Business insolvencies hit a 13 year high in 2022 as government support measures which protected and supported businesses during the pandemic ended. According to official data the total number of company insolvencies registered in England and Wales reached 22,109 – the highest since the financial crash of 2009.
Creditor’s voluntary liquidations were at their highest level in 62 years as more directors turned to this process to close their businesses. The end to government legislation during the pandemic which put a halt on winding up proceedings also led to a sharp rise in compulsory liquidations.
It was always expected that the false dip in insolvencies created by government support measures during the pandemic would inevitably correct and a wave of delayed insolvencies come to light. However, soaring costs, debt, low consumer confidence and post-Brexit trading problems have created a highly challenging economic environment for businesses. It is almost a perfect storm with Covid financial support measures ending as another financial crisis begins. With the Bank Of England predicting the UK economy will enter recession this year – and no real sign of an ease in inflationary pressures in the near future – the situation looks set to worsen as 2023 progresses.
By the second half of 2023 there is optimism things will ease. Any recession is widely forecast to be relatively short and shallow with Delotties recently revising their 2023 forecast from a decline of -1.4% to -0.8%. UK business has also shown strong resilience throughout the pandemic. The post Covid supply chain challenges are easing, and hope springs eternal that the backlash from Brexit will eventually resolve and businesses find a way to move forward both with our European neighbours and other international markets. However, with a backlog within the courts delaying many compulsory liquidation proceedings – these numbers are likely to remain inflated long into 2023 even as other economic indicators show green shoots.
Ashley Barratt – CEO Barratt Smith Brown
Leicester based Barratt Smith Brown, has established a strong reputation for providing market-leading debt collection support to the utilities sector. Leveraging CEO Ashley Barratt’s 15 years of experience at Centrica, they have not only provided outsourced support to key industry players such as Business Stream, Bristol Energy and Shell, but have taken a lead role in managing collections for UK energy administration collections – handing over 75% of energy administration cases since 2018. Their expertise in energy administrations led to their key role in helping The Citizen’s Advice Bureau develop their Supplier of Last Resort – Good Practice Guide and unique systems and processes to optimise insolvency recoveries.