Personal insolvencies also dropped in the first quarter 2013 to 25,006 and were 12.9% less than the same period 12 months ago.
Bev Budsworth, managing director of multi award-winning The Debt Advisor said:
“It’s great to see levels of corporate and personal insolvency continuing to fall. This is a welcome bit of good news for all of us but we mustn’t get complacent and must realise that there are still tens of thousands of people with serious levels of debt, facing wage freezes, redundancy, benefit caps and rising prices in an economy that is showing little or no growth.”
Nick O'Reilly, Insolvency Practitioner at the chartered accountants HW Fisher & Company, commented:
"The steady and sustained falls in corporate insolvencies show the economy is resilient, if not quite rebounding. They also shine a light on the twilight zone of the economy - the army of struggling firms thought to be verging on the edge of administration. The assumption that there are thousands of "zombie" companies - essentially dead, and propped up only by record low interest rates - may need to be reassessed.
"GDP is growing again and this morning RBS even revealed that it is lending more to business. Both announcements look suspiciously like a step towards normality. It was always assumed that there would be a surge in insolvencies when the zombies inevitably fell off the cliff. But that sense of inevitability is lifting - consumer confidence is up markedly on this time last year, even if inflation is gnawing away at people's purchasing power.
"Previous falls in insolvency have been welcomed with a 'yes but' as it was feared that the zombies still presented a ticking timebomb. That bomb may just have been defused - and these tumbling numbers demand a warmer welcome.
"The fall in individual insolvencies is encouraging too, but what we must not forget is that many households remain excessively leveraged. When interest rates rise, there is every chance the individual insolvency rate will rise again - and potentially sharply."
Ian Gould, Business Restructuring partner at accountancy firm, BDO, said:
“Business failure rates persist at a higher level than before the recession, but a reduction of 15.8 per cent on the same quarter last year – and a 13.4 per cent drop in compulsory liquidations - suggests businesses are maintaining a cautious ‘wait and see’ approach.
“The good news is that the overall prognosis for UK plc is improving. In other cycles, economic recovery has gone hand in hand with elevated insolvency rates, which are often a leading indicator of renewal. We may see an increase in insolvencies in late 2013 or early 2014 if a much-anticipated economic upswing gathers pace.
“Most survivors of the financial crisis are resilient and businesses have adapted to the new environment. But we are not out of the woods yet. Growth prospects are still sluggish and the collapse in people’s spending power caused by low wage growth and above target inflation may affect business confidence, particularly in sectors dependent on the consumer pound.
“To survive, businesses have needed to adapt - but to thrive, they need to evolve. The UK’s growth areas, such as TMT and the rapid expansion of online retailing, are doing this. Businesses which are evolving to cater to international markets and respond innovatively to consumer and corporate needs are the future winners. For the rest of the UK economy, life will continue to be difficult.”
