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The United Kingdom Statistics Authority has designated these statistics
as National Statistics, in accordance with the Statistics and
Registration Service Act 2007 and signifying compliance with the Code of
Practice for Official Statistics.
Designation can be broadly interpreted to mean that the statistics:
- meet identified user needs;
- are well explained and readily accessible;
- are produced according to sound methods; and
- are managed impartially and objectively in the public interest.
Once statistics have been designated as National Statistics it is a
statutory requirement that the Code of Practice shall continue to be
observed.
1. Data Sources and data validation
Individual-level company insolvency data for England and Wales, Scotland
and Northern Ireland were sourced from Companies
House
(except for compulsory liquidation data for England and Wales and
Northern Ireland, see below). Companies House conducts a series of basic
checks on the data, including the removal of duplicate records, prior to
supplying the Insolvency Service quarterly snapshots of data to compile
company insolvency statistics. Note that Companies House does not verify
the accuracy of all information filed, as outlined in their disclaimer
published on the Gov.uk
website.
Company moratorium and restructuring plan data are also sourced from
Companies House.
Aggregate data for compulsory liquidations in Northern Ireland were
sourced from the Department for the
Economy. The Insolvency Service does
not conduct any further validation on these aggregate data.
Individual-level compulsory liquidation data for England and Wales were
sourced from the Insolvency Service case information system (ISCIS).
Note that the validation processes for these data changed ahead of the
release of these statistics for Q1 2021, resulting in a high volume of
small revisions. Details of the methodology changes and the impact of
these change are discussed in the ‘Revisions’ section below. Companies
House separately provides snapshot figures for active companies as at
the end of each month in England and Wales, Scotland, and Northern
Ireland. These data were used to calculate company liquidation rates and
are separately published by Companies House on the
Gov.uk
website
2. Methodology
2.1 Seasonal adjustment of data
Seasonal Adjustment is the process by which patterns in a data series
that are due to seasonal or other calendar influences are removed to
produce a clearer picture of the underlying behaviour of the data. This
process enables quarter-on-quarter comparisons to be made.
Most data series for England and Wales have been tested for seasonality,
as described in the latest review of seasonal adjustment. The series for
Scotland and Northern Ireland do not demonstrate consistent seasonality
and only the unadjusted series have been presented, as agreed with the
relevant officials in the devolved administrations.
Seasonal adjustment was carried out using the X13-ARIMA-SEATS program
(developed by the US Census Bureau), the recommended program for UK
National Statistics.
The seasonal adjustment models for England and Wales are reviewed on an
annual basis, in accordance with the Insolvency Service Official
Statistics Revisions
Policy.
Full details of the 2023 seasonal adjustment review and the models used
to adjust these data can be can be found on the
Gov.uk
website.
2.2 Calculation of rates
The numbers of companies that went into liquidation in each location via
compulsory liquidation or creditors’ voluntary liquidations (CVLs)
(including those who entered CVL after administration) were divided by
the mean average number of all active companies registered with
Companies House in the same location during the same period.
The rates presented for each quarter reflect a four-quarter rolling rate
per 10,000 active companies. Therefore, the Q1 2023 rates, for example,
were calculated using data covering the period Q2 2022 to Q1 2023.
The insolvency rate gives an indication of the probability of a company
entering liquidation in the previous four quarters. As the rates are
calculated as a proportion of the total number of active companies, they
are more comparable over longer time periods than the absolute numbers.
2.3 Tabulating numbers of company insolvencies
The main series of company insolvency
tables
present the overall numbers of company insolvencies in each quarter
since January 2013, as well as annual totals. Tables 1a and 1b present
seasonally adjusted and non-seasonally adjusted tables for England and
Wales. The commentary for these statistics refers to the seasonally
adjusted figures so that reliable quarter-on-quarter comparisons can be
made. Table 4 presents the non-seasonally adjusted numbers for Scotland.
Table 6 presents the non-seasonally adjusted numbers for Northern
Ireland.
