|
Notes to
Editors
1.
The official Insolvency Statistics are the most
comprehensive record of the number of corporate and individual
insolvencies in England and Wales. Insolvencies in Scotland and
Northern Ireland are also included, but are shown
separately as they are covered by separate legislation, there
are some differences in definition, and policy responsibility
for them lies within the devolved administrations.
2.
The statistics for England and Wales are derived from
administrative records of the DTI Insolvency Service and
Companies House Executive Agencies. For
Scotland, the company insolvency statistics are derived from
administrative records at Companies House, Scotland. Figures for
individual insolvencies in Scotland are provided by the Office
of the Accountant in Bankruptcy (AIB).
The Northern Ireland statistics are derived from
administrative records of the DETI Insolvency Service and
Companies Registry.
3.
Numbers of insolvencies are not directly comparable with
official estimates of business stock, formations or closures.
Statistics of business start-ups and closures that are directly
comparable with each other have been assembled from VAT records
and are published by the Department of Trade and Industry. The
latest figures are those for 2005, and were issued in a DTI
press notice on 24 October 2006. More detailed figures are
available via the on-line database NOMIS. Additionally, analysis
into the number of firms in the United Kingdom estimated the
total number of businesses at the start of 2005 at 4.3 million.
4.
The X11ARIMA program (developed by Statistics Canada) is
used for the seasonal adjustment of the insolvency statistics
for England and Wales, this being the recommended program within
UK National Statistics. The data series covering Scotland and
Northern Ireland do not demonstrate consistent seasonality and
only the raw (unadjusted) series are presented.
5.
Insolvent companies in England & Wales and Scotland
are dealt with under the Insolvency Act of 1986 and, in Northern
Ireland, by the Insolvency (Northern Ireland) Order 1989. They
can either be the
subject of a compulsory
liquidation (winding-up) order obtained from the court by a
creditor, shareholder or director or
themselves pass a resolution, subject to the approval of a
creditors' meeting that the company be wound up voluntarily (creditors
voluntary liquidations,
registered at Companies House/Companies Registry). In
either case they are said to have been wound-up,
and numbers are given in Tables 1, 6 and 8. A third type of
winding-up, members' voluntary liquidation, is not included
because it does not involve insolvency.
6.
The Insolvency Act 1986 and, in Northern Ireland, the
Insolvency (Northern Ireland) Order 1989 also introduced the
procedures of company
administration orders and company
voluntary arrangements (CVAs).
The administration procedure gives a period of time during
which creditors are restrained from taking action and a court
appointed administrator puts forward proposals to deal with the
company’s financial difficulties. The CVA procedure aids
business by enabling a company in financial difficulty to come
to a binding agreement with its creditors. These are listed
separately under Table 3 for England and Wales.
7.
The Enterprise Act 2002 introduced revisions to the
corporate administration procedures, replacing Part II of the
Insolvency Act 1986 with Schedule B1. These include the
introduction of additional entry routes into administration that
do not require the making of an administration order and a
streamlined process for Administrations
whereby a company can in some circumstances be dissolved without
recourse to liquidation. The primary objective of administration
(and of CVAs) is the rescue of the company as a going concern;
where liquidation does result these cases will be recorded under
the insolvency figures at Table 1. These provisions came into
force on 15th September 2003 and Administrations
under the Enterprise Act have been included on Table 3 from
Q3 2003 (dissolution follows 3 months after a notice is filed
with the Registrar of Companies, if no objections are raised by
the court). On 27th March 2006 the Insolvency (Northern Ireland)
Order 2005 introduced similar revisions to the corporate
administration procedures in Northern Ireland, replacing Part
III of the Insolvency (Northern Ireland) Order 1989 with
Schedule B1.
8.Receivership
appointments comprise administrative
receivers appointed under the 1986 Act (and the 1989 Order
for Northern Ireland) and certain other receivership
appointments, for example under the Law of Property Act 1925.
Due to the use of the same statutory documentation for different
types of receivership, it is not possible to give a breakdown
between them. The provisions of the Enterprise Act 2002 [section
250] (Insolvency [Northern Ireland] Order 2005 [Article 5]) have
made some changes to the procedures for administrative
receivership.
9.Individual
insolvencies in England and Wales and in Northern Ireland are
made up of bankruptcy orders and individual voluntary
arrangements (IVAs). Insolvent individuals in England
and Wales are dealt with mainly under the Insolvency Act 1986. A
bankruptcy order is made on the petition of the debtor or one or
more of his creditors when the court is satisfied that there is
no prospect of the debt being paid. (Figures for bankruptcy
orders include orders relating to the estates of deceased
debtors). There are also IVAs and deeds of arrangement (the
latter under the Deeds of Arrangement Act 1914), which enable
debtors to come to an agreement with their creditors. Table 2
summarises the above types of individual insolvencies (IVAs and
Deeds of Arrangement are now included under a single column).
Changes to bankruptcy law introduced by the Enterprise Act 2002
came into force on 1 April 2004 – the Act made no changes to
the existing individual voluntary arrangement regime.
10.
Insolvent individuals in Scotland (Table 6) are subject
to sequestration (bankruptcy) or protected trust deeds
under the Bankruptcy (Scotland) Act 1985 (as amended). This Act
was amended by the Bankruptcy (Scotland) Act 1993. Protected
trust deeds are voluntary arrangements in Scotland, but although
they fulfil much the same role as individual voluntary
arrangements, there are important differences in the way they
are set up and administered. Details of both sequestrations and
protected trust deeds are found on the register of insolvencies
which is maintained by the Accountant in Bankruptcy. Further
information about insolvency in Scotland can be found on the
Accountant's website at www.aib.gov.uk.
11.
Insolvent individuals in Northern Ireland are dealt with
under the Insolvency (Northern Ireland) Order 1989. On 27 March
2006 the Insolvency (Northern Ireland) Order 2005 came into
operation and implemented similar changes to bankruptcy
procedures as the Enterprise Act 2002 introduced in England and
Wales. Further information about insolvency in Northern Ireland
can be found on their website at www.insolvencyservice.detini.gov.uk.
12.
Under the Insolvency Act 1986 and the Insolvent
Partnerships Order and, in Northern Ireland, the Insolvency
(Northern Ireland) Order 1989 and the Insolvent Partnerships
Order (Northern Ireland) 1995, insolvent partnerships may be
wound up as an unregistered company or administered following
bankruptcy orders against the partners. Insolvent
Partnerships can also enter administration or a voluntary
arrangement.
13.
Company liquidations in England & Wales and Scotland
are also presented broken down by industry. For bankruptcy
orders, the self-employed are shown separately and with a
similar industry breakdown. The industry breakdown for cases in
England and Wales is only available one quarter in arrears of
the headline series. Work is in hand to update the
classification of new cases to the Standard Industrial
Classification (SIC) 2003 to bring them into line with other
official statistics, with a view to publishing new case
statistics according to SIC2003 next year.
14.
Information concerning insolvency legislation and
procedure in England and Wales may be obtained from the
Insolvency Service website at www.insolvency.gov.uk.
Additionally, details of recent insolvency research and policy
evaluation can be found at http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/insolvencylaw.htm.
|
