The amount paid out by the government’s insolvency service has risen to its highest level in seven years, news figures obtained by property adviser Altus Group show.
During 2019, the Insolvency Service paid out £346.1m from the National Insurance Fund to former members of staff as a result of their employer entering into either administration, liquidation, a company voluntary arrangement, or another form of corporate insolvency.
This is the highest amount paid out since 2012, and an increase of 16% on the £298m paid out during 2018.
A total of £222.5m was paid out in redundancy pay, whilst £63.9m was for money that would have been earned working a notice period.
Another £18.3m was used for unpaid holiday pay, and £41.4m for outstanding payments for wages, overtime and commission owed.
Underlying company insolvencies in England and Wales rose by 3.9% across the retail sector in 2019, while insolvencies at accommodation, food and beverage establishments rose by 10.4%.
Robert Hayton, head of UK business rates at Altus Group, said that while business rates are rarely the sole driver for insolvencies, they are a contributory factor.
He added: “A fair and reformed [business rates] system is within our grasp. If we are serious about ‘levelling up’ the economy to help struggling towns, rates bills must fall in line with declining rents while speeding up meritorious business rates appeals has to be a government priority.
“Bringing some respite to the financial burden of rates through ending annual inflationary rises whilst incentivising, rather than penalising, investment will all deliver long term lasting benefit to the economy as a whole.”