Insolvency numbers down as 'flexible' firms adapt

The number of companies declared insolvent fell last month, research showed today.

A total of 1,834 firms went insolvent during the month, 15% fewer than in February last year, according to business information services group Experian.

The group said the fall brought the overall rate of insolvencies down from 0.11% to 0.1%. Last month's figure was an increase on January's rate of 0.08%, although January is typically a quiet month for insolvencies.

Rolf Hickmann, managing director of pH, an Experian company, said: "Small businesses have far more flexibility than any other business type. It is easier for smaller businesses, with just one or two employees, to easily make adjustments to their operations and pull in the reins when times are difficult.

"For larger business, there is the security that comes with size and a well-established structure, so insolvency rates among these business types are also low.

"However, mid-sized businesses, which are seeing the highest rates of insolvencies, are too large to be flexible and too small to rely on a strong and established structure."

The North-East suffered from the highest rate of insolvencies, with 0.15% of businesses in the region failing during the month, although it also had one of the biggest improvements in insolvency levels.

London had the highest number of insolvencies, with 452 companies going under in February, up from 428 12 months earlier. The North-West was next at 245, while Wales had the lowest number at 45.