What the numbers show us is a continuation of the trend that the previous figures disclosed - corporate insolvencies remain markedly lower than the equivalent period last year. In Scotland in particular this is driven by a massive reduction in the number of compulsory liquidations this year (Nov 2019 - 56; Nov 2020 - 13).

In the period from March 2019 until the March 2020 lockdown, there were an average of 83 corporate insolvencies per month in Scotland. Since that lockdown the average has been 40 per month. As well as the reduction in compulsory liquidations, there has been a decrease in administrations in the same period from an average of 7.7 per month to 5.5 per month.

On the face of it, that seems like it must be good news. Even though we have been through such a traumatic period, insolvency numbers are actually down on last year. But what do these statistics really tell us?

1. The restriction on creditor winding up petitions (now in place until March 31, 2021) is doing what it was intended to do (hence the low number of compulsory liquidations).
2. However, not all compulsory liquidations are creditor driven (the directors themselves may petition for liquidation). So the reduction in compulsory liquidations may also reflect a decrease in the number of petitions presented by directors themselves. In fact, it is likely that almost all of the compulsory liquidations have been winding up petitions presented by directors rather than creditors (given the obstacles that creditors face in seeking a winding up order). The number of company voluntary liquidations (which are all initiated from within the company itself of course) remain broadly in line with the pre-March 2020 position. So, on balance, it would seem to be fair to say that the reduction really is almost entirely the effect of creditors being unable to wind up their debtors. 
3. There is no similar restriction in place preventing creditors seeking to put debtors into   administration. However that is something that creditors rarely seek to do anyway. So the reduced number of administrations is not caused by any restriction on creditor proceedings - it is caused by other factors (almost certainly the Government financial stimuli and suspension of wrongful trading liability). Although the number of administrations per month is small, the reduction is 28% and has remained consistently lower than in the prior year over the 8 months since the March lockdown.
4. We are undoubtedly looking at a situation where a substantial number of companies that probably would have been wound up have avoided formal insolvency since the restriction on winding up was introduced. That figure in Scotland seems to be running at about 40 per month for the last 9 months. But that figure is only showing what would have happened in a "normal year". Whatever adjective you may use to describe 2020, it is unlikely that "normal" would be your first choice. 2020 has been the most difficult year for almost all businesses and without the financial stimuli and support packages that have been made available, the number of insolvencies to date would necessarily have been much greater. At some point of course, that financial support will have to be turned off and it is perhaps to be expected that we will then see the insolvency of not just those 40 or so companies per month that would have fallen over in a "normal year" but also the insolvencies of a far greater number of companies whose balance sheets and businesses have been irreparably damaged by the pandemic (and whatever effect Brexit actually has).  

 So there you go - Christmas cheer and best wishes!

 Here's hoping for a "normal" 2021.

Monthly Insolvency Statistics November 2020 - GOV.UK (www.gov.uk)