FEARS have been voiced about the impact new Covid restrictions will have on the local economy after figures reveal corporate insolvencies have almost doubled in the past year.

There was an 87.9 per cent increase in the number of firms entering a formal insolvency process in England and Wales in November 2021 compared with November 2020, according to latest insolvency statistics.

R3 – the association for insolvency and restructuring professionals – warned that the spread of the omicron variant and new Plan B restrictions could have an impact over Christmas.

Garry Lee, chairman of the insolvency trade body for Dorset, said: “Times are tough for businesses in Dorset as the pandemic continues to take its toll on the economy and the firms that drive it.

“Over the last few weeks, businesses have been hit by the triple whammy of increased costs, supply chain issues and rising Covid cases.

“They have also been operating in the face of low consumer confidence and anaemic economic growth in recent months, which, coupled with an increasingly difficult Covid situation, has led to changes in people’s shopping and spending habits and taken its toll on revenue levels.

“It remains to be seen how the introduction of Plan B will affect the economy in the short and medium term, but we know it will affect footfall, spending and operations at a time when many businesses would have been hoping for a busy Christmas period to help after a challenging year.”

R3 is urging directors to seek advice as soon as possible if worried about their business.

Mr Lee said: “The latest figures bring the impact of the pandemic into sharp focus with a near doubling of corporate insolvencies for November 2021 compared with November 2020.

“More recently, the monthly increase in corporate insolvencies from October 2021 to November 2021 has been driven by a rise in Creditor Voluntary Liquidations (CVLs) to the highest number in more than two and a half years.

“The increase in the use of this process suggests that a rising number of company directors are choosing to close their businesses, perhaps because they feel that survival is impossible in the current climate.”

Mr Lee added: “We urge any director in Dorset who is worried about their business to seek advice as soon as possible from a qualified and regulated advisor.

“Seeking help at an early stage provides more options, more time and potentially better outcomes for businesses than if delayed.”

The monthly fall in personal insolvency figures was said to be driven by a reduction in Individual Voluntary Arrangements.

Debt Relief Order numbers increased slightly month-on-month, which can be attributed to the widening of the eligibility criteria for this procedure introduced at the end of June.