The number of company insolvencies in England and Wales rose 7% month-on-month in March to 2,022, according to the Insolvency Service. Company administrations surged 52% between February and March to 235, while company voluntary arrangements doubled to 20. Compulsory liquidations jumped 18% in March, the Insolvency Service reported.
The hospitality sector has been especially affected, with the number of accommodation and food service firms declaring insolvency jumping by 22% to 270 in February, according to Office for National Statistics data. In February, 254 food and beverage service businesses were forced to shut, including 171 restaurants and food trucks and 64 pubs. More than 700 pubs have shut in each of the last three years.
Ten hotels closed in February while 16 accommodation firms collapsed in total during the month. Rising energy and fuel costs caused by the Iran war have impacted businesses across multiple sectors, according to reports from major media sources. Ceramics manufacturer Denby called in administrators late last month, with sky-high energy prices said to be a key factor, according to major media sources.
Chancellor Rachel Reeves offered a £300m emergency business rates relief package in response to the economic pressures. However, hotels and restaurants were excluded from the business rates relief package, which was offered only to pubs. Industry challenges continue to mount, with two thirds of hospitality bosses saying April tax rises will force them to cut jobs.
Some of the industry's bigger operators are insulated by long-term fixed-rate energy contracts. Independent pubs and those which are off-grid are vulnerable to devastating energy bill hikes, according to UKHospitality. Smaller, independent businesses are struggling the most in the hospitality sector.
Administration figures were partly skewed by a one-off event, with more than 100 connected companies in the real estate sector collapsing last month, the Insolvency Service noted. Businesses are being urged to put contingency plans in place.