Statistics, as 87.4% of us know, can be manipulated to say whatever the person quoting them wants them to say. In the NTI Newsroom our favourite number mind-bender was in response to a question from a panicked air-traveller who was very anxious about being a passenger on an aircraft with a bomb onboard. The statistician calculated that there was a one in 875,000 chance of this happening. Not rating those odds, the flyer asked for ways to increase them. The statistician calculated again and then said that the best way to lengthen the odds was to take a bomb on board the plane themselves, as the chances of there being two bombs on board the same aircraft are about one in 86 billion.
Well, those numerical Uri Gellers at R3 have been asking some pretty bendy questions themselves about the immediate future of our glorious sector and how busy we think we will be in the coming months. My mate at NTI, Richard (with the hair and the babies), thinks this is equivalent to polling people about the chances of Christmas happening in December, but someone had to ask the question and R3 are as good a call as any body to do so. The results, if not startling are stark. An overwhelming majority of 93.7% of respondents to this survey of members expect corporate insolvency numbers to increase over the next year. It sounds as if they have been watching the news. Digging a little deeper, the numbers get more revealing. Of those who said they expect the numbers to rise, nearly six out of ten (56%) think the increase will happen between October and December this year, while more than a quarter (26.3%) expect it to occur in January to March 2021. Just 16% think corporate insolvency numbers will increase between July to September 2020, but that may be the result of them booking to step on an air-bridge to Tuscany in August and having to leave Pamela (reception and gift-wrapping) in charge of the office and they don't really want to think about it.
With HMRC muscling up to begin the pursuit of unpaid VAT in February or March, landlords on the yomp and grants running out quicker than previously furloughed staff walking back in many are predicting the slide into insolvency will happen at around that time. Saying 'it is going to get busy out there' is the equivalent to admitting that pineapples are bigger than plums, but for now less than half (42.9%) of those surveyed said they were busier than normal, 15.3% said their workload was unchanged, and 41.3% said their workload was lighter than usual. (Those running Intu, Travis Perkins, Monsoon and every casual dining emporium everywhere just looked a bit incredulous and got back onto both of their phones.) Do you remember last year when Duncan Swift was President of R3? Well, he said, "Our members also told us that during April and May, the enquiries they received were mainly around advice on companies' eligibility for the state-provided relief packages, rather than formal insolvency support. However, it's clear from the results of this survey that it is a question of when, not if, corporate insolvency numbers increase, as the support available to businesses has deferred rather than deterred the rise in corporate insolvencies you would expect to see in an economic climate like this."
Whilst Administrations are hard on their shoulder, CVLs are still out in front as the 'procedure most likely to'. Over the course of a year, 37% said they expected a CVL to be the most common recommended tool, with 34.9% saying their money is on Administration.
How about NTI? What do we think? It is fast becoming very clear to us that there is nothing like enough licensed IPs and trained team members to do the work that is expected to come in. Chatting to the ICAEW, where we are a Learning Partner for the CII exam, they are expecting a very big increase in candidate numbers. Those who thought that advisory was king and that good old-fashioned insolvency staff just weren't that necessary any more may have to think again. We now have a team of four trained insolvency lecturers at NTI and a range of new products. Even Neil is being dusted down like some old Vauxhall Chevette on Car SOS and if he has to learn some new lines, then he'll have to learn them.
Put down the remote, Neil, I think that jacket may still fit.