Scotland sees insolvencies fall

Both personal and corporate insolvencies fell in Scotland

The number of corporate and personal insolvencies in Scotland fell in the third quarter of this year.

There were 123 company liquidations, 18% fewer than the previous quarter, while personal insolvencies decreased by 9% to 5,767.

The quarterly figures followed a similar pattern to the UK as a whole.

But a comparison of figures from the same period last year showed that insolvencies fell in Scotland but rose in England and Wales.

Reacting to the update released by the UK Insolvency Service, Blair Nimmo, who is head of restructuring for KPMG in Scotland, said: "Whilst the overall level of insolvencies in Scotland remains relatively high, any drop in the numbers has to be welcomed.

"Traditionally, unemployment figures continue to rise after the end of a recession so while it is encouraging that some economic indicators are starting to display signs of tentative growth, we would expect the number of company and personal insolvencies to continue to remain high."

It is plausible we could see more insolvencies in the weeks running up to Christmas as retailers are at the lowest point in their debt cycle Blair Nimmo KPMG

Mr Nimmo said the difference in year-on-year figures for Scotland and the rest of the UK could be explained by a delay in the Scottish figures as the full force of the recession works its way through the system.

He added: "However, many of the businesses we are speaking to have taken early corrective action to manage their cash flow and have maintained good lines of communication with the stakeholders throughout the downturn.

"Christmas will be a critical period for many businesses, particularly in the retail sector as companies perform a balancing act with stock and cash flow, coupled with rent payments before the end of the year.

"It is plausible we could see more insolvencies in the weeks running up to Christmas as retailers are at the lowest point in their debt cycle."

The breakdown of figures from the UK insolvency Service included;

• in Scotland there were 123 company liquidations in the third quarter of 2009/10 - a fall of 18% on the previous quarter and 3% on the same period in the previous year
• in Scotland there were 5,767 personal insolvencies in the third quarter of 2009/10 - a fall of 9% on the previous quarter and 4% on the same period in the previous year
• in England and Wales were 4,716 compulsory liquidations and creditors' voluntary liquidations for the third quarter of 2009 - a fall of 4.7% on the previous quarter but a rise of 14.6% on the same period a year ago
• in England and Wales there were 35,242 personal insolvencies in the third quarter of 2009 - a fall of 6% on the previous quarter and a rise of 28.2% on the same period a year ago