Sharp rise in companies going bust

CORPORATE insolvencies in Scotland have spiked by more than a third in the first nine months of the year, fresh figures show.

A report out today from KPMG said liquidations, administrations and receivership appointments made in Scotland rose by 37 per cent between January and September when measured against the same period last year. There were 869 appointments in the first nine months of 2010 compared with 635 last year.

Failures mainly affected small firms such as lingerie retailer Boudiche, which went into administration in June but was bought out in October.

Blair Nimmo, head of corporate insolvency, said Scottish firms still faced "uncertain economic times" due to the rise in VAT in January and expected public sector spending cuts. But he said that despite this, businesses were "cautiously optimistic" about their future survival.

"Companies are feeling cautious but if they have weathered the last three years there is every chance they will weather the next three years."

Nimmo said that although numbers were up, insolvencies had not reached the crisis levels anticipated in the depths of the recession. "The world is not falling apart quite as extensively as people had thought it would. These statistics are fairly modest in size and are flat and declining. At the moment people feel pretty confident," he added.