Insolvency professionals ‘play key role in saving jobs’

Posted 20/04/2010

Seeking professional insolvency advice helped companies to save almost two million jobs during 2009, according to a new study.

Job losses are generally regarded as the most harmful side-effect of company failures, but a ComRes report commissioned by R3, the trade body for the insolvency sector, showed they can be avoided in some circumstances.

The research found that 5,851 businesses avoided closure during 2009 thanks to the work of insolvency professionals.

It also concluded that the advice given by insolvency experts to struggling companies helped to safeguard around two million jobs – equivalent to almost seven per cent of the country’s workforce.

R3’s incoming president Steven Law said the figures showed that people running businesses should seek professional advice as soon as they become aware that insolvency is a possibility.

“If the insolvency practitioner can get in early enough, often the business, or parts of the business, can be saved by insolvency procedures such as administration or company voluntary arrangements,” he added.

The report comes just days after PricewaterhouseCoopers published figures showing that the number of company insolvencies was 20 per cent lower in the first quarter of 2010 than in the first three months of 2009.