The Courier & Advertiser (Perth and Perthshire Edition)
Drop in business failures in Scotland
INSOLVENCY: Official figures show fewer firms went bust in Scotland during 2016
Fewer Scottish businesses are going to the wall.
New data from the Accountant in Bankruptcy (AiB), Scotland’s official insolvency service, show 840 businesses went bust in 2016-17, 63 fewer than in the previous financial year.
Tim Cooper, chairman of insolvency and restructuring trade body R3, said: “Despite tougher economic conditions for Scottish businesses over the last 12 months, it’s encouraging to see firms are proving resilient.
“Recent R3 research found Scottish companies overall are the most stable in the UK, with only 20% at greater than average risk of insolvency, compared with a UK average of 25%.
“The process of restructuring undertaken by many of Scotland’s oil and gas businesses over 2016 may be bearing fruit, helping related companies – especially in the north east – to stay afloat.
“Consumer confidence held up remarkably well across 2016, which will have boosted many companies’ results.
“Whether this confidence will continue is trickier to predict, but with inflation rising, the willingness of the Scottish public to carry on spending may shrink in 2017.”
The AiB figures show the business failure rate improved towards the end of the year, with 155 insolvency situations registered in the fourth quarter, a 26% fall on the previous three-month period and 33% lower year-on-year.”
Alistair Dickson, restructuring advisory partner at RSM, said there had been a significant decrease in corporate insolvencies in the period, although he cautioned of the long-term situation.
“This is a positive position, however during the quarter there have been job cuts announced by Diageo, Kwik Fit Insurance and Doosan Babcock among others,” he said.
“Brexit has been blamed for some of these announcements, and these redundancies may impact on both personal and corporate insolvency statistics in the longer term as the market adjusts to this spend being taking out of the Scottish economy.”
Paul Wheelhouse, minister for business, innovation and energy, said: “There is no question Scotland’s businesses continue to face a challenging and uncertain future and it is a great testament to how robust and resolute they are that numbers of companies being forced to shut their doors continues to drop.”