An insolvency practitioner suggests fears that so-called ‘zombie companies’ were a “ticking timebomb” have been alleviated by the latest insolvency statistics from the government’s Insolvency Service.

The new data shows the number of companies going into liquidation in the first quarter of 2013 was 3,619, a drop of 5.3% on Q4 2012, and 15.8% lower than the same quarter a year ago.

Voluntary liquidations, making up just over a quarter of all insolvencies, were on the rise, up 11.8% on the previous quarter, while voluntary liquidations were down 10.9%. Both figures were down year-on-year.

Nick O'Reilly, insolvency practitioner at the chartered accountants HW Fisher & Company, says: “The assumption that there are thousands of ‘zombie’ companies – essentially dead, and propped up only by record low interest rates – may need to be reassessed.

“It was always assumed that there would be a surge in insolvencies when the zombies inevitably fell off the cliff. But that sense of inevitability is lifting.”

He concludes: "Previous falls in insolvency have been welcomed with a ‘yes but’ as it was feared that the zombies still presented a ticking timebomb. That bomb may just have been defused – and these tumbling numbers demand a warmer welcome.”