THE Insolvency Service has published the monthly company insolvency statistics for England and Wales for November 2020.
The total company insolvencies decreased in November 2020 when compared to November 2019.
In November 2020, there were a total of 889 company insolvencies in England and Wales, which included:
• 767 creditors’ voluntary liquidations (CVLs)
• 34 compulsory liquidations
• 73 administrations
• 15 company voluntary arrangements (CVAs)
• 0 receiverships
The overall number of company insolvencies decreased by 41 per cent in November 2020, when compared to the same month last year. This was primarily driven by a decrease in the numbers of CVLs and compulsory liquidations which fell by 28 per cent and 88 per cent respectively. There was also a 51 per cent decrease in the numbers of administrations and a 29 per cent decrease in the number of CVAs when compared to the same month last year.
According to The Insolvency Service, the overall reduction in company insolvencies was likely to be, in part, driven by the range of government measures put in place to financially support companies in response to the coronavirus pandemic, including the Corporate Insolvency and Governance Act.
Individual insolvency statistics for England and Wales – November 2020
As individual voluntary arrangement (IVA) numbers have been calculated using different methodology, they are presented separately to debt relief orders (DROs) and bankruptcies. Overall DROs and bankruptcies decreased in November 2020 when compared to the same month last year, while IVAs were slightly higher than the rolling three-month average observed in the period ending November 2019.
In November 2020, there were:
• 7,057 IVAs registered (using a three-month rolling average)
• 1,425 DROs
• 927 bankruptcies (836 debtor bankruptcies and 91 creditor bankruptcies)
Debt relief orders and bankruptcies
There was a 38 per cent reduction in DROs registered when compared to November 2019, while bankruptcies also fell by 32 per cent when compared to the same month as last year. The reduction in bankruptcies was driven by a 26 per cent fall in debtor bankruptcies and a 60 per cent reduction in creditor bankruptcies. The fall in DROs and debtor bankruptcies corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced government financial support for individuals and businesses since the emergence of the coronavirus pandemic. The fall in creditor bankruptcies will likely have been a result of reduced HMRC enforcement activity during this period and in part, a result of reduced operational running of the courts during this time.
Individual voluntary arrangements
Due to volatile data, the Insolvency Service provided three-month rolling averages for IVAs, which indicate what the overall trend of IVA registrations might look like. Using the three-month rolling average, IVAs in November 2020 were 3 per cent higher when compared to the average number of registered IVAs during each of the three months ending November 2019. It is noted that the three-month rolling averages should be used to consider potential changes in IVA trends over time, and both sets of numbers should be used with caution.