Company insolvency data, as provided by Companies House were tabulated
by insolvency type (CVLs, administrations, company voluntary
arrangements (CVAs) and receivership appointments) and quarter in which
each insolvency was registered with Companies House. Therefore, numbers
reflect company insolvency registrations rather than insolvency
procedure ‘start’ dates. Start dates vary across procedures
e.g. administrations are ‘started’ once an administrator has been
appointed; CVAs ‘start’ upon date of creditor agreement.
Compulsory liquidation data for England and Wales, sourced by the
Insolvency Service, are reported by court order date, thus providing a
more accurate measure of the number of new cases in each quarter.
However, these figures are considered provisional since any future cases
later considered as a duplicate, and any cases later rescinded will be
removed from the underlying data. Furthermore, there may be a lag in
cases being recorded on the administrative system, meaning that numbers
from previous quarters may subsequently be revised upwards. These
figures are therefore marked as ‘provisional’ in the accompanying
tables.
Companies that entered CVL following administration are excluded from
Tables 1a and 1b since they have already been captured as
administrations and therefore would be counted twice. However, Table 2
separately presents these (non-seasonally adjusted) numbers since
January 2012.
Between April 2016 and early 2019 there were a high number of CVLs
registered for companies that should have only registered one CVL.
Tables 1c and 1d present the (seasonally adjusted and non-seasonally
adjusted) numbers of ‘bulk’ CVLs and the overall totals including ‘bulk’
CVLs.
Company liquidation rates are presented in Table 3a for England and
Wales. Table 3b separately presents the total liquidation rates for
England and Wales to include the ‘bulk’ CVLs registered between 2016 and
2019, for users who wish to consider the trends over time that include
these cases. Table 5 presents the rates of company liquidation in
Scotland. Table 7 presents the rates of company liquidation in Northern
Ireland.
2.4 Tabulating insolvency by industry tables
The additional series of accompanying industry
tables
presents quarterly numbers of insolvencies by industry in accordance
with the 2007 Standard Industrial Classification (SIC).
Company insolvency data as supplied by Companies House, contains a
mixture of the 2003 and 2007 Standard Industrial Classification (SIC).
Until the Q3 2022 statistics publication, where a 2003 SIC code had been
supplied, it had been converted to a 2007 code using a ‘best match’
approach using weighted tables provided by the Office for National
Statistics.
This methodology used for matching the 2003 SIC code with the 2007 SIC
code was updated for the Q3 2022 release and uses the correlation tables
provided by the Office for National
Statistics.
This has resulted in some cases moving between SIC codes at the 2-digit
and 3-digit level. Where more than one SIC code is recorded, only the
first listed, or the primary, code is used.
These statistics present company insolvencies for England and Wales, and
Scotland to the three-digit SIC 2007 level. Statistics are not presented
for Northern Ireland due to small numbers.
For information on SIC 2007, including its structure and more detailed
information on which industries are included, please see the Office for
National Statistics
website.
Before the Q2 2021 release of these statistics, the industry tables
included bulk CVLs registered between 2016 and 2019 (see glossary). In
the Q2 2021 release and all subsequent releases, these have been removed
to give a more accurate representation of the number of companies within
each industry entering insolvency.
3. Revisions
These statistics are subject to scheduled revisions, as set out in the
published Revisions
Policy.
Other revisions tend to be made as a result of data being entered onto
administrative systems after the cut-off date for data being extracted
to produce the statistics. Any future revisions will be marked with an
‘[r]’ in the relevant tables.
4. Quality
This section provides information on the quality of these quarterly
individual insolvency statistics, to enable users to judge whether the
data are of sufficient quality for their intended use.
The section is structured to align with the Quality Assurance Framework
of the European Statistical
System
for statistical outputs.
Relevance: The degree to which the statistical product meets user needs in both coverage and content.
These statistics present individual insolvencies for England and Wales,
Scotland and Northern Ireland and are the most comprehensive record of
the number of individual insolvencies in the UK.
Key users of insolvency statistics include the Insolvency Service
itself, which has policy responsibility for insolvency in England and
Wales and for the non-devolved areas within Scotland and Northern
Ireland; other government departments; parliament; the insolvency
profession; debt advice agencies; media organisations; academics; the
financial sector; the business community and the general public.
Insolvency statistics are typically widely reported in national,
regional and specialist media on the day of release.
