A recent survey has revealed that 84% of Insolvency Practitioners in the south west have seen increased business insolvencies in the last three months – and cited the economic slowdown as a major contributor to 79% of the business failures in the region in that time.
The survey by R3, the Trade Body for Insolvency Professionals, also revealed that of those insolvent businesses 36% failed to take professional advice early enough reducing their chances of survival.
On a national level 90% of respondents believed that rises in business insolvencies will hit the UK in 12 months’ time. This contrasted to 84% who said business insolvencies would increase over the next six months.
“These professionals are at the coalface of the UK economy and the fact that nine out of every 10 believe that in 12 months’ time they will be dealing with an increase in business insolvencies indicates we are unfortunately in for a long period of protracted pain,” says Nigel Boobier, south west regional chair of R3.
The survey also tackled the issue of personal insolvency and whilst only 44% of practitioners in the south west said they had handled an increase in the last three months, 90% forecast an increase in personal insolvency cases in the next six months and also in the next 12 months.
Insolvency professionals were also asked as to the causes of this rise in personal insolvency, with the highest number of respondents citing the fact that “borrowing is seen as simply a way of life”. The second and third highest responses were “irresponsible borrowing”, followed closely by “irresponsible lending from banks”.
“For those R3 members who specialise in personal debt rather than business insolvency it has become apparent that ‘debt being seen as a way of life’ is the main cause of personal insolvency and this will be a hard psychological deadlock to break,” says Nigel.
R3 members are all regulated Insolvency Practitioners. The website www.r3.org.uk has a full list of specialists in each region of the UK.
Notes to Editors:
- The Association of Business Recovery Professionals is the UK’s leading trade association for insolvency, business recovery and turnaround specialists in the UK. Known also by its brand name ‘R3’, it promotes best practice for professionals working with financially troubled individuals and businesses.
- R3 has representation around the UK and provides a forum for debate on key issues facing the profession.
- For more information and R3’s network of qualified, experienced and regulated professionals can be accessed online using “Find a Practitioner” on the R3 website: www.r3.org.uk