By Ian McConnell

Business Editor

THE number of Scottish corporate insolvencies in the July to September quarter was, at 270, up by 28 per cent on the same period of last year, official figures show.

Insolvency and restructuring trade body R3 warned of the likelihood that insolvencies would rise further, in the wake of yesterday’s data, flagging pressures from “supply-chain issues, spiralling inflation, and labour market shortages”.

Iain Fraser, who chairs R3’s Scottish technical committee, noted the level of insolvencies north of the Border had risen to the highest since the beginning of 2020.

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He flagged the impact on insolvencies of the ending of temporary measures which were put in place in an effort to support businesses through the Covid-19 pandemic.

Corporate insolvencies had totalled 211 in the July to September period last year. In the three months to June this year, the total was 244.

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Publishing its figures for the July to September quarter this year, the Accountant in Bankruptcy noted compulsory liquidations were up by143.8% on the same period of last year, at 78 compared with 32.

There were 192 creditors’ voluntary liquidations between July and September, up by 7.3% from 179 in the same period of last year.

Mr Fraser said: “Compulsory liquidations have risen more than 143% from the same period last year, and the key factor behind this is the end of the temporary legislation that altered the process and criteria for these, in an attempt to support businesses that were affected by the pandemic.

“Supply-chain issues, spiralling inflation, and labour market shortages are all having a huge impact on Scottish firms’ ability to operate successfully, let alone grow.”

He added: “It is likely that we will see corporate insolvencies continue to rise...Scottish business owners need to think carefully about their next steps and plan for all scenarios. If there are issues coming up, like falling margins or overdue invoices, it’s far better to discuss them early when more options are available for finding a solution.”

Mr Fraser declared that, “amid soaring prices and recession fears, consumer confidence remains low”.

He added: “Most people are focusing their spending on the essentials like food and heating, with little left over for anything else...For many businesses and individuals, some difficult choices lie ahead.”