More than half of failing firms saved in North West

Richard Wolff of R3
Richard Wolff of R3

The North West has the highest rate of business rescue in the country with more than half of businesses declared insolvent surviving in some form, according to new report from the insolvency trade body R3.

The report, Why Insolvency Matters: The insolvency profession’s value to the North West, reveals that out of approximately 2,391 businesses in the region which became insolvent in 2013/14, 1,243 were rescued and around 34,786 jobs saved.

There has been much talk of a ‘Northern Powerhouse’ which is welcome but that powerhouse won’t function without an effective insolvency regime and profession to pick up the pieces when businesses fail.

Richard Wolff

The business survival rate of 52 per cent is well above the national average of 41 per cent. The figures do not include those companies which took advice from insolvency practitioners but managed to refocus their business without entering a formal insolvency procedure.

Around a fifth of the profession’s work with businesses across the UK involves general or pre-insolvency advice 22 peer cent.

There are around 180 insolvency practitioners in the North West, out of approximately 1,750 in the UK.

The report was launched at an event in Manchester attended by R3’s national president, Phillip Sykes.

He said: “The North West is one of the biggest centres for our profession, with over 10 per cent of the UK’s insolvency practitioners based here. “The region also has the best record on business rescue of any part of the UK, resulting in thousands of jobs saved and wider benefits for the regional economy.”

Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at law firm JMW, said that the UK’s insolvency regime was a fundamental part of the business cycle, helping to ensure that talent, assets and ideas are put to productive use and that creditors are repaid money wherever possible.

He said: “There has been much talk of a ‘Northern Powerhouse’ which is welcome but that powerhouse won’t function without an effective insolvency regime and profession to pick up the pieces when businesses fail.

“This report demonstrates the importance of the profession to the Northern Powerhouse and I am confident that the profession will continue to play a key role in the region’s economy for years to come.”