Soaring insolvencies hit Scotland hardest in 2022

Soaring insolvencies hit Scotland hardest in 2022

The dramatic surge in business insolvencies in Scotland last year was the highest rise across all UK nations, according to a report from the BBC’s Shared Data Unit.

Nearly 90% of UK local authorities registered an increase compared to the pre-pandemic year, with Scotland noting a stark 150% jump from 243 liquidations in 2019 to 608 in 2022.

The report underlines the end of the UK government’s support, escalating energy costs, and the impact of the COVID-19 pandemic as primary catalysts for the rise, particularly affecting the retail and construction sectors. The most common form of liquidation reported was creditors’ voluntary liquidations.

Geographically, Glasgow City Council led with the highest number of liquidations at 134, a 131% leap from 2019. It was closely followed by the City of Edinburgh with 78 and both North and South Lanarkshire recording 32 each. However, regions like Shetland and Comhairle nan Eilean Siar (formerly Western Isles Council) reported no insolvencies in 2022.

Moray, Clackmannanshire, and Dumfries & Galloway each marked five insolvencies, whilst the Borders witnessed a marginal decrease, recording two insolvencies, down from three in 2019.

In terms of percentage increase between 2019 and 2022, South Ayrshire led with a 550% rise to 27 insolvencies, trailed by North Ayrshire at 500% to 29 insolvencies.

Sector-wise, only half of the business categories experienced a rise in insolvencies, with the rest showing a decline. Notably, R3, the insolvency and restructuring trade body, indicated that April 2023 marked the highest monthly rise in insolvency-related activities in Scotland since December 2022, with 122 cases.

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