R3 Doing The Numbers

They love a number, do R3; I guess, the clue is in the title. Billy Get A Grip is fond of figures, too. Seven was the number of GCSEs he promised his favourite teacher, Mr Painter, he would get. One is the number of teachers he disappointed (by a factor of seven) when his results were published. His colleague Tracee tells us she read that the average smartphone user touches, swipes, and taps their phone 2,617 times a day (she stole this statistic from Kings University researchers, who are presumably really good at smeared finger prints and CCTV).

Maybe the most salutary number for today (before we return to R3) is that the average life expectancy in the United Kingdom (as of December 2018) is 81.65, whilst the average life expectancy for insolvency and restructuring professionals at senior manager level and above working in London is 68.2. The phrase you are looking for is, “oo er”. Anyway, whilst we have you alive, on 14 July the Insolvency Service published the monthly insolvency statistics for June. For those who caught a cumulative 108 hours sleep during that month and most of those on a lilo in the kitchen of an Italian restaurant in Maidenhead, steal yourselves. There was a total of 732 company insolvencies in England and Wales, comprised of 557 CVLs, 61 Compulsory Liquidations, 100 Administrations and 14 CVAs. There were no Receivership appointments. Staggeringly, or at least that is what we think in the NTI newsroom, this relates to a 50% drop in overall corporate insolvencies compared with June of last year.

I suppose when Tracee stops playing with her nail extensions and thinks about it, there is no great surprise there, with the effective blanket ban on statutory demands and Sunak, Rishi Sunak doling out grants and cash to anyone with an open palm, but how long will the numbers continue on a downward trajectory?

(This is the R3 bit) Christina Fitzgerald, Vice President of that hallowed body, agrees, "Today's statistics still do not show the effects of the pandemic on personal and corporate insolvency levels. In part this is because of the time it takes to set up and enter corporate and personal insolvency processes, but also because of the Government's support measures, which will have provided a valuable safety net for many people and businesses.”

But how about personal insolvencies, Christina? (The numbers first.) There were 1,775 Debt Relief Orders and 454 Bankruptcies in June in England and Wales (made up of 431 debtor Bankruptcies and 23 creditor Bankruptcies). There was a 15% reduction in DROs and a 65% reduction in Bankruptcies in June 2020, compared with the same month last year. The reduction in Bankruptcies was driven by a 58% fall in debtor Bankruptcies and a 91% reduction in creditor Bankruptcies. "Our members are telling us that requests for formal insolvency support have not been significantly higher than before the pandemic. However, there has been a significant increase in existing and new clients asking for support with managing a reduction in demand for their products and services, and guidance around how they can manage working capital shortages in cashflow forecasts as the economy gets moving again.”

A great NTI client who moves (and, to be honest, shakes) in the IVA world told us today that they are writing about 65% less new business at the moment and this is due to credit card companies, HMRC and banks not actively pursuing debt whilst they employ more people with sharp knives and no souls. However, when they turn the phones back on, stand clear.

What will July’s figures look like? Don’t predict and make yourself look, how does the phrase go?, like an economist. Tune in next month to the NTI news bulletin.