Rightly or wrongly, the insolvency profession is sometimes viewed as mercenary; the sector ultimately prospers in the event of an economic downturn whilst the rest of us flounder and hold on with our fingernails.
But nothing could be further from the truth. If you consider recent research, it would seem their input is anything but.
In a survey undertaken by the World Bank which looked globally at monies recovered when a business is closed, the UK featured at number 10 out of 127 countries, with a recovery rate of 85%.
In addition, the sheer size of the sector is to be admired. It is estimated that 12,700 individuals are directly employed in the insolvency profession, with an additional 1800 self-employed licensed insolvency practitioners and other industry professionals needed for business recovery. This dynamic sector generates a gross added value of £780 million, which equates to 0.08% of the UK economy. In addition, an extra £230 million is contributed through employees’ spending and purchases from suppliers.
But the insolvency profession’s contribution isn’t just financial. The sector provides an “enabling” role in that it maintains a business environment in which creditors are willing to lend and entrepreneurship is encouraged, safe in the knowledge that this is a well-established legal, internationally respected framework in place, ready for everyone to use, should the worst happen. According to research undertaken by R3, the association of UK business recovery professionals, demonstrates that countries who, like the United Kingdom, treat creditors appropriately in times of business difficulties, are the most likely to be prosperous in the longer term.
The industry can also be proud of helping to maintain low rates of UK unemployment. Annually around 900,000 jobs are saved when insolvency professionals are appointed to assist businesses suffering with solvency issues, rather than a business going under and their workforce entering unemployment.
The above are just snapshots of how the entire industry sector benefits the UK, both financially and otherwise. We’re sure that if the time was taken to look much more deeply, then far more positive contributions could be found.
Which only reinforces our point that the UK insolvency profession is something to be respected, not despised.