Insider Media Limited

Latest insolvency statistics show corporate insolvencies in the East Midlands rapidly declined in 2010, but public sector cuts could still cast a shadow over 2011. That’s according to research from PwC, which revealed that insolvencies in the region dropped by the largest rate in the UK in the final quarter of 2010.

In the East Midlands, 910 companies became insolvent in 2010, compared to 1,080 in 2009 – a fall of 16 per cent. The number of insolvent businesses in the last quarter of the year was down slightly on the previous quarter – a total of 161, compared to 269 in the previous quarter – which equates to a 40 per cent fall, the largest decrease reported across all regions of the UK.

Eddie Williams, director in the business recovery services practice at PwC in the East Midlands, said: "Overall insolvency numbers are back to those seen in 2008. 2010 has seen insolvency volumes stabilise as businesses are proactively managed in intensive care and options other than insolvency are actively pursued. Companies in the East Midlands seem to faring better than those elsewhere but we are certainly not out of the woods yet, as we expect looming public sector cuts to hit the bottom line of many public sector suppliers.

“The demise of Rok in November 2010 exemplifies that companies within the construction and service industries are still vulnerable. It is telling that overall construction insolvencies during 2010 were still 15 per cent above those experienced in 2008. A modest increase in interest rates would also put additional pressure on many struggling companies.”