Insolvency Service figures reveal Scottish bloodbath

Corporate insolvencies rise in England and Wales as more firms hit the wall in Scotland than any quarter since 2001

The number of Scottish firms going bust has reached a 10-year high, figures from the Insolvency Service reveal.

According to the regulator, some 348 Scottish firms were liquidated in the second quarter, up from 279 in the previous quarter and 297 in the same quarter last year.

This comprised 261 compulsory liquidations and 87 creditors' voluntary liquidations

It is the first time more than 300 Scottish businesses have gone bust since at least 2001, when the records displayed as part of the Insolvency Service's release begin.

Corporate insolvencies also continued to rise in England and Wales.

There were 4,233 compulsory liquidations and creditors' voluntary liquidations in England and Wales in Q2, a 2.7 per cent hike on the previous quarter and up 4.4 per cent year on year.

Francis Coulson, president of insolvency trade body R3, said the rise was unsurprising given the latest GDP figures that put growth at just 0.2 per cent.

"Despite the economy officially being out of recession for some time, the early recovery is sluggish and confidence has not returned to UK plc," he said.

Taking a longer-term perspective, the insolvency rate in England and Wales remains relatively low.

In the 12 months ending Q2 2011, just 0.7 per cent of active companies went into liquidation, unchanged from the previous quarter. This compares favourably to a peak of 2.6 per cent in 1993 and an average of 1.3 per cent over the past 25 years.

However, it should be noted that the number of active registered companies has ballooned from about 900,000 in early 1992 to 2.3 million today.