The end of the Government’s pandemic business support measures, persistent supply chain issues and rising energy prices could signal a ‘rocky road ahead’ for regional companies looking to avoid becoming insolvent.
That’s the view of Alexandra Withers, North East chair of insolvency and restructuring trade body R3, after the latest official figures revealed another month-on-month increase in the number of business insolvencies across England and Wales.
The Insolvency Service statistics show that there was a 7.2% month-on-month increase in the number of corporate insolvencies last month, with the number rising from 1,349 in August to 1,446 in September.
And there was also a substantial 55.8% year-on-year increase from the 928 cases of corporate insolvency in September last year.
Alexandra Withers, who is an associate solicitor in the insolvency department of Short Richardson & Forth Solicitors in Newcastle, is now advising North East business owners to take careful stock of their position and to look for help and advice if they’re worried about how things might go in the coming months.
She says: “Despite the fact that businesses have benefitted from two months of restriction-free trading and the economic boost that many sectors feel over the summer months, conditions are still not back to anywhere near where there were before the pandemic.
“The dramatic increase in corporate insolvencies compared to this time last year, which are now at their highest level since January 2020, illustrates just how crucial the Government’s support has been in keeping businesses afloat and suggests that there may be a rocky road ahead for the business community now it has ended.
“Consumers are increasingly cautious about the state of the economy, their personal finances and the increased cost of living, which all adds up to them being more wary about spending their money.
“And with both widespread supply chain disruption and significant wholesale energy price increases building up between September and October, there is likely to be little slack in the system for businesses who have yet to get back on their feet following the impact of Covid-19.
“Any North East owner/managers who are worried about the state of their business’s finances should actively seek qualified advice at the earliest possible opportunity.
“Having that initial conversation about your financial concerns can be hard, but doing so as early as possible mean you have more potential solutions available and more time to take a qualified decision about which of them is right for your particular circumstances.”