UK IT insolvencies rise despite improvements in trading environment, says Experian

Experian said that there were 84 IT insolvencies for the year to April 2013 compared with 68 for the year to April 2012.

In outlining the latest results from its Business Insolvency Index, Experian said that the overall business insolvency rate for the past year was 0.08%, down from 0.09% for the 12 months to April 2012.

Technology law specialist Iain Monaghan of Pinsent Masons, the law firm behind Out-Law.com, said that a decline in the market for PCs, in the face of competition from tablets and other mobile devices, may have hit the supply chain and have been a factor behind the rise in IT insolvencies in the last year.

Technology disputes expert at Pinsent Masons, Ian Birdsey, said that the continued economic downturn could also have impacted on IT budgets and the number of IT projects given the go-ahead and subsequently had an impact on the IT industry as a whole. Birdsey said that IT projects, especially transformational projects used to deliver wider change to business processes, may be seen as "unnecessary or unjustifiable" in the current climate, despite the efficiencies and innovations such projects can deliver.  

Experian's figures showed an increase in the number of business insolvencies in London for the 12 months to April 2013 (490) from the previous year (363). However, total insolvencies in Scotland fell from 106 for the year to April 2012 to 43 in the past 12 months.

"We’ve seen that the insolvency rate has been decreasing for some time, but the fact that it is staying low is encouraging news," Max Firth, managing director of Experian Business Information Services, UK & Ireland, said. "It’s particularly pleasing to see that companies at both ends of the supply chain are improving all the time. Small companies make up the lifeblood of the British economy, so it is good to see that they have relatively low insolvency rates. And at the larger end of the scale, the big firms have a significant effect on the whole supply chain, so to see fewer failures is promising and will no doubt boost confidence in both customers and suppliers.