbers. For Q1, the UK registered 3,837 company insolvencies compared to 3,933 in Q1 of 2007. Q2 is a similar story, with 3,701 businesses entering insolvency compared to 3,987 seen over the same period in 2007.
So, the data available to us indicates a steady fall in the number of insolvencies throughout England and Wales following the global recession. It’s clear, therefore, that company insolvencies aren’t increasing. They are, however, subject to the whims of the economy, and so are liable to increase with any sudden downwards shifts.