Statistics showing insolvencies in the second quarter of 2011 were published on 5th August by the Insolvency Service.  The number of corporate failures rose slightly in the second quarter of 2011, driven by a rise in the number of companies forced to wind up.

Seasonally adjusted quarterly data published on Friday showed 4,233 company liquidations between April and June, an increase of 2.7 per cent on the previous quarter and 4.4 per cent on the same period last year.

There was also a significant rise in the number of companies forced into compulsory liquidation, indicating that some companies are no longer being shown leniency from creditors. Voluntary liquidations fell by more than 3 per cent compared with the first three months of the year, but compulsory liquidations rose by almost 20 per cent.

Experts said that the quarterly data may still not reflect the full extent of problems faced by companies in England and Wales.

COMPANY INSOLVENCIES

There were 4,233 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the second quarter of 2011 (on a seasonally adjusted basis).  This was an increase of 2.7% on the previous quarter and an increase of 4.4% on the same period a year ago.

This was made up of 1,290 compulsory liquidations (which are down 19.8% on the previous quarter and up 11.1% on the corresponding quarter of the previous year), and 2,943 creditors voluntary liquidations (which are down 3.3% on the previous quarter but up 1.7% on the corresponding quarter of the previous year).

Table I. Company Liquidations in England and Wales (seasonally adjusted) ¹

Source: Insolvency Service and Companies House
p = provisional, r = revised
¹ Longer series back to 2001 are presented in the accompanying detailed tables.
² Where the creditors’ voluntary liquidation is the first insolvency procedure entered into (see Notes to Editors).

Additionally, there were 1,232 other corporate insolvencies in the second quarter of 2011 (not seasonally adjusted) comprising 350 receiverships, 695 administrations and 187 company voluntary arrangements.  In total these represented a decrease of 6.0% on the same period a year ago

Table II. Other Corporate Insolvencies in England and Wales (not seasonally adjusted) ¹

Source: Companies House
p = provisional,

¹ Longer series back to 2001 are presented in the accompanying detailed tables.
² Includes Law of Property Act receivers (see “Notes to Editors” paragraph 21).
³ Includes Administrator Appointments.

Note: The figures in Table II are not seasonally adjusted and are not, therefore, on the same basis as the headline figures in Table I.  The accompanying detailed tables also include the non-seasonally adjusted series for corporate liquidations.

INDIVIDUAL INSOLVENCIES (not seasonally adjusted)

There were 30,513 individual insolvencies in England and Wales in the second quarter of 2011. This was a decrease of 12.2% on the same period a year ago.

This was made up of 11,113 bankruptcies (which were down 25.8% on the corresponding quarter of the previous year), 12,143 Individual Voluntary Arrangements (IVAs), (which were down 9.8% on the corresponding quarter of the previous year) and 7,257 Debt Relief Orders (DROs), (which were up 15.3% on the corresponding quarter of the previous year)

In the second quarter of 2011, 83.0% of bankruptcies were made on the petition of the debtor, broadly comparable to the levels for recent quarters.  The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) was 20.6% in the first quarter of 2011 (second quarter 2011 figures for trading-related bankruptcies are not yet available), notably higher than levels seen in recent quarters.

Table III. Individual Insolvencies in England and Wales (not seasonally adjusted) ¹

Source: Insolvency Service
p = provisional, r = revised
¹Longer series back to 2001 are presented in the accompanying detailed tables, as are seasonally adjusted figures for individual voluntary arrangements (and for bankruptcy orders up to Q1 2009 only)

COMPANY LIQUIDATION AND INDIVIDUAL INSOLVENCY RATES: LONGER-TERM PERSPECTIVE

In the twelve months ending Q2 2011, approximately 1 in 139 active companies (or 0.7% of all active registered companies) went into liquidation, which is unchanged from the previous quarter. As figure 3 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.3% seen over the last 25 years. It should be noted that the number of active companies has changed considerably over this period; there were 2.3 million active registered companies in Q2 2011; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q2 2011, approximately 1 in 349 people became insolvent. This is down from 1 in 337 in the previous quarter.  As Figure 3 shows, the individual insolvency rate has displayed a steeply upward path (with some fluctuations) since 2004 and is currently elevated compared to the annual average of 1 in 1780 (0.1%) people seen over the last 25 years.

INSOLVENCIES IN SCOTLAND AND NORTHERN IRELAND

The following tables present recent trends in insolvencies in Scotland and Northern Ireland, complementing those for England and Wales above (longer series back to 2001 are presented in the accompanying detailed tables).

Table IV. Insolvencies in Scotland (not seasonally adjusted)

p = provisional
¹ Source: Companies House
² Including those companies which had previously been in administration or other insolvency procedure
³ Source: Accountant in Bankruptcy (AiB). Latest Release: AiB Quarterly Statistics - Q1 2011/12
⁴ The sequestration figures include LILA (Low Income, Low Assets) cases.  These were introduced as a new route into bankruptcy under the Bankruptcy and Diligence etc (Scotland) Act 2007, wef 1 April 2008.
⁵ 2010/11 individual insolvency figures for Scotland remain provisional pending final validation by AiB

Table V. Insolvencies in Northern Ireland (not seasonally adjusted)

¹ Source: Department for Enterprise, Trade and Investment, Northern Ireland (DETINI)
² Source: Companies House
p = provisional

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201108/index.htm