The statistical production team welcomes feedback from users of the
Insolvency Statistics and can be emailed at
statistics@insolvency.gov.uk.
Accuracy and Reliability: Accuracy is the proximity between an estimate and the unknown true value. Reliability is the closeness of early estimations to subsequent estimated values.
All formal insolvency procedures entered into by a company, a
partnership or an individual are required by law to be reported to the
appropriate body, so Insolvency Service statistics should be a complete
record of insolvency in the United Kingdom.
Numbers of insolvency cases are typically based on the date they were
registered onto the relevant administrative recording system, and so it
should be noted when making comparisons of trends over time, that trends
can be influenced by late reporting.
Checks are in place to identify and remove duplication of cases, to
ensure that returns cover all reporting areas, and to check consistency
within tables and between related tables. Note that data are extracted
from live administrative systems and therefore subject to routine
revisions as systems are updated.
Timeliness and Punctuality: Timeliness refers to the elapsed time between publication and the period to which the data refer. Punctuality refers to the time lag between the actual and planned dates of publication.
Quarterly company insolvency data were provided to the Insolvency
Service by Companies House approximately ten working days after latest
quarter end.
Typically, these statistics are scheduled to be released one month after
quarter end. This is to allow time to extract and compile the
statistics. Additionally, the quarterly company insolvency statistics
cannot be published ahead the quarterly release of the official
statistics
published by Companies House on numbers of companies on the active
register.
Where a scheduled release date falls on a Monday the scheduled release
has been pushed forwards by a day, to the Tuesday, to ensure compliance
with the Pre-release Access to Official Statistics
Order.
The publication schedule for these statistics, and all other Insolvency
Service statistics, can be found on the UK National Statistics
Publication
Hub.
Comparability and Coherence: Comparability is the degree to which data can be compared over time and domain. Coherence is the degree to which data are derived from different sources or methods, but refer to the same topic, are similar.
The Insolvency Service also publishes monthly insolvency statistics. The
sum of these quarterly statistics may not equal previously published
monthly statistics since the data were extracted at different times from
live administrative systems which are subject to amendments. Companies
House also perform additional validation checks on the quarterly data.
Companies House produces official
statistics
on companies in liquidation and in dissolution. However, these figures
do not align with the insolvency statistics, since they include
companies that wound up voluntarily.
The Gazette (formally the combination of three publications: The London
Gazette, The Belfast Gazette and The Edinburgh Gazette) is an official
journal of record consisting of statutory notices, including company
insolvency notices. The timings of the publication of Gazette notices
and the registration of company insolvencies at Companies House may
differ and therefore the numbers of insolvencies in a specified time
period may not align. Additionally, it is only a legal requirement for
certain insolvency procedures to be published in the Gazette.
Notifications of company CVAs are not published. In terms of personal
insolvency, only notifications of bankruptcies are published.
The Office for National Statistics also produces annual statistics on
business “deaths” in its Business
Demography
publication. Again, figures do not align with Insolvency Service
statistics as they relate to all registered businesses, whereas the
insolvency statistics relate only to companies on the Companies House
register, and business deaths include all types of dissolution in
addition to insolvencies
The AiB is required to be notified of all company liquidations and
receiverships in Scotland, and publishes official statistics based on
its own administrative records. These differ from the Insolvency Service
statistics, which use data from Companies House as the source.
Differences are due to the AiB using its own administrative system’s
date rather than the date of registration at Companies House. The AiB
does not publish information on the number of company voluntary
arrangements or administrations, which are a reserved matter for the UK
government.
Accessibility and Clarity: Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of metadata, illustrations and accompanying advice.
Insolvency Statistics are available free of charge to the end user on
the Publication
Hub
and they meet the standards required under the Code of Practice for
Official
Statistics.
The accompanying data tables are formatted in line with current guidance
for producers of official statistics to help improve the usability,
accessibility and machine readability of spreadsheets. The Government
Statistical Service are continuing to review this guidance and so the
presentation of these statistics may change in the future.
Historical insolvency data are also published for the key series, on the
National
Archives
website.
Views on the clarity of the publication are welcomed via email:
statistics@insolvency.gov.uk.
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