A double-digit year-on-year rise in the number of corporate insolvencies should act as a call to action for North East business owners who think there could be trouble ahead in 2022.
That’s the view of Alexandra Withers, North East chair of insolvency and restructuring trade body R3, after the Insolvency Service’s annual figures revealed that there were 14,048 corporate insolvencies across England and Wales in 2021, which represents an 11.2% rise from the 2020 figure of 12,364.
Alexandra Withers, who is an associate director at insolvency litigation financing company Manolete Partners plc in Newcastle, says: “North East businesses have endured a torrid 12 months as they attempted to carry on trading in the second year of a pandemic amidst huge uncertainty, change and challenge.
“They have had to trade through lockdowns and restrictions, increases in energy and fuel prices, and supply chain issues, and they’ve done so in an economy which only returned to where it was before the pandemic in November, just weeks before the Government’s Omicron measures were introduced.
“While insolvencies still haven’t reached pre-pandemic levels, this is unlikely to remain the case for long, especially if the government’s remaining temporary insolvency measures are removed on schedule at the start of April.
“Given this, and the issues facing the wider economic climate, we would very much urge North East company directors to stay alert to any signs of financial distress and to seek help if any become apparent.
“If you’re having problems paying staff or suppliers, your stock levels are piling up or you’re worried about paying your rent or your tax debts, this is the time to have a conversation about your business and the challenges it faces.”
“Talking about these kind of concerns is hard, but the sooner you do, the more options you have to turn your situation around, and the more time you have to take a considered decision about your next steps.”