TRADE bodies are issuing warnings despite insolvency numbers dropping.

Figures were down for insolvencies in the South and Thames Valley compared with 2019 – largely due to Government support brought in during the pandemic.

However, according to R3, the body for insolvency and restructuring professionals, they went up in the last quarter of the year, showing that the health crisis was beginning to hit home.

There were 12,557 corporate insolvencies in the region in 2020 - a fall of 27% from 2019’s number of 17,224.

Garry Lee, chair of the R3 Southern and Thames Valley region, said another significant factor behind the decrease was the suspension of creditors’ ability to take action against debtors.

And in the final quarter the number of insolvencies was up by 17%. The rise was driven by Creditors Voluntary Liquidations, suggesting the pandemic was now pushing firms into insolvency.

Mr Lee said support measures had “deferred rather than deterred” the full effects of the pandemic.

“It’s a question of when, not if, levels of corporate insolvency increase this year, but the timing will depend on when – and how – the Government support ends.”

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