R3 Midlands urges government to push corporate insolvency reform
The Government should consider more corporate insolvency reform in the upcoming budget, according to the Midlands branch of insolvency and restructuring trade body R3.
It comes as government figures reveal a 15% year-on-year surge in the number of corporate insolvency cases in England and Wales.
Urgent reform, in the form of more positive insolvency measures to aid struggling businesses, should be a priority for the Government, according to R3 Midlands’ chair Chris Radford.
He explained that the latest figures “reinforce the pressing need” to improve the nation’s corporate insolvency framework, despite it already being among the best in the world.
As businesses in financial difficulty are able to resolve their issues quickly, it means doing business in the UK is seen as an attractive proposition by many, boosting both the economy and investment in the process.
Mr Radford added that the UK needs to “stay ahead of the competition” with Brexit looming, especially as British businesses continue to embrace new export markets.
“Forward thinking reform is vital to UK corporate survival,” he explained.
A number of reforms are already up for discussion, among them the potential for last chance protection from creditors for company directors – this could potentially provide an additional opportunity to recover a business before formal insolvency measures are a necessity.
Another move could see those facing difficulties given essential assistance, meaning aspects such as utilities would be covered while they try to overcome their financial problems.
Mr Radford said the Midlands branch of R3 would welcome such proposals, although he warned that some changes would be necessary.
“Their value in main company rescues more feasible – this supporting jobs and people’s livelihoods – cannot be overstated,” he added.
The key for any business facing financial trouble is to act quickly, which starts by seeking appropriate advice from a corporate insolvency practitioner.
By assessing options at an early stage, the number of potential solutions is greater, meaning that insolvency measures or some form of restructuring could be implemented.
By Phil Smith