Scottish business insolvencies saw a significant year-on-year decrease in December 2024, despite the overall annual figures remaining stable. The latest data reveals a complex picture of Scotland’s economic health as the country navigates through challenging times.
In December 2024, there were 82 company insolvencies registered in Scotland, marking a substantial 24% decrease compared to the same month in the previous year.
This decline is particularly noteworthy given the broader economic context and suggests a potential easing of financial pressures on Scottish businesses as the year came to a close.
Annual Stability
Despite the December drop, the total number of insolvencies in Scotland for the entire year of 2024 remained remarkably similar to the previous year. The annual figure stood at 1,236 insolvencies, compared to 1,234 in 2023. This stability in the face of economic challenges indicates a certain resilience in the Scottish business sector.
Composition of Insolvencies
The December 2024 insolvencies in Scotland comprised:
- 52 Creditors’ Voluntary Liquidations (CVLs)
- 27 compulsory liquidations
- 3 administrations
Notably, there were no Company Voluntary Arrangements (CVAs) or receivership appointments during this period.
Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, and a Partner at Addleshaw Goddard LLP, commented on the broader UK insolvency landscape:
“Despite a year-on-year decline in corporate insolvency numbers, the figures for this year are still higher than in 2022 and well above pre-pandemic levels. Compulsory liquidation levels have increased compared to last year as creditors pursue the debts they are owed in an effort to balance their own books.”
Cooper further explained the factors influencing insolvency rates, commenting:
“2024’s insolvencies have been driven by another year of high costs and a series of political, economic and geopolitical events which have taken a toll on businesses in England and Wales. Members have told us that the Election, the Budget and the conflict in the Middle East have all led to increases in enquiries and requests for advice and support.”
While these comments were made in the context of the UK as a whole, they provide valuable insight into the challenges faced by businesses, including those in Scotland. The December decrease in Scottish insolvencies, coupled with the stable annual figures, paints a picture of a business environment that remains challenging but shows signs of potential improvement. As Scotland moves into 2025, the business community will be watching closely to see if this trend continues or if new economic challenges emerge.
