July Insolvency Statistics – A Mixed Bag

While the previous few months have provided some reason to hope that insolvency numbers are starting to plateau, the reality is that many of the same issues that have plagued SMEs over the last couple of years are still in play. As such, monthly insolvency reports providing a mixed message are likely to make the occasional appearance until external factors change.

The Insolvency Service’s report for July is one such mixed bag. While it shows a drop in insolvencies from June’s figures, it also shows an increase from the same period last year.

The 2,197 corporate insolvencies recorded for July demonstrates a welcome 7% fall from June’s 2,363. Unfortunately, though, July 2023 had only seen 1,890 businesses become insolvent, meaning that England and Wales have experienced a 16% rise from the same month 12 months ago.

July 2023 was, however, a month of relatively few insolvencies bookended by months with significant numbers. Perhaps then, comparing against a month that didn’t necessarily reflect its period isn’t useful. In fact, by stretching the records to include the last five months instead, we see that the difference between 2023 and 2024 is just 0.2% (10,584 against 10,610 respectively).

“Very little has changed”

Senior Client Manager at Forbes Burton, Ben Westoby, suggests that mixed results such as those seen in July’s report are to be expected.

“There’s little here that tells us anything different from the last few reports from the Insolvency Service” Ben said. He added that “apart from a new government, very little has changed in terms of external factors. This means that until steps are taken to ease the energy issues caused by Russia’s invasion of Ukraine, among other problems, insolvency numbers will remain high. The plateauing of the figures could simply be down to the economic landscape slowly running out of businesses vulnerable enough to fall victim to it”.

Eyes will eventually turn to whether Labour’s plan to create Great British Energy, a company focused on generating energy within the UK, will have the impact on energy prices that it promises to. This though, will take a little while to get to a stage in which it can become a genuine alternative to the imported fuel that we currently use. In the interim, proposed business rates changes are perhaps the best chance that the new government can make a difference to the UK’s corporate insolvency figures.

Is your business finding its bills trickier to pay?

With insolvency still a very real threat for many SMEs, business owners are advised to take action as soon as issues start to occur. If you’ve started to notice that bills are more difficult to pay, cash flow reserves are becoming stretched, or that takings are down, make sure you give one of our friendly specialists a ring.

With a range of solutions aimed at making life easier for business owners, Forbes Burton can help you to successfully navigate your current difficulties. Get in touch for a free consultation today to see how we can help. Call us on 0800 975 0380, or email [email protected] for your free consultation with no obligation.