By Max Clarke

Corporate administrations in England and Wales have soared this quarter, jumping 22% since Q4 2010, statistics published today by the Insolvency Service reveal.

Highlighting this worrying trend has been the recent, high profile administration of DIY giants, Focus DIY, which recently colllapsed. The business is now being administered by Earnst & Young and it is expected that up to 4,000 could be lost.

Manufacturing, which was previously leading the way to recovery, has had a significant increase in administrations by 45%. This trend is reflected across all sectors. Overall, the pressures that UK PLC has borne are now seen to be taking their toll.

Commenting on the figures David Hudson, partner at Baker Tilly Restructuring and Recovery, says:

“The increases for Q1 are not surprising. Historically, this has been a tough quarter for businesses. However, companies that have used credit arrangements to continue to trade through 2010 are now nearing the end of their arrangements and their performance may not have been sufficient to continue to trade without extending or rearranging new agreements with their creditors and lenders.

"HM Revenue & Customs (HMRC) is declining reapplications from companies that previously have entered into Time To Pay (TTP) arrangements. However, HMRC will still consider first time requests subject to meeting the relevant criteria.

“Looking ahead though, the recovery remains fragile. Evidence that businesses can service any current and, in some cases, additional debt requirements it takes on will be top of the agenda for lenders and stakeholders.”

Baker Tilly released Q1 2011 administration statistics evidencing that businesses in the South East (excluding London) and East Anglia of England are under increasing pressure with the region suffering from an acceleration of administrations over the past year at 32% and 41% respectively. Figures today evidence that the construction, leisure and retail sectors continue to be hard hit and this trend is likely to continue due to the current economic conditions.