In Experian's latest Insolvency Index they have shown an increase in the number of insolvencies amongst West Midlands businesses. This is somewhat surprising as the national figure is showing a decrease. Nationally the picture is 0.07% whereas in the West Midlands the figure is 0.09% which is up from 0.07% in September last year.
There were 152 insolvencies in the West Midlands in September compared to 111 last year. That said one should not draw too many conclusions from one month's figures. It is possible that HMRC have started to be a bit more aggressive for this month or the banks have had a look at the lend in the region and decided to call the loan in. There is some anecdotal evidence that the banks are more confident of higher asset values of failed companies and so are prepared to pull the plug.
George Davis and Russell Mallen, our regional managers in the Midlands had the following comments.
|Russell "The West Midlands area is showing signs of recovery, particularly in the manufacturing sector. Retail is still slow with many empty units on the High Street and shopping centres, but I feel this will start to improve over the next 12 months. Many companies I see have lingering debt with HMRC but there is a reluctance from HMRC to take action against them. I have found that as long as the company is compliant, a simple phone call will usually secure a time to pay deal regardless whether the company has defaulted on a previous arrangement. However, this shouldn't be read as gospel, as HMRC are inconsistent in the way they deal with arrangements and each department handles requests differently. I am confident that we are turning a corner in the West Midlands and confidence and investment will again return to all sectors. Nevertheless, the banks will need to be more active is supporting growing businesses. Hopefully, we are turning a corner." |