Submitted by Bill Fernie
23rd July 2026
The latest insolvency figures suggest that fewer businesses are going bust than many feared.
At first glance, that sounds like good news.
But beneath the headline numbers lies a more complicated story—one that suggests many businesses are surviving, rather than thriving.
The question for business owners, policymakers and communities alike is whether the recent stabilisation represents the start of a genuine recovery or simply a pause before further difficulties emerge.
The UK Picture
According to the latest Insolvency Service figures, there were 1,845 registered company insolvencies in England and Wales during June 2026.
That was virtually unchanged from May's figure of 1,849 and around 10% lower than the level recorded in June 2025.
The breakdown included:
1,364 Creditors' Voluntary Liquidations (CVLs)
276 compulsory liquidations
191 administrations
14 Company Voluntary Arrangements (CVAs)
On the surface, these figures suggest that the sharp rise in business failures seen after the pandemic and during the inflation surge has eased.
However, insolvencies are often a lagging indicator. Companies can struggle for months or even years before eventually reaching the point where closure becomes unavoidable.
Scotland's Position
Scotland recorded 104 company insolvencies during June 2026.
While smaller in absolute numbers than England and Wales, the Scottish figures tell a broadly similar story.
The June total consisted of:
61 Creditors' Voluntary Liquidations
41 compulsory liquidations
2 administrations
The fact that voluntary liquidations continue to outnumber compulsory closures is significant.
In many cases, directors are choosing to close businesses in an orderly manner before debts spiral out of control. While still a sign of financial difficulty, it often reflects business owners taking action before creditors force the issue.
Why Insolvencies Have Stopped Rising
Several factors have helped prevent a further increase in company failures.
Inflation has fallen considerably from its peak.
Interest rates have become more stable.
Businesses have adapted to higher costs.
Consumers have continued spending, albeit cautiously.
Many of the weakest firms may already have left the market during the most difficult years.
Taken together, these factors have helped create a more stable environment than many businesses faced during 2023 and 2024.
But Stability Is Not the Same as Growth
The latest figures should not be mistaken for evidence of a booming economy.
Many firms continue to face significant pressures:
Rising wage costs.
Increased National Insurance contributions.
Higher insurance premiums.
Elevated borrowing costs.
Expensive energy bills.
Weak consumer confidence.
For many businesses, particularly smaller firms, cash flow remains the primary concern.
Instead of investing, expanding or recruiting, many are focusing on maintaining existing operations.
Construction Remains a Warning Sign
One area of particular concern in Scotland is construction.
Construction companies accounted for 23 of Scotland's 104 insolvencies in June, representing around 22% of all business failures.
The sector continues to face a combination of higher material costs, labour shortages, tighter financing conditions and weaker demand in some areas of the property market.
Given construction's importance to local economies, continued weakness in the sector deserves close attention.
What About Rural Scotland?
The challenges facing businesses in the Highlands and Islands can be even greater.
Many rural firms face:
Higher transport costs.
More expensive deliveries.
Recruitment difficulties.
Seasonal fluctuations in demand.
Smaller local markets.
A hotel, café, shop or contractor in Caithness often operates under very different conditions from a similar business in Edinburgh or Glasgow.
That means national economic statistics do not always reflect the reality experienced by businesses in remote communities.
The Hospitality Question
The issue becomes particularly relevant following the UK Government's announcement of a 20% business rates reduction for many hospitality businesses in England.
Scottish hospitality businesses will be watching closely to see whether similar support emerges north of the Border.
If businesses in England receive tax relief while Scottish firms continue facing the same cost pressures, the competitive gap could become increasingly noticeable.
For an industry already dealing with rising wages, energy costs and staffing challenges, even modest tax differences can matter.
The Number Worth Watching
One figure that may deserve more attention than the overall insolvency total is the number of compulsory liquidations.
Scotland recorded 41 compulsory liquidations in June.
If that figure begins to rise significantly, it may indicate that creditors, including HM Revenue & Customs, are becoming more aggressive in pursuing unpaid debts.
Such a trend could signal worsening financial stress even if total insolvency numbers remain relatively stable.
What Do the Figures Really Tell Us?
The latest insolvency statistics do not suggest that Scotland or the wider UK is heading towards an economic collapse.
Equally, they do not point to a strong recovery.
Instead, they suggest an economy where many businesses are still navigating difficult conditions and carefully managing cash flow.
The sharp increase in business failures that many feared has not materialised.
But neither has a surge in confidence, investment or expansion.
In short, fewer businesses are going bust.
The more important question is whether businesses are getting stronger—or simply becoming better at surviving.
The answer to that question may become clearer over the next year as firms face rising employment costs, ongoing economic uncertainty and increasing competition for customers.
For now, the insolvency figures offer cautious reassurance but not complacency.