Scottish firms going under at a record rate as economic recovery stutters

By Peter Ranscombe
Published on Thursday 20 October 2011 00:00

SCOTTISH companies are going bust at a record rate, with more than 24 businesses going to the wall each week due to a lack of bank lending and stricter enforcement by the taxman.

Analysts warned that the high number of firms folding would have a knock-on effect when the economy starts to recover, with few businesses being able to take on extra staff.

Fewer posts being created would come as a blow to politicians in both Holyrood and Westminster, who are banking on the private sector being able to absorb looming job losses from the public payroll.

Official figures released yesterday showed that 361 firms went into liquidation or receivership in the three months to 30 September, up 46 per cent year on year and 5 per cent higher than the previous quarter. In the past 12 months, 1,263 firms have gone out of business, also marking a record, according to data from the Office of the Accountant in Bankruptcy, a Scottish Government agency.

Iain Fraser, Scottish spokesman for R3, the insolvency practitioners’ trade body, said: “These figures reveal that many Scottish businesses are unable to continue as the expected upturn in the economy has failed to materialise.”

Bryan Jackson, corporate recovery partner at accountancy firm PKF, warned: “The situation is likely to be that many of these will be smaller firms. This remains a serious issue if the economy is ever to recover.

“Given that SMEs are the lifeblood of the business community, to lose so many and at such a rapid rate would indicate that there is little sign of an upturn any time soon.”

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Tarheel Chief

Friday, October 21, 2011 at 02:41 AM

Scotland is doing far better than Ireland,Greece,Italy,Spain,Portugal,the Netherlands, and England. They keep losing their brave,handsome native sons and beautiful native lassies to warmer climes,and less opinionated men and women. Calvin used to be an advantage,in the modern world he may not be,for other nations also believe in thrift and hard work It's very tough to compete against these three advantages held by other nations.

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AlastairMcIntyre

Thursday, October 20, 2011 at 04:27 PM

We know that people now turn to the Internet first to get information. However when you search for Scottish companies there is little information available. While many companues have their own web site there is no easy way to find them. Council sites will often have a business directory but they tend not to include things like an email address or web sitre address with the entry. I fail to understand that as by giving local companies extra exposure, which would take them at best 1 minute to implement, they could be creating an opportunity foir these business to sell more thus increasing jobs and tax revenue. I blame the Scottish Government for lack of vision and enterprise as they are in a position to insist that more information is available on Scottish companies. Mind you the companies themselves are very lax in using the online world to promote their businesses. Having your own web site really doesn't make much of an impact on the world. Try building your own web site and you'll struggle to get 100 visits a month and it's almost impossible to get 100,000 visitors a month which is what you need to make a real impact on sales.

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wayneb

Thursday, October 20, 2011 at 11:34 AM

Small and medium-sized enterprises tend to hit the wall faster because, in many cases, the owners are not business-oriented, nor do they have sufficient resources to handle their situations, even when business is booming. (Where did that carpenter go?) Instead of putting these people on the dole, the government could consider business training... teaching these and others how to manage their business. Whether they go back into doing their own thing or working for others, they will be much better equipped and the economy safer for it.